Lawmakers want probe into suspension of funds

Susan Montoya Bryan
The Associated Press

SANTA FE — Democrats with New Mexico’s congressional delegation are calling for a federal investigation into the withholding of Medicaid payments from 15 nonprofits that provided behavioral health services to needy residents.

Medicaid payments

In a letter sent Friday to U.S. Health and Human Services Secretary Sylvia Burwell, Sens. Tom Udall and Martin Heinrich were joined by Reps. Ben Ray Lujan and Michelle Lujan Grisham in saying the state’s actions disrupted care for the most vulnerable residents.

“As we have consistently conveyed via countless phone calls, letters and in-person meetings, an overwhelming body of evidence indicates that this disruption was unwarranted and reckless,” they wrote.

The state Human Services Department characterized the delegation’s request as a “partisan stunt” and said federal officials have reviewed the matter and found that the state acted in accordance with anti-fraud regulations under the Affordable Care Act.

“The companies in question overbilled the state millions of dollars in Medicaid funding that should have been used to help those in need,” agency spokesman Kyler Nerison said.

New Mexico’s behavioral health system was upended in 2013 when Republican Gov. Susana Martinez’s administration froze payments to the nonprofits after an audit raised questions about fraud and abuse. The audit had alleged $36 million in Medicaid funding was mishandled by the providers.

The attorney general’s office launched an investigation, but the state Human Services Department eventually replaced the nonprofits with companies from Arizona. The providers protested, saying their due-process rights were violated because they were denied hearings by the department.

Many of the nonprofits have since filed lawsuits against the department.

Ten providers were vindicated earlier this month when New Mexico Attorney General Hector Balderas announced that an investigation turned up some regulatory violations but no pattern of fraud.

Three others had been cleared of previously. Investigations into two more are pending.

The senators and representatives said in their letter that Balderas’ findings confirmed their longstanding concern that irregularities surrounding the Human Services Department’s actions undermined the legitimacy of its auditing process.

Nerison disputed that. “The attorney general has simply said he can’t prove that the overbilling was the result of fraud — even though one of the companies lent public money to its CEO to buy a private plane,” he said.

Earlier this month, the department said it would review Balderas’ findings on the regulatory violations. It also vowed to continue trying to recoup misspent and overbilled Medicaid funds from the providers.

The members of the delegation also renewed their request Friday for oversight by federal officials and called for a verification process to ensure any state investigation into allegations of fraud meet certain standards.