N.M. Behavioral Health in Chaos Amidst Massive Fraud Charges

Addiction Treatment Industry Newswire
09/16/2013 –ATIN – In one of the biggest scandals to emerge in behavioral health since the advent of managed care 25 years ago, New Mexico’s public funded mental health care and addiction treatment system is in a widespread state of paralysis and chaos after a big audit commissioned by state Health and Human Services officials revealed rampant erroneous and fraudulent billing. The $36M bad billing claim, the audit has yet to be made public during a criminal inquiry, is being leveled at a dozen mostly non-profit services providers that provide the bulk of state funded and Medicaid care in the Southwestern state of $2.1M residents. Saying that tough anti-fraud provisions of the new Obamacare federal healthcare law and the egregious and widespread nature of the fraud and waste left them no choice, state officials had cut-off all funding for 15 behavioral healthcare organizations while protections against the fraud and errors could be worked out, a decision that still stands for 12 of the providers after an appeal.

Arizona Takeover

The non-profit entrepreneurial founders of providers like TeamBuilders – 600 employees, 24 counties, $42M paid during 3-yr period of the audit – have professed shock at the allegations and have rallied their allies in the state legislature as New Mexico HSD has spent $17M on care from Arizona-based providers, which are being brought in in most cases to take over executive management of the dozen targeted non-profits. Providing about 80 percent of the state-funded mental health and addictions care in New Mexico, players like Pathways, Santa Fe Easter Seals and Wellness, the non-profits’ state payments were administered by managed care organization OptimumHealth. After winning a competitive bid for the New Mexico behavioral health oversight contract, the MCO installed anti-fraud tracking software. Such were the red flags that came up after the installation that a $3M special audit was commissioned whose work has sparked the current allegations, which include things like annual salary payments to a single family of $1.5M, insider real estate transactions and widespread over-billing. The audit, which alleges that a quarter of all claims were problematic, has been kept secret and that has infuriated the providers and their allies. But a federal district court judge refused to temporarily restore state funding earlier this summer, saying the providers failed to provide enough evidence to warrant such a move. Some Santa Fe lawmakers have been highly critical of the New Mexico governor and HSD Secretary Sidonie Squier, who simply walked out of a particularly vicious cross examination in the state capitol earlier this month.

Harbinger of Things to Come?

The federal auditor General Accounting Office, GAO, has estimated that as much as 30 percent!!! of all Medicaid and Medicare payouts are either errors or fraudulent; and the Obamacare Affordable Healthcare Act gives state officials much more leeway to go after providers. It could be that what is happening in New Mexico is set to occur elsewhere, especially if the GAO fraud and waste data are anywhere near accurate. And scenes like the plight of Nancy Jo Archer may be set to play out in other states as software becomes increasingly sophisticated and cash-strapped governments crack down. A 30-yr veteran of the New Mexico non-profit Hogares who rose to become its CEO, Ms. Archer New Mexico non-profit Hogares was in tears recently as she cleared out her office, her life’s work and legacy in tatters.

read what Treatment Magazine thought of CNN’s recent REHAB RACKET REPORT

read our report on NJ Blue Cross’ Urine Testing Fraud Allegations


Got Addiction News? …TELL US!