New Mexico Senate Democrats: Human Services Audit "Should Sound Alarms"

Feb 27, 2014

Credit Senator Mary Kay Papen (D)

  Senate President Pro Tempore Mary Kay Papen and Senate Majority Floor Leader Michael S. Sanchez are not surprised by the much-anticipated findings of an independent audit of the Human Services Department that were released today by State Auditor Hector Balderas.

“I appreciate the state auditor’s diligence in obtaining information that the Human Services Department has done its best to keep from legislators and the public”, stated Senator Papen.

A major finding of the audit is the department’s failure to follow its own procedures for investigating allegations of fraud in what Senator Papen characterizes as a “rush” to refer 15 New Mexico behavioral health providers to the attorney general for investigation and replace them with out-of-state providers.

“Most disturbing”, continued Senator Papen, “is the department’s double standard when it comes to its own stewardship of federal and state funds and payments to favored contractors.” The independent auditor’s findings show that the department has made questionable payments to Public Consulting Group (PCG), the Boston consultant whose work precipitated the suspension of Medicaid payments to 15 of the state’s behavioral health providers and to the five Arizona behavioral health providers that the department brought in to replace them. Documents recently obtained by Senator Papen from the Human Services Department show that it has directed the managed care organizations that are administering the state’s redesigned Medicaid program to pay the Arizona providers higher rates than those paid to other Medicaid providers and to give the Arizona providers preferential treatment with respect to deadlines for the timely filing of claims.

“The auditor’s findings, coupled with documents showing that the department ordered the Arizona providers to be paid at a higher rate than other Medicaid providers, should sound alarms across the state and federal governments”, said Senator Papen.

The suspension of payments resulting from the rushed referrals eventually put all but a few of the accused New Mexico providers out of business. Eight months after the referrals, most still have not been told what the specific allegations against them are. To date, no referred provider has been the subject of either criminal or civil fraud charges. Earlier this week, the

Attorney General’s Office announced that irregularities flagged by PCG and used to justify suspending Medicaid payments to one provider were resolved to the attorney general’s satisfaction when the provider was given the opportunity to explain.

“If the Human Services Department had given each of the accused providers the opportunity to respond to flagged claims before making the referrals, the administration would have prevented the disruption of care for the state’s most vulnerable individuals and families and could have saved jobs and at least $20 million in taxpayer dollars that have gone to five Arizona providers”, observed Senator Sanchez. “This new audit reveals more than bureaucratic bungling. Aside from the unnecessary dismantling of the state’s behavioral health system, the administration’s failure to collect over $60 million in reimbursements from the federal government for Medicaid expenses cannot, should not and will not be dismissed as easily as the administration would like”, he added. “This isn’t the end of the story.”