A group of eight health care providers accused of fraud and abuse in a recent audit by the New Mexico Human Services Department has filed a lawsuit asking the courts to overturn the state’s suspension of their funding.
The HSD audit of 15 nonprofit behavioral health care providers announced last week found an estimated $36 million in overpayments to providers. Details of the allegations are being kept confidential while the Attorney General’s Office reviews the findings.
After the disclosure, HSD halted payments to the 15 providers. Three providers have since had some state funding resumed after appealing the funding freeze.
Providers joining the lawsuit include Border Area Mental Health Services, Counseling Associates, Families and Youth, Southern New Mexico Human Development, Southwest Counseling Center, The Counseling Center, Valencia Counseling Services and Hogares.
Providers have said they were wrongly accused of fraud and publicly named as being under investigation without receiving any details about the allegations against them, said Patric Hooper, an attorney for the providers.
Those groups on Friday asked a state District Court for a temporary injunction to immediately lift the payment freeze.
“What the state tried to do here is bypass the entire appeal process, impose this temporary (payment) suspension, which is an extremely serious sanction because it has the impact of basically putting these people out of business, well before they have an opportunity to be heard,” Hooper said.
HSD spokesman Matt Kennicott said Friday that the agency had not reviewed the lawsuit but that it stands behind the decision to freeze payments to providers accused of fraudulent billings.
“We found, through the audit, this to be particularly egregious and felt like we needed to take immediate action on that,” Kennicott said of the payment freeze.
“We’ve got the law backing us up, and we feel we’re very solid in that regard,” he said.