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‘Golden handcuffs’ for exec

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The executive director of one of the behavioral health nonprofit agencies that had its Medicaid funding suspended by the state Human Services Department was given a set of “golden handcuffs” valued at $850,000.

According to financial statements filed by Valencia Counseling Services Inc. with the state Attorney General’s Office, agency director Sam Vigil received a $100,000 lump sum when he officially retired last year and will get payments of $50,000 annually for 17 years.

Vigil, who still works at the nonprofit, at a reduced salary, said the “deferred compensation” package has been a great help to his retirement.

Medicaid payments to Valencia Counseling Services were suspended in late June because of still-secret audits of the nonprofit and 14 other providers.

Vigil said the auditors never mentioned his retirement package.

“Nothing like that was ever brought up,” he said.

Valencia Counseling is an ongoing operation, despite the cutoff of Medicaid funds that accounted for more than 80 percent of its operations. It runs a DWI school, a food program for rural poor children and a low-income housing program that are not funded by Medicaid.

Vigil’s deferred compensation package was made up of several pieces and required him to stay at the agency from 2002 through June 2011.

The board first purchased a life insurance policy, with an annual premium of $50,000, that had a cash surrender value.

The board decided in 2009 to cash that in at its value at the time – $360,000. It then approved an additional $244,277 to purchase an annuity to fund the retirement.

Financial statements filed by the agency refer to the arrangement as “golden handcuffs.”

Vigil said the board made the decision in 2002 to fund the program and then later to upgrade it.

“The board makes those decisions,” he said.

It’s difficult to say how much Vigil was receiving in total compensation before his retirement. He was covered under an arrangement in which Valencia Counseling Services Inc. paid another company, Rio Grande Management, $15,000 a month for management services. Rio Grande, in turn, is a subsidiary of for-profit Providence Services of Tucson.

Valencia Counseling served more than 2,000 clients in four counties until the state Human Services Department began replacing management of 12 of the 15 nonprofit agencies that were audited in connection with Medicaid money.

Several other organizations cut off from Medicaid payments for behavioral health clients also are continuing to operate non-Medicaid services, such as Hogares Inc. in Albuquerque.

While golden handcuff retirement packages are the kind of issue that have garnered headlines, they are not the reason for the suspension of Medicaid behavioral health payments to the 15 nonprofit agencies around New Mexico.

The HSD audits had two basic parts. One part looked at Medicaid billings and the other – called enterprise audits – at the business practices of the behavioral health agencies providing services.

Other than general statements that the Medicaid billing audit showed “credible” evidence of fraud, state officials have been restrained in their comments about the billing practices.

The headline material in New Mexico has been based on enterprise audits that examined the business practices of the nonprofit agencies providing counseling and services for behavioral health and mental health clients.

Human Services Department spokesman Matt Kennicott said the suspension of Medicaid payments was based on the audits of the nonprofit agencies’ billing practices.

“The enterprise audits of the agency business practices indicated other issues that raised questions,” Kennicott said.

Much of the information contained in the enterprise audits comes from public records.

In July, eight nonprofit agencies sought a temporary restraining order in federal court based on a lack of due process in the decision to suspend Medicaid payments. The nonprofits contended their good names were sullied by the department’s decision.

Chief U.S. District Judge M. Christina Armijo found that they had not shown that they would succeed on the merits of the case.

Armijo noted that the nonprofits were caught in a situation of having to argue against audits that they have not seen.

The still-secret audits were referred to the Medicaid Fraud Division of the Attorney General’s Office, which had been involved in the oversight of how the audit was conducted.

News organizations and the New Mexico Foundation for Open Government have filed legal actions to gain access to the audits under the state’s Inspection of Public Records Act.

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