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Editorial: HSD audit finds tax dollars at deadly waste

The New Mexico Human Services Department has determined the public overpaid 15 mental-health providers more than $36 million from 2009 to 2012, and its audit blames widespread mismanagement and possible fraud.

The findings are so serious HSD has stopped payments to the companies and turned the information over to the state Attorney General’s Office for investigation and possible prosecution.

Of course there needs to be accountability for how public money is spent. But if the fraud is this serious, how has it been allowed to go on for years?

OptumHealth, which has a billion-dollar contract with the state to run the behavioral health system, didn’t raise significant red flags until it installed a new software system last year. That’s when the audit was ordered.


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The audit raises serious issues.

It identifies a provider that was ready to hand out a hefty golden parachute to a nonprofit CEO that would have paid $60,000 annually for seven to 10 years. It said one CEO and family members were paid up to $1.5 million annually. And it cited less-than-arm’s-length dealings, such as a provider that bought services and rented space from its own CEO and COO.

These providers get about 80 percent of their funding from Medicaid, with the balance coming from other federal and state funds.

Meanwhile, health-care professionals and relatives bemoan the shortage of resources for the state’s mentally ill residents and substance abusers.

Make no mistake, the results of substandard treatment can be fatal. The same audit cites a consumer who sought help for suicidal tendencies, had six sessions with a provider but no safety assessment, and then committed suicide. It translates into your tax dollars at deadly waste.

And make no mistake, mental health care is big money.

The 15 providers are the biggest that service the state’s most vulnerable and toughest-to-treat population, and include TeamBuilders Inc., Presbyterian Medical Services Inc., Hogares Inc., Youth Development Inc., and seven providers associated with Rio Grande Behavioral Health Services.

In 2011, Teambuilders was a $23 million-a-year powerhouse of Medicaid-provided behavioral health services, thanks to a web of interconnected businesses developed by Santa Feans Shannon and Lorraine Freedle.


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According to HSD’s audit, the providers flagged in the audit all failed to meet minimal compliance standards and that nearly 15 percent of all payments made to them were questionable. Yet Medicaid fraud, waste and abuse is expected to range from 3 percent to 9 percent.

HSD Secretary Sidonie Squier says of the audit findings reveal unacceptable error rates and unacceptable practices.

It’s also unacceptable that Optum has not been on top of this.

Santa Fe-based Easter Seals El Mirador is on the list of 15, and COO Patsy Romero says there has been a lack of audits and supervision under Optum Health. “How do you manage a system of care if you don’t do monitoring?” she asks.

How, indeed.

It is important Squier, AG Gary King, et al., get to the bottom not only of any mismanagement/fraud, but how it could continue for years – for the benefit of New Mexico taxpayers as well as the state’s most vulnerable residents.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.