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Martinez defends freeze of payments to behavioral health providers

SANTA FE – Gov. Susana Martinez on Tuesday defended the Human Services Department’s Medicaid funding freeze to behavioral health providers and pledged there would be no loss of services to the mentally ill and substance abusers.

“We have to make sure there is no fraud, waste or abuse that is taking place,” Martinez told reporters.

HSD froze funding to 15 nonprofits in late June after an audit that the department said showed overpayments, mismanagement and possible fraud. The audit results, which were not made public, were turned over to the attorney general to investigate.

The department has restored Medicaid behavioral health funding to one of the 15. It refused requests from 11 and was still considering three others.

Some providers have said they will have to close if their funding isn’t reinstated. They’ve asked a federal court to unlock the Medicaid money, claiming their right to due process was violated. A hearing is scheduled for today.


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“No matter what entity it is, there will not be a loss of services,” the governor said, citing the department’s agreements with five Arizona providers to step in with technical assistance and management.

The department says it has handed the situation properly, citing a brief statement from the federal Centers for Medicare and Medicaid Services that the agency “believes HSD acted in accordance with federal regulation and CMS guidance in imposing the temporary payment suspension.”