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Argument continues over access to Medicaid audit

ALBUQUERQUE, N.M. — Attorney general’s office suggests compromise on state auditor’s request

SANTA FE – State Auditor Hector Balderas and the administration of Gov. Susana Martinez are sparring over Balderas’ access to an audit by a Boston firm that was the premise for the administration’s halting Medicaid funding to 15 behavioral health providers.

A state district judge last week, at Balderas’ request, issued a subpoena ordering the Human Services Department to turn over a copy of the audit to Balderas on Monday. But that didn’t happen.

Instead, HSD asked the attorney general’s office – which is investigating the audit findings – to try to work out some arrangement whereby Balderas’ office could have access to the audit but not release it to anyone else.


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HSD has 14 days from the subpoena’s delivery – which was last Wednesday – to challenge it before the judge.

The HSD says releasing the full audit – thus far it has provided only a summary – could imperil the attorney general’s ongoing investigation of whether there was Medicaid fraud by any of the 15 nonprofits, which treat the mentally ill and addicted.

“We don’t want to do anything that will jeopardize the attorney general’s investigation,” HSD spokesman Matt Kennicott said Tuesday.

A spokesman for Martinez, Enrique Knell, said except for the attorney general’s concerns, the governor would not be opposed to Balderas or the general public having the audit.

Balderas says he always works with law enforcement and does not compromise criminal investigations. But he says his office has a broader role under federal and state law: determining whether HSD has adequate procedures in place to identify fraud and safeguard federal funds.

Human Services Secretary Sidonie Squier announced a month ago that the department had halted Medicaid funding to 15 providers because an audit it commissioned, done by Public Consulting Group Inc., showed $36 million in overpayments to the providers from 2009-12. She said there was widespread mismanagement and possible fraud.

Balderas said that crisis and the questions it raises – compounded by his office’s finding a year ago of $5 million in questionable costs in another Medicaid-funded program run by HSD – requires him to do an independent review of whether federal funds are adequately protected under the current system.

Squier was correct in turning the audit findings over to the attorney general, “but there is a whole other set of federal laws that requires her to turn that over to me,” Balderas told the Journal .

He contends HSD is obstructing his ability to audit and is violating the law by its refusal on July 12 to release a copy of the PCG audit to him.


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Chief Deputy Attorney General Al Lama suggested Tuesday that it might be possible to modify the subpoena’s wording, with the judge’s approval, to make it clear what information should remain confidential.

Lama said it will likely take the attorney general’s office two or three months to sort out which of the 15 providers’ cases warrant further investigation for possible civil or criminal fraud.

Medicaid funding for behavioral health services has been restored to one of the 15 nonprofits, but not the others. HSD has contracted with five Arizona companies to oversee – and in some cases take over management of – the New Mexico nonprofits.