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Redacted portions of HSD audit released

ALBUQUERQUE, N.M. — Update: See links below to earlier Journal coverage.

SANTA FE – State officials on Friday released a small chunk of the audit that led to the crackdown on 15 behavioral health nonprofits, but much of it was blacked out and an open government group said it would keep pressing for the full report.

Attorney General Gary King and the Human Services Department released 52 pages of the audit by Boston-based Public Consulting Group in response to a lawsuit filed by the New Mexico Foundation for Open Government.

“The version released today is still significantly redacted, and FOG will continue its efforts to obtain release of the full report,” FOG said in a statement.


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The attorney general claims the release of the full, 300-plus page audit – the bulk of which he says is detailed findings on each of the providers – would interfere with an ongoing investigation of whether any of the providers committed Medicaid fraud.

“Those findings identify witnesses, specific compliance issues, and the specific methodology by which the audit investigated potential issues, including possible Medicaid fraud,” King wrote in a response to the lawsuit.

The Human Services Department, which contracted for the audit, says PCG found more than $36 million in overpayments from 2009-12, along with questionable business practices. It turned the findings over to the AG, and halted Medicaid and state funding to the 15 nonprofits. Twelve of them have since had their behavioral health operations taken over by Arizona companies brought in by HSD.

King argued in his response Friday to the lawsuit, which FOG filed last month, that the audit information is evidence received in connection with a criminal investigation, and that it falls within the law enforcement exception to the Inspection of Public Records Act.

He said making public the audit’s methodology would give providers “an opportunity to cover tracks through the alteration or destruction of key records,” and that revealing the problems found with each provider and the dollar amounts of possible fraudulent billing would give targets of the investigation “too great an opportunity for the cleansing of records that would otherwise lead to criminal culpability.”

Greg Williams, a lawyer who handles open government cases and is an officer of the FOG board, disputed the attorney general’s assertion that the audit falls under IPRA’s law enforcement exception.

“Audit reports of public entities are public,” Williams told the Journal. “Just because the AG is looking into the fact that the audit may have uncovered something criminal, or possibly criminal, doesn’t mean they get to exclude it. The public is entitled to know what’s in the report.”

He said he expected a hearing would be set by state District Judge Sarah Singleton, who has been assigned the case.


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In addition to the dozen providers whose behavioral health operations were taken over by Arizona companies, two providers have been under the temporary supervision of Arizona companies and another has had onsite technical assistance.

Here is the FOG website with links to the audit portions released by the attorney general and the attorney general’s court response to the FOG lawsuit.

Here is an earlier story providing key background information on the audit controversy.

Here is the original story on the New Mexico Foundation for Government lawsuit seeking release of the HSD audit.

Here is a link to more Journal stories on the HSD audit and behavioral health service providers.