Attorney General Gary King said Thursday that it will be a couple more months before his office is ready to reveal the findings of its investigation into possible fraud by behavioral health providers.
King told lawmakers there has been significant progress and he hoped to be able to issue reports on at least some of the 15 nonprofits by year’s end, but he couldn’t guarantee all of them would be ready.
State Auditor Hector Balderas, meanwhile, told legislators his required annual audit of the Human Services Department will be out Dec. 16.
The timetable is less clear for a separate report the Auditor’s Office is working on: a review of the way HSD handled the allegations of problems with the 15 providers.
Balderas said he is trying to figure out whether HSD gathered adequate information, properly verified it, and complied with state and federal regulations in the process of determining there were “credible allegations of fraud” and referring the nonprofits to the attorney general.
“It’s my determination that needs to be reviewed, and that conclusion needs to be shared with the public, as soon as possible,” Balderas said in an interview after he and King appeared before the Legislative Finance Committee.
The HSD in late June halted behavioral health Medicaid funding to the 15 providers – and later restored it to one of them – after determining there were credible allegations of fraud. It also brought in Arizona companies to take over the behavioral health operations of 12 of the nonprofits, temporarily manage two of them, and provide assistance to another.
Balderas also said he would examine the selection and role of Public Consulting Group, a Boston-based firm brought in by HSD to do a $3 million special audit of the 15 providers after routine monitoring raised red flags.
The PCG audit findings – including $36 million in alleged overbillings – were instrumental in HSD’s decision to freeze funding, but the full audit has not been publicly released, and the providers were never told what they allegedly did wrong.
King told the committee the PCG audit is an important document, but “the audit itself is not likely to be the basis for criminal charges. It is a starting point.”
King said his investigators are also scrutinizing tens of thousands of pages of documents and interviewing billing clerks, administrators, therapists, clients, whistle-blowers and many others.
He also cautioned that the 15 providers “have the presumption of innocence” going into the investigation and that “a billing irregularity doesn’t necessarily equate … to fraud.”
Providers have complained bitterly that they were never given an opportunity to explain any billing problems the audit might have identified.
The attorney general said findings by his office could cover a wide range: It could find criminal fraud that would warrant prosecution, civil fraud that could warrant repayment and fines, billing irregularities that could require repayment or no basis for any further action.
“All of these possibilities still exist,” he said.
Many legislators remain frustrated and upset by the events of the past four months.
Those lawmakers complain the providers got no due process, services have been disrupted to some mentally ill or addicted residents and their families, and that HSD’s behavioral health overseer, OptumHealth, has not been held accountable for the upheaval.
“It’s just really unnerving, just wrong on so many levels,” Sen. Bill O’Neill, D-Albuquerque, said Thursday.
House Minority Leader Donald Bratton, R-Hobbs, said there is a “level of frustration” with the way events unfolded, and lingering questions about due process and Optum’s oversight. But he also said the state could potentially have been liable – and made to reimburse the federal government – if it had continued to pay providers once fraud was suspected.