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Two behavioral health nonprofits to return $4.2 million to HSD

Two nonprofits that provide behavioral health services have agreed to repay $4.2 million in improper billings and will have their Medicaid funding restored, the Human Services Department announced Monday.

It’s the first settlement of overbilling allegations since HSD cut off Medicaid funding to 15 nonprofits in late June, saying an audit had turned up $36 million in overpayments, mismanagement and possible fraud.

Santa Fe-based Presbyterian Medical Services will repay $4 million and Youth Development Inc. of Albuquerque will repay $240,000 for billing problems the department said occurred from 2009 to 2012.

Both providers will get intensive training and oversight from Arizona companies brought in by HSD “until billing and management systems are fully operational and determined to be sound,” the state agency said in a news release.

All 15 nonprofits continue to be under investigation by the Attorney General’s Office and the agreements announced Monday won’t affect that, according to HSD.

Department spokesman Matt Kennicott said Medicaid funding will resume immediately to Presbyterian Medical Services and YDI, which he said have continued to serve behavioral health clients using their reserves.

Both nonprofits have agreed to sever their ties with another of the 15 agencies under scrutiny, TeamBuilders Inc., according to the department. Presbyterian Medical Services and YDI had partnered with TeamBuilders and another provider, Carlsbad Mental Health Center, in an Albuquerque venture called Partners in Wellness, Kennicott said.

Partners in Wellness is among the 15 providers whose Medicaid payments were suspended. Carlsbad Mental Health is not among the 15, but it has been under investigation by the Attorney General’s Office since last year for its billing practices.

Gov. Susana Martinez called the agreement announced Monday “a significant recovery of public money.”

“We’re committed to protecting Medicaid funds by ensuring that they’re properly used to provide help for those who need it most,” Martinez said in a statement.

Kennicott said the $4 million from Presbyterian Medical Services represents 89 percent of what was initially determined in an audit by Boston-based Public Consulting Group that the nonprofit overbilled, and the $240,000 from YDI represents 81 percent. The initial determinations of what they owed were whittled down after the billings were reviewed more closely, he said.

YDI issued a statement that said “we believed this was the most prudent path for YDI to take” in the interest of amicably resolving its differences with HSD and in order to avoid the time, trouble, expense and uncertainty of litigation.

Presbyterian Medical Services said in a statement that it has “never agreed with the state’s contentions, allegations or actions,” but that its primary motivation in settling was “to preserve its critical safety net behavioral health services and over 200 New Mexico behavioral health jobs.”

Attorney General Gary King has refused to make the full PCG audit public; he contends that would interfere with his office’s criminal investigation and that it falls under the law enforcement exception to the Inspection of Public Records Act.

The New Mexico Foundation for Open Government has sued King and HSD, and a hearing is scheduled Nov. 19 in state District Court in Santa Fe. A second lawsuit seeking the audit, filed against HSD by the Las Cruces Sun-News and New Mexico In Depth, is pending in state District Court in Doña Ana County.

After HSD cut off Medicaid funding to the 15 agencies in June, it almost immediately restored it to a small Raton provider, Service Organization for Youth Inc. Another of the nonprofits, Easter Seals El Mirador, has had its Medicaid funding restored for services to developmentally disabled clients, but not for its behavioral health services.

Twelve of the 15 have had their behavioral health operations taken over by Arizona companies brought in by HSD. Presbyterian Medical Services and YDI instead will undergo temporary supervision: La Frontera will oversee Presbyterian Medical Services, and Valle del Sol will oversee YDI. The oversight agencies will train and provide technical assistance to staff members, ensure compliance with state and federal regulations, ensure accurate and timely billing, and help develop new performance measures, according to HSD.

HSD Secretary Sidonie Squier said Presbyterian Medical Services and YDI “should be commended for working with the state from the get-go to improve service delivery, acknowledge the need to repay overpayments assigned to their work, and sever ties with other troubled entities.”

One outspoken critic of the Martinez administration’s treatment of the providers, Sen. Bill O’Neill, D-Albuquerque, said Presbyterian Medical Services and YDI “were given a chance to respond to the findings and adjust accordingly, unlike the other providers involved who were denied due process and still have no idea what the specific accusations are.”

Kennicott said Presbyterian Medical Services and YDI had “less egregious problems” than some of the other 15 providers.

According to HSD, other companies – it didn’t identify them – face allegations that employees were told to intentionally siphon extra money out of the Medicaid system by using the wrong billing codes, were told to bill for services never provided, or told to obstruct reporting to regulators.

HSD also said neither Presbyterian Medical Services nor YDI is deeply entangled in the “complex financial relationships and potential conflicts of interest” that exist around the Rio Grande behavioral health companies in southern New Mexico and the “numerous not-for-profit and for-profit companies that are closely related to TeamBuilders.”