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Balderas back in court over HSD audit

New Mexico State Auditor Hector Balderas.

New Mexico State Auditor Hector Balderas.

SANTA FE – State Auditor Hector Balderas says the Human Services Department gave him an altered version of an audit of behavioral health providers after he subpoenaed the document in July, and he’s back in court to get the original.

Balderas said in a court filing that he discovered “purely by chance” just last month that the audit report he was given differed in at least one significant respect from the audit report HSD turned over to the New Mexico attorney general, triggering a criminal investigation of 15 behavioral health providers.

Balderas obtained another subpoena in state District Court in Santa Fe last week ordering HSD Secretary Sidonie Squier to produce by Dec. 2 the original report by Boston-based Public Consulting Group and the changes made to it by HSD.

The PCG audit was the basis for HSD’s halting Medicaid funding for behavioral health services to 15 nonprofits and bringing in Arizona companies that have replaced a dozen of them.

The version of the audit that HSD gave Attorney General Gary King and federal authorities on June 21 contained the following sentence, which appeared in an otherwise heavily blacked-out fragment of the audit King released in October after a records request:

“PCG’s Case File Audit did not uncover what it would consider to be credible allegations of fraud, nor any significant concerns related to consumer safety.”

The sentence does not appear in the document provided to Balderas, according to his court filing.

The case file audit was one of three components of the PCG review.

HSD spokesman Matt Kennicott said on Tuesday the agency told PCG to remove the sentence from the final version of the report because “it’s not up to our contract auditor to determine whether there are credible allegations of fraud. Only the state Medicaid agency has that ability.”

The sentence was supposed to have been removed before the document was given to the attorney general’s Medicaid fraud unit on June 21, but it was inadvertently left in, according to a letter HSD sent Balderas on Oct. 25 after Balderas questioned the discrepancy.

The HSD letter said the corrected final report – without the sentence – was sent to the attorney general on July 16 and then given to Balderas on July 26.

But Balderas alleged in his petition for a subpoena that there are inconsistencies in HSD’s account and that of PCG, which indicated it did not remove the language from the final report until Sept. 5.

Balderas “is now forced to pursue additional legal action to obtain the original, unaltered PCG report and to independently resolve inconsistent explanations,” his chief of staff, Evan Blackstone, said in a statement Tuesday.

HSD told Balderas it had made a second change in the audit as well, correcting an error in which one of the providers was listed on another provider’s report card.

Balderas says the PCG report is key to the annual audit of HSD that his office is required to produce.