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Behavioral health system likely on agenda during new legislature session

Copyright © 2014 Albuquerque Journal

SANTA FE – The recent shakeup in New Mexico’s behavioral health system that forced some nonprofits to shut their doors could continue to reverberate in the upcoming legislative session.

Greater protections for service providers, a crackdown on health care contracting and more public oversight of health-related decisions are among the proposals already in the hopper.

It’s a response to the upheaval that occurred when Gov. Susana Martinez’s administration halted Medicaid funding last summer to 15 behavioral health providers, eventually replacing a dozen of them with Arizona companies.

Critics in the Legislature say the Human Services Department, operating in secrecy, ran roughshod over the nonprofits.

“I think the whole way it has been handled is very unfortunate,” said Senate President Pro Tem Mary Kay Papen, D-Las Cruces, who is sponsoring one of the bills endorsed by the interim Legislative Health and Human Services Committee.

“I think that many legislators, on both sides of the aisle, would have preferred that there had been more transparency. … When you feel like something is operating in the shadows, you have a very difficult time getting on board with what they’re doing,” Papen said.

Ads are running on seven radio stations across the state urging listeners to call legislators and demand due process rights and timely appeals for health care providers.

The ads were paid for from donations to New Mexicans Fighting To Save Behavioral Health, a loosely knit group that includes consumers, their families and advocates, as well as former providers. The effort has been largely coordinated by the New Mexico chapter of the National Association of Social Workers.

The ads say the shakeup in the system caused disruption in services to thousands of clients – a claim the Martinez administration disputes.

There could be obstacles for the legislative proposals right off the bat.

The 30-day session that begins Tuesday is by law supposed to deal only with budget and revenue matters, and whatever else the governor specifies – although legislative leaders have sometimes figured out ways around that.

Martinez’s spokesman, Enrique Knell, said the governor hasn’t made final decisions about what to put on the agenda, but that she “would strongly disagree with any piece of legislation that would make it easier for companies or nonprofits to misuse Medicaid funds.”

Senate Majority Leader Michael Sanchez, D-Belen, said even if Martinez doesn’t put the legislation on the agenda, some committees may want to air the issues and question administration officials about the shakeup.

“I think they owe us some answers,” he said.

The HSD says an audit it commissioned last year from a Boston-based firm, Public Consulting Group, showed overbilling, mismanagement and possible fraud among the 15 nonprofits audited.

Attorney General Gary King’s office, which has been investigating the possible fraud, has fought successfully to keep the audit secret in two court cases seeking to make it public. He convinced judges in Las Cruces and Santa Fe that doing so would hinder his ongoing criminal investigation.

HSD has said it didn’t object to releasing the audit, but that it would abide by the attorney general’s request not to do so.

King’s office announced last week that Alamogordo provider The Counseling Center – one of the 15 under investigation – had been cleared of fraud, although the investigation found $19,000 in overbilling. The HSD contends the provider overbilled much more than that – “hundreds of thousands” of dollars – and it will move to collect the overpayments administratively.

In November, HSD announced that two of the 15 providers had settled overbilling allegations with the department and their Medicaid funding would be restored. Santa Fe-based Presbyterian Medical Services repaid $4 million and Youth Development Inc. of Albuquerque repaid $240,000.

Earlier, shortly after cutting off Medicaid funds to the providers last summer, HSD restored them to a Raton nonprofit, Service Organization for Youth.

The providers and the public are still in the dark about what the Public Consulting Group audit revealed.

The nonprofits “have been done a grave injustice – they still have no idea what the accusations are,” said Sen. Bill O’Neill, D-Albuquerque. “And by now, most if not all of them are out of business.”

Papen’s bill gets at the crux of HSD’s actions last year: its determination that there were “credible allegations of fraud” – a term in federal law – against the providers. That paved the way for the agency to freeze their funding, refer them to the attorney general and replace them.

The bill defines “credible allegation of fraud” and makes clear that inadvertent billing errors would not constitute Medicaid fraud. And it would allow Medicaid providers against whom the department finds a “credible allegation of fraud” to go to state District Court for a review of that determination.

Eight of the 15 providers went to federal court last summer requesting that Medicaid funding be restored and “name-clearing” hearings held. But a judge denied the temporary restraining order, saying the providers hadn’t established that their legal arguments would prevail in their lawsuit.

O’Neill is sponsoring legislation that would tighten the “credible allegation of fraud” process, plus give providers more recourse to get their payholds lifted.

The HSD under federal regulations has the discretion to not suspend – or to restore – all or part of a provider’s Medicaid funding for “good cause.” All 15 providers asked for “good cause” exceptions: only one had its Medicaid funding fully restored.

The HSD didn’t put out to bid the audit of the 15 providers before awarding the $3 million contract to Public Consulting Group. Nor did HSD seek bids to replace the New Mexico behavioral health providers before it awarded nearly $17.9 million in contracts to five Arizona companies.

Sen. Tim Keller, D-Albuquerque, is sponsoring a bill to tighten up the state procurement law, which currently allows an exemption for health contracts. Keller says the exemption creates “a gaping hole in the procurement code and the transparency of state contracting,” and means major contracts are done without competitive bidding, a process for protesting them, or in-state preferences for local companies.

His legislation would also limit contracts issued in emergency situations – to investigate alleged fraud or fill in for suspended providers – to three months.

Keller also proposes a far broader fix: a change to the state constitution creating a Health Care Cost and Transparency Commission to oversee and monitor how the state spends hundreds of millions of health care dollars.