Will New Mexico's big investment in behavioral health programs pay off?

SANTA FE — New Mexico lawmakers earmarked more than $555 million during this year’s 60-day legislative session to fund an overhaul of the state’s system for mental health and substance abuse treatment programs.

The spending infusion is a key part of a new regional-based approach to behavioral health, after state spending in recent years failed to significantly move the needle.

Amid the change, a legislative report released Wednesday showed the state’s rankings in key behavioral health measures actually decreased from 2023 to 2024.

Those measures include overall mental illness prevalence, in which New Mexico dropped from 36th to 44th in the nation, and an increase in substance abuse disorder among both adults and minors.

During a Wednesday meeting of the Legislative Finance Committee in Taos, several lawmakers expressed concern about state agencies’ previous use of allocated behavioral health funds and the recent trends.

“I’m not happy with the rankings I’m seeing ... when we invested $2.2 billion over the past few years,” said Rep. Tara Lujan, D-Santa Fe.

State Health Care Authority Secretary Kari Armijo said there have been positive developments, too, even as state officials brace for the potential impacts of a congressional budget bill.

That includes the possibility of an estimated 90,000 New Mexicans losing Medicaid benefits, in part due to increased work requirements that would start in 2027.

Specifically, Armijo cited an increase in behavioral health services provided over the last nine years and said 57% of the 4,000 or so of the new health care providers licensed in New Mexico since July 2024 are in the behavioral health field.

“Things are really moving in the right direction,” Armijo said, later adding, “The state has done a lot of work to rebuild the behavioral health system.”

The overhaul approved this year by lawmakers calls for regional plans for providing substance abuse and mental health treatment. The state’s judicial branch is playing a larger role under the new system, which officially took effect last week.

Both the Administrative Office of the Courts and the Health Care Authority have hired new top-level staffers to lead the revised system, while a new executive committee tasked with reviewing and approving the regional plans held its first meeting this week.

Even as the new system takes shape, Armijo said the number of behavioral health crisis centers around New Mexico has increased, with five such centers now operating.

However, some of the proposed federal funding changes could impact New Mexico’s revised behavioral health approach, as some treatment programs are covered under Medicaid.

Rep. Mark Duncan, R-Kirtland, questioned whether the state’s goal should ultimately be to increase or decrease its Medicaid enrollment.

“My goal is to get people off (the Medicaid rolls), your goal is to get people on,” he told Armijo at one point during Wednesday’s hearing.

Meanwhile, legislators also questioned Children, Youth and Families Secretary Teresa Casados about whether $20 million in state funds intended to pay for behavioral health services for children had been misspent.

Among other uses, CYFD utilized some of the money to fund the operations of group home facilities, which some legislators said does not qualify for federal matching funds.

In response, Casados said the budgetary language was made more restrictive by the Legislature from when the funding was first earmarked in 2022 to when it was reauthorized two years later.

“We believe the initial language allowed us to do that,” Casados said during Wednesday’s hearing.

But an LFC subcommittee voted before adjourning to approve a letter from the committee’s two chairmen — Sen. George Muñoz, D-Gallup, and Rep. Nathan Small, D-Las Cruces — requesting that State Auditor Joseph Maestas and Attorney General Raúl Torrez review the appropriateness of the spending.

Such a review could trigger an investigation into whether the funding was misspent by CYFD.