Behavioral Secrets

The state was willing to name providers accused of fraud last year, so why not now?

Taxpayers can’t be sure if a behavioral health provider is under investigation by the state for improperly billing the federal Medicaid program—which provides health insurance coverage to thousands of low-income New Mexicans.

That's because state officials won't reveal whether cabinet-level departments have made current referrals leading to new investigations of Medicaid billing irregularities.

It's a sharp contrast to last year's public naming of 15 in-state providers the state accused of "credible allegations of fraud" in Medicaid billing.

"Our reputation was ruined," says Patsy Romero, chief operating officer of Santa Fe-based provider Easter Seals El Mirador, one of the named agencies. "People would call us and say there was fraud going on in our agency, [asking] 'What is going on?' It is a horrible situation."

She says state officials didn't disclose to the organization that they had released the name of Easter Seals along with 14 others in response to a public records request by a newspaper.

To juxtapose the state's public naming of those 15 providers in the 2013 behavioral health shakeup to its insistence on keeping the names of providers facing complaints now isn't comparing an apple with an apple. Back in 2013, the state cited an outside audit and concluded that "credible allegations of fraud" existed to justify freezing Medicaid payments to the providers. To keep secret the names of the 15 providers in that shakeup might have been a difficult task considering the state contracted with Arizona companies to take over services pending an investigation into the allegations.

Still, the state's drastically different responses—releasing the names of 15 providers in 2013 while staying mum on providers potentially facing state probes now—present an important policy question as state lawmakers prepare to tackle the behavioral health shakeup in the upcoming legislative session: Does the public have a right to know if a health facility is being investigated for billing fraud or other violations? If so, when? What's the proper balance between the public's right to know and a health provider's right to privacy?

Names of the 15 New Mexico providers accused of fraud became public in a June 26, 2013, Albuquerque Journal article while investigations into those allegations remained "pending," documents show.

The newspaper reported that the Human Services Department gave it a list of the providers whose payments had been suspended by the state. The audit estimated $36 million in billing discrepancies made by the providers to Medicaid. Boston-based Public Consulting Group arrived at that figure by analyzing samples of bills for services submitted by the providers. Its methods have been called into question for various reasons—including that the firm used extrapolation to arrive at the figure and because the behavioral health providers didn't have a chance to respond to its findings—but it was ultimately state officials who made the determination to halt payments.

The providers—whose services included counseling kids with anger problems, treating addiction and assisting those with serious mental illness—complained bitterly that the accusations damaged their reputations and shuttered their home-grown businesses. Attorney General Gary King has delved into the audit and so far cleared a few agencies, but many are out of business as his office investigates. Meanwhile, the audit itself has also been sheltered from the public eye despite several lawsuits against HSD and the attorney general that attempted to shake it loose.

SFR is seeking records of new complaints lodged against behavioral health providers in order to determine how exactly state agencies handled those complaints. We asked one of the state agencies that deals with the providers to turn over documents about such claims made in the last 18 months.

But the Children, Youth and Families Department denied our request to inspect its reports of potential fraud to the state's Human Services Department. CYFD didn't say there aren't any—just that we can't see them if the records exist.

The state's Public Health Act gives CYFD and the Department of Health regulatory authority over health facilities, such as the ability to inspect them for compliance. The act states that a "complaint" received by CYFD "shall not be disclosed publicly in a manner as to identify any individuals or health facilities if upon investigation the complaint is unsubstantiated." CYFD and HSD cited that law in withholding records from SFR.

Part of CYFD regulations include conducting surveys of the services. If the agency determines that a provider's clinical records are not sufficient to justify reimbursing that provider for its treatment services through the Medicaid program, CYFD can make a referral to HSD to investigate that facility for billing irregularities.

HSD also declined to turn over records, telling SFR in an Oct. 2 letter that it was doing so for up to three reasons: The referrals against the facilities have not yet been substantiated by HSD; the complaints are unsubstantiated; or the attorney general is conducting an "ongoing" investigation into the facilities.

Susan Boe, executive director of the New Mexico Foundation for Open Government, writes to SFR that she disagrees with HSD's effort to avoid disclosing the records, noting that the Public Health Act doesn't prohibit the release of all information—just certain identifying details about an individual or health facility. SFR has submitted a request asking for a version of the redacted records.

Representatives from CYFD and HSD did not return multiple requests for comment.

Attorney General King's investigation cleared Easter Seals El Mirador of wrongdoing, but HSD kicked the investigation back to that office, saying King used the wrong methods. Easter Seals CEO Mark Johnson says his organization was promised a short review that would last a few weeks. But that was at least five months ago, he says, adding that he learns of many developments from newspaper articles—and not directly from state officials. "Nobody sat down with us," he says of state officials.

Dan Ranieri, CEO of La Frontera, says state officials are working with his organization and other new Arizona providers to deal with problems in the providers submitting claims for Medicaid reimbursements through state databases. "Since January, we've been receiving somewhere around 50 percent of what we billed," he says of services the organization provided through Medicaid, "so it's been difficult."

Ranieri notes that the state appears to be working diligently to fix that issue. It's the type of help the New Mexico nonprofits accused of fraud say they never received. Ranieri, for his part, calls taking over New Mexico providers accused of fraud "a work in progress," and says treatment services have "gotten better." He notes, for instance, that the state requested his organization resubmit roughly $9,000 in non-Medicaid, specialty service claims it billed to the state because officials wanted La Frontera to use a different methodology in the way they charged New Mexico. "We said, 'OK, let's get together,'" he says. "They told us how they wanted to resubmit it—and we resubmitted it."

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