Three summers ago, a Santa Fe mother read in a newspaper that New Mexico would immediately stop vital federal payments to 15 mental health providers, including an organization that cared for Athan, her autistic son.

"The first thought I had was, Oh my God. This is going to be bad," she recalls, asking SFR to keep the family's identity confidential. "We had just got everything worked out. We just found the right combination of people. It took us about 10 years to really assemble a team of behavioral health providers that knew our child."

Born at 25 weeks, Athan lived his first four months at Phoenix Children's Hospital in Arizona. There were no neonatal intensive care beds available in New Mexico. After discharge, he wore an oxygen mask for a year.

Doctors diagnosed Athan with a host of mental illnesses and developmental disabilities, including ADD, ADHD, OCD and pervasive developmental disorder. By 12, he was diagnosed with autism.

At home and at school, he exhibited typical behaviors associated with autism and learning disorders. Athan still has trouble understanding facial expressions and figures of speech. He doesn't socialize much with others, sometimes dropping out of conversations midsentence. He excels with computers but struggles with math.

Dr. Lorraine Freedle
Dr. Lorraine Freedle | Courtesty

In 2008, Athan's parents took him to see Dr. Lorraine Freedle, at the time the only board-certified pediatric neuropsychologist working in Northern New Mexico. Freedle and her husband, Shannon, operated a nonprofit called TeamBuilders that oversaw about 125 clinicians statewide. Part of that organization was a program called Zia that provided outpatient therapy to children.

TeamBuilders used a "system of care" approach to treatment, a philosophy popularized in the '90s holding that children with special needs require a network of dedicated services and natural support to thrive. "It's not just about combining professional services, but mobilizing a community to meet the needs of a child," Freedle says.

The psychologist evaluated Athan and referred his family to providers she felt would aid his development, among them, a speech therapist, physical therapist and occupational therapist. TeamBuilders also provided behavioral management specialists who accompanied Athan at a special school run by Zia, at the time a partnership between the organization and Santa Fe Public Schools.

Whenever Athan's parents noticed a new issue with their son's development, they called Freedle for help. For example, when he started falling over more than usual, Freedle referred the parents to a sensory integration therapist to help him with his balance. If Athan had a meltdown in public, his parents would call on TeamBuilders for one-on-one coaching.

"They provided us with, not just our own child's individual needs, but also our family's as well," Athan's mother says. "How would I know sensory issues are even a thing, unless I talked with someone who did know that?"

The news that TeamBuilders would no longer receive payments for Medicaid meant fallout for everyone. Even though the family had private insurance to help pay for services, the nonprofit shut down less than two months after the freeze.

"Right when he needed a level of consistency and support, it fell apart," she says.

Ever since the so-called "behavioral health shakeup" rocked the core of New Mexico's mental health network, the timeline of events that led up to the disruption has been carefully chronicled by media across the state.

In 2012, OptumHealth, a company contracted by the state to manage Medicaid funds for mental health services, claimed that it had uncovered suspicious billings among 15 providers, prompting Gov. Susana Martinez and her Human Services Department to invite the Massachusetts-based Public Consulting Group to audit the organizations in question. On June 24, 2013, the department informed each provider that they were under investigation for fraud and that it would suspend Medicaid payments while the attorney general's office got to work.

The next day, the department hired five Arizona-based providers to quickly move in and pick up the monumental caseload left by the audited organizations, accounting for about 87 percent of all Medicaid and state-funded non-Medicaid mental health spending.

For many of the affected providers, the shakeup meant the end of business. Survivors, with the exception of two that settled with the state, exist as shells of their former selves, either drastically reducing services or running solely for administrative purposes. An estimated 30,000 Medicaid clients, plus an unknown number of private-payer or out-of-pocket patients, had their services disrupted or cut during the hand­over to the Arizona firms.

Further scrutiny by media, lawmakers and the attorney general's office has raised serious questions about the Martinez administration's role in the debacle. Just a month after the news broke, New Mexico In Depth spoke with experts who say the administration jumped the gun on freezing payments, pointing to federal regulations that grant states considerable discretion in determining whether to suspend Medicaid services from mental health providers, even during fraud investigations.

The Santa Fe New Mexican revealed in 2014 that the state started paying one of the Arizona providers, Agave Health, before Public Consulting Group even began its audit. And a 2015 investigation by SFR unveiled how United Healthcare, OptumHealth's parent company, quietly donated $25,000 to the state Republican Party Committee before the Martinez administration awarded the company its contract to manage Medicaid funds for mental health providers.

In May, three members of New Mexico's federal congressional delegation called on the US Justice Department to find out what happened and why, citing state actions that "prevented thousands of New Mexicans from getting the care they needed, wasted millions of taxpayer dollars, and cost hundreds of New Mexicans their jobs." Meanwhile, many of the providers have taken their own cases to federal court, filing due process lawsuits against the Human Services Department.

Outrage amplified in April when Attorney General Hector Balderas cleared the last two providers accused of fraud, including TeamBuilders, of any criminal wrongdoing. Building on an investigation initiated by former Attorney General Gary King, Balderas' office found regulatory violations and $1.6 million in overbillings—the PCG audit initially claimed $33.8 million. It did not find evidence of fraud by any of the 15 providers.

The Martinez administration maintains it did nothing wrong, but a spokesman for the Human Services Department did not respond to SFR's request for an interview or answer questions about the disruption for patients. Instead, spokesman Kyler Nerison emailed this statement: "Access to behavioral health services has increased by 75 percent for New Mexicans since 2013, and our top priority is protecting that access and maintaining care for those who need it."

Indeed, state data provided by Nerison shows that the number of individuals receiving mental health treatment increased from 86,229 in 2013 to 153,031 in 2015. The Human Services Department attributes much of the growth to the state's 2014 Medicaid expansion, which resulted from the Affordable Care Act.

But some providers and clients say the Medicaid freezes dismantled a network decades in the making in New Mexico, leaving a vulnerable population in the hands of organizations unfamiliar with the communities they were assigned to care for.

"These service providers had a comprehensive approach to meeting the full needs of individuals," says Mark Johnson, CEO of Easter Seals el Mirador in Santa Fe, another one of providers accused of fraud. "Today, what you have is money available, but they don't take a comprehensive approach to service delivery."

"All these relationships were severed," says Freedle of TeamBuilders. "It will take generations to repair."

Shortly after Agave took over TeamBuilders' Northern New Mexico patients, Athan's caseworker left. (A memo obtained by SFR in 2014 found that Agave shortly fell into financial trouble, cutting employee pay and demanding greater productivity.)

Since Agave offered certain services solely to Medicaid patients, Athan no longer had access to afterschool respite programming that was previously offered at a wellness center across from the Zia School.

But what really hurt the most was a loss of expertise—the "system of care" network that Athan's family relied on for years. Athan's mother no longer had Dr. Freedle to turn to, and generally, the staff at Agave, she felt, was simply not up to par.

"The new people who came in were so poorly trained and so poorly paid that it just created more chaos for us as a family," she says. "His providers were coming and going, and there wasn't any stability there."

The instability couldn't have come at a worse time. Around the time of the shakeup, Athan's behavior worsened. Then 13, his outbursts became more frequent and violent. School staff had to restrain him three or four times a day.

"There is nobody [at Agave] that knows him," Athan's mother says. "There is nobody that knows us. There is no history. There is no one there anymore that could really be our safety net for our family."

Anson Stevens-Bollen
Anson Stevens-Bollen | Anson Stevens-Bollen

In July 2014, Athan encountered a crisis. His parents took him to Agave, but the organization did not have someone on staff who could conduct the right kind of evaluation. Following a referral, the family took Athan to the University Neuropsychiatric Institute in Salt Lake City, where he stayed for three weeks. After a doctor determined that Athan would be best served in a residential treatment facility, a hospital social worker searched for an appropriate place.

"In New Mexico, there was no other alternative for us to get the help he needed," she says. "We looked and we tried, and we did all we could to keep him in the state. We saw with the crumbling infrastructure of the behavioral health system that it would be so much more difficult for us to find the right place to provide for him what he needed."

Athan moved to a residential treatment facility in Utah, where he's lived ever since.

The move actually avoided another potentially disruptive transition. In April of this year, Agave announced it would leave New Mexico, the third Arizona provider to pull out since signing a contract with the state in 2013. Presbyterian Medical Services, one of two organizations that settled its litigation with the Human Services Department, picked up Agave's caseload this month—the third provider in three years for thousands of mental health patients in Northern New Mexico. It's a revolving door that spins all over the state.

Donna first came into contact with Southwest Counseling in 1988, after she tried to kill herself by swallowing Tylenol. She had been distraught over "boyfriend issues."

After a stay at Memorial Medical Center in Las Cruces and some time on a waiting list, Donna moved into Transitional Living Center, a group home for people with substance abuse problems and mental illness. She lived there for about a year, then cycled in and out of the home, returning periodically after breakdowns and suicide attempts.

Donna, who asked SFR not to publish her real name, didn't mind living at the group home when she did. At Transitional Living Center, she learned basic life skills like cleaning and setting goals. She became a decent cook, skilled enough that staff paid her to prepare meals for other residents.

Covered by Medicaid, Donna also started using other services offered by Southwest Counseling. During her first stay at the group home, she received psychosocial rehabilitation, treatment aimed at helping people with mental illness function in a community. Clients simply called it PSR. Five days a week, Donna hitched a ride or rode a shuttle to the clinic.

Along with seeing a case manager and a counselor, Donna also attended a number of groups that Southwest Counseling paid for out of pocket. She'd paint nails during women's group and get fresh air during walking group. Meditation group taught her a new coping skill.

Over the years, she started going to the hospital less frequently, moved into her own apartment, and achieved a level of self-sufficiency she had never had before. But she never stopped going to groups. "It is what I did the most," she tells SFR over breakfast at The Village Inn Restaurant in downtown Las Cruces.

Donna, who was diagnosed with schizoaffective disorder and borderline personality disorder by Southwest Counseling staff, has dark skin and cropped hair. She compulsively chews bubble gum and punctuates her sentences with the phrase, "You know what I mean?"

One day during the summer of 2013, she says she went to the clinic on Griggs Street and saw staff members leaving the building with boxes. "People were acting different. So I said, 'What's going on?' There were rumors and stuff. And they said, 'Don't worry about it.' And I said, 'What do you mean, don't worry about it?' And I took my computer, and I looked it up, and I saw what was going on."

Southwest Counseling was caught up in fraud allegations, and the Martinez administration had tapped La Frontera, another Arizona-based mental health provider, to take over its clients and facilities.

The changes were drastic. La Frontera scrapped all of Donna's groups and dropped her therapist. The Transitional Living Center closed. Citing financial troubles, the organization laid off about 14 percent of employees. Donna says, of the services she used, only case management and medication management remained. She felt stressed during this period, her hair falling out and stomach acting up. With her community stripped away, "I just basically stay home most of the time," Donna tells SFR.

It's not just the clients who felt uncomfortable with La Frontera's takeover. In a lawsuit filed against Optum's parent company, UnitedHealth, the organization itself states that prior to coming to the state, it "consistently voiced its reluctance to expand into New Mexico for reasons related to complexity, timing and cost." The lawsuit accuses UnitedHealth of fraud and misrepresentation, alleging that the organization failed to provide adequate cash and resources to help with the transfer.

La Frontera officials did not respond to a request for comment.

Last summer, Donna was feeling depressed. She tried calling a crisis line run by La Frontera, but nobody picked up. "So I took a bunch of pills, and then I called them back and said I took a bunch of pills." La Frontera staff drove over to her apartment and called 911. She went back to Memorial Medical Center.

"Do they know that a lot of us are hurting? That it doesn't help us that we don't have things to do? Because it helps us physically and mentally, these things to do," she says.

La Frontera left the state in July 2015. La Clinica de Familia, a community primary care provider, took over its facilities and client list. In contrast to Presbyterian Medical Services' takeover in Northern New Mexico, La Clinica did not have much experience with mental health care. It had to build from the ground up and got off to a slow start. As the Las Cruces Sun-News reports, the organization struggled to fill enough positions to meet the high demands of the community.

Donna says she has a new therapist and is doing better now. She hasn't been back to the Memorial Medical Center since last summer.

Three Years, Three Providers

On Thursday, workers affixed a sign bearing the logo of Presbyterian Medical Services to a family wellness center off Camino Entrada, the third organization’s name to grace the facility in three years.

Painters rolled pale-yellow pigment over the interior walls, while parents signed their children up for services. A bulletin board, a remnant from the facility’s previous occupant, celebrated the “awesome teamwork” and propensity to “go above and beyond” of former Agave Health employees.

The dismantling of New Mexico’s mental health infrastructure, and subsequent departure of three-fifths of the Arizona providers called in to do damage control, has raised questions about how the state plans to rebuild the network of services for people with mental illness.

The exodus of Agave, a nonprofit selected in 2013 to take over mental health clients in Northern New Mexico, is just the latest move in three turbulent years that has forced the state to once again search for organizations to fill service gaps stemming from the so-called “behavioral health shakeup.” This time around, the payors who administer behavioral health contracts for the Martinez administration looked in-state for relief.

A PMS sign is already mounted on the Camino Entrada building that formerly housed TeamBuliders, then Agave.
A PMS sign is already mounted on the Camino Entrada building that formerly housed TeamBuliders, then Agave. | Steven Hsieh

Presbyterian Medical Services, one of the 15 providers investigated for fraud by the Martinez administration, agreed in April to pick up most of the mental health patients treated by Agave. Earlier, it picked up clients from La Frontera and Turquoise. (The organization, not to be confused with the statewide Presbyterian Healthcare system, settled with the Human Services Department in November 2013. It paid the state $4 million in alleged overbillings, although the organization maintains it did not commit fraud.)

Steven Hansen, CEO of Presbyterian, tells SFR the organization picked up approximately 1,200 clients and 75 staff, with plans to hire an additional nine. But, Hansen adds, “Licensed therapists are hard to find, as many have left the state.”

“Our biggest concern is making sure there is continuity of care,” Hansen says. “Second is, most of these people we are hiring, and have hired, have gone through this trauma of getting nervous about losing a job, getting a job. We are working on calming their fears and letting them get to know us as an organization.”

Terry Sine, clinical services director for Presbyterian’s new location on Camino Entrada, says the organization has already initiated an outreach campaign to Agave’s former clients, making phone calls, writing letters and even knocking on doors. Inside the building, he showed SFR a respite room, where children can “chill and hang out,” filled with old couches that will also be cycled out during the ongoing transition.

“I don’t know whose furniture that is,” Sine says. “It could even be TeamBuilders’ furniture,” he adds, referring to the organization that originally developed this center.

For organizations that didn’t recover from the shakeup, it’s been more difficult to restart mental health services in the state. Despite the attorney general’s decision not to pursue fraud charges against providers implicated in a 2013 audit, the state is still demanding payment from the affected organizations before it will reinstate their Medicaid certifications. Most of the providers relied on Medicaid funding to keep the lights on.

TeamBuilders co-founder Lorraine Freedle says that on April 7, a week after Agave’s announcement that it would leave the state, she and her husband expressed interest in picking up some of the organization’s caseload. But they were not contacted when the state’s contractors who manage Medicaid funds released a request for information soliciting interested providers.

A spokesman for the state Human Services Department said its Medicaid contractors are in charge of that process.

“Our hands are tied at this point,” Freedle tells SFR.

Easter Seals el Mirador, another nonprofit that had its Medicaid funding cut after five years of providing mental health care for children, also has interest in reopening those services. (A separate wing of the organization focusing on developmental disabilities is in operation.)

“None of the other providers that are decertified, so to speak, are allowed to re-enter the system as a Medicaid provider. What we’re hearing from the department is they still haven’t resolved the issue of overpayments,” says Patsy Romero, the organization’s chief operating officer. “If we’re able to, would we want to help rebuild the behavioral health structure? Well, yes. Our hearts are in it. But right now, we are not allowed to.”