NM’s Human Services Department accused of mismanagement

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE, N.M. — New Mexico‘s Human Services Department yanked the Medicaid funding for 15 behavioral health care providers last summer, citing credible allegations of fraud in their respective companies.

Now, the department itself is facing accusations of poor oversight and mismanagement.

On Thursday afternoon, State Auditor Hector Balderas released an audit of the HSD’s handling of the transition of the 15 providers, claiming the department made a series of financial mistakes, ranging from failing to collect $60.2 million in federal Medicaid funds to approving duplicate per diem reimbursements totaling $115 in alcoholic beverages to a contractor hired by the department.

HSD “should hold itself to the same high standard of accountability that it demands from organizations that receive federal funds,” Balderas said in a statement.

New Mexico Watchdog emailed HSD officials a copy of the audit and asked for a response but so far we have not heard back.

The controversy has been a bitter and complicated one ever since HSD Secretary Sidonie Squier suspended funding for the behavioral health providers last June.

The decision came after a Boston-based audit firm, Public Consulting Group, Inc., alleged $36 million in potential fraud on the part of the 15 health care providers across the state.

HSD officials say they have been safeguarding taxpayers as well as clients of the behavioral health facilities, but critics say the department has been heavy-handed at best and at worst, has run some of the providers out of business.

The providers say they haven’t been able to defend themselves against the charges and they haven’t been able to see the details of their cases, which have been handed over to the New Mexico Attorney General’s Office, which has kept them confidential while it investigates the charges.

In November, two providers agreed to pay a combined $4.24 million due to alleged improper billing and were reauthorized to treat clients by HSD.

On Thursday, Balderas announced the results of his office’s own review of HSD for the 2013 fiscal year, which was done by CliftonLarsonAllen LLP, an independent auditing firm working with the state auditor’s office.

The audit included accusations that HSD:

*improperly paid $620,383 to five behavioral health providers from Arizona that were hired by HSD to replace the 15 suspended providers and approved advance payments to two of the Arizona providers totaling $187,896

*improperly paid $7,000 to Public Consulting Group Inc., for “certain inappropriate costs,” including a reimbursement of $115 for alcoholic beverages

*failed to make timely requests for federal reimbursements that totaled $60.2 million in federal funds that were not collected

*in its referrals regarding the 15 providers, HSD “circumvented established requirements” when it made its accusations of credible allegations of fraud

The auditor’s office has no law enforcement authority, but Balderas said his findings will be turned over to the office of New Mexico Attorney General Gary King.

The findings will also be sent to the federal Centers for Medicare and Medicaid Services and the U.S. Department of Health and Human Services, as well as to Roundhouse members of the Legislative Health and Human Services Committee. Democrats on the committee have been harshly critical of Squier and HSD.

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski

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