AG: Extra funding would have mental health probe done by end of year

Jan. 24--LAS CRUCES -- New Attorney General Hector Balderas told state lawmakers Friday that with supplemental funding, his office could wrap up the criminal investigation of 15 behavioral health providers accused of Medicaid fraud in six to eight months, much faster than previous AG Gary King had expected it to take to complete the work.

Balderas also said he will decide in the coming days if more of the audit that led to the fraud allegations and Medicaid funding for the 15 agencies being frozen can be released. The audit is under court seal at the request of the Attorney General's Office, which had argued under King that its release could hamper their criminal investigation. The court upheld that in a lawsuit filed by the Sun-News and New Mexico In Depth seeking release of the audit.

In the summer of 2013, the state Human Services Department froze Medicaid funding for 15 behavioral health providers following an outside audit that alleged some $36 million in fraud and overpayments. That audit was then turned over to the Attorney General's Office for a criminal investigation. At the same time, the Human Services Department contracted with La Frontera, a mental-health provider from Arizona, to take over management of the agencies.

As state auditor in his previous job before winning election as AG in November, Balderas had the opportunity to read the complete audit well before he took over the investigation. King told the Sun-News last fall that the criminal probe was so complex, it may take as long as six years to complete.

Speaking to the House Appropriations and Finance Committee on Friday, Balderas said investigations had been completed on three providers, were still in progress for four providers, and had not been started yet for the other eight.

Balderas also informed the committee that he would seek a $1 million supplemental addition to his annual budget request for more staff to work on the investigation. With the extra help, he said they could be finished by the end of the year.

Senate President pro temp. Mary Kay Papen, D-Las Cruces, who has been a vocal critic of La Frontera and the decision by the state to freeze Medicaid funding without giving the agencies a chance to even know what they were specifically accused of, has sponsored legislation intended to provide a concrete definition of what qualifies as Medicaid fraud.

Senate bill 55 would not change what has already happened, but it would attempt to prevent it from happening again, Papen said.

"This is about people knowing what they are being accused of and being able to provide information that either proves or disproves it," Papen said.

The bill would establish three criteria for what would qualify as a "credible allegation of fraud," which would trigger the suspension of Medicaid payments under federal law.

It also stipulates five examples of what would not qualify as a credible allegation of fraud, things like billing and process errors or an inadvertent failure to maintain complete licensing or training records.

"We're trying to allow people to have a fair due process and be able to defend themselves against issues they feel are egregious or untrue," Papen said. "This is America; we're not under Napoleonic law where you're guilty until proven innocent."

Gov. Susana Martinez and other state officials have said that under the new federal health care law they had no choice, and risked losing millions of dollars a year in Medicaid funding if they didn't act to freeze funding.

Matt Kennicott, a spokesman for the state Human Services Department, said he was concerned that Papen's legislation could make it more difficult for the state to combat fraud.

"We are prepared to review and work with sponsors on reasonable legislation. SB 55, in its current form, makes it difficult for HSD to oversee the provision of health care services for those in the Medicaid program," Kennicott said. "Any change in the law must also comply with federal law, and should not interfere with the ability of HSD to prevent potential fraud, waste, and abuse of valuable taxpayer dollars or to make it easier to commit fraud within the Medicaid system."

Walter Rubel can be reached at 541-5441.

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