Six years after the administration of former Gov. Susana Martinez publicly accused 15 behavioral health agencies of overbilling Medicaid by up to $36 million, the New Mexico Human Services Department has reached a settlement with five of those providers.

Ultimately, none of the providers were found to have committed fraud, and the Medicaid overbilling was a fraction of the original estimates.

The settlement, released Wednesday by Human Services, pays $10 million to Santa Maria El Mirador, Border Area Mental Health Services, Southwest Counseling Center Inc., Southern New Mexico Human Development Inc., and Families and Youth Inc. It is the last in a series of payouts to providers the state accused of fraudulent billing practices.

In 2013, Martinez’s administration froze the providers’ Medicaid claims as part of a shake-up in the state’s behavioral health care system. The move led to the closure of several providers’ facilities, the layoffs of hundreds of employees and a halt to mental health treatment for many New Mexicans.

Leaders of the providers involved in the settlement said it’s a good step forward for resuming services and building morale. But they also said such serious damage was done by the allegations that it’s going to take a long time to recover.

“It’s exciting news because we can finally put this behind us,” said Patsy Romero, chief executive officer of Santa Maria El Mirador, formerly Easter Seals El Mirador, in Santa Fe. “But we certainly can’t even begin to really undo what was done six years ago.

“The prior administration … shut down some of the providers without cause, without due process. So lives were lost, adults who were not served ended up in the criminal justice system and children lost out. When you completely destroy something like this, it takes a long time to rebuild.”

Her agency will receive nearly 30 percent of the $10 million settlement, the largest payout among the five providers.

Roque Garcia, spokesman for three of the providers involved in the settlement, agreed.

“It sounds like a lot of money, but … it’s not enough to really reestablish ourselves. But it will help bring up some services,” he said. “I see it more as seed money to start up services that we need, like psychiatric care.”

Garcia called the six past years “a nightmare” and said the agencies in question lost well over 100 employees during the investigation.

William Daumueller, chairman of the board of directors for Southwest Counseling Center Inc., said the state initially said the center overbilled by well over $2 million. The final amount turned out to be less than $500.

“Obviously, that is quite a difference,” he said. “Had they given us a chance right off the bat to correct the records that they said were wrong, we could have proven they were wrong.”

He was referring to the fact that Martinez’s administration did not allow the organizations under scrutiny to review or respond to an auditor’s findings that led to the accusations or dispute the Human Service Department’s move to cut off Medicaid funding to many of the providers.

Daumueller said he is glad the settlement will help some providers amp up services but said he’s not sure when the money will be paid out.

“Typically, money rides a slow horse here,” he said.

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General Assignment Reporter

Robert Nott has covered education and youth issues for the Santa Fe New Mexican. He is assigned to The New Mexican's city desk where he covers a general assignment beat.

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(1) comment

Chris Mechels

More politics. AG Hector Balderas cares little for the law, breaks it all the time. We can bet this "clearing" of the Medicare providers has little to do with facts. Martinez wasn't wrong ALL the time, and we can bet there was some fraud, esp as the Richardson administration was so corrupt. But, that's New Mexico. Not much truth, little respect for the law, lots of politics.

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