The recent controversy over the state Human Services Department’s decision to defund 15 behavioral-health Medicaid providers — after an outside audit reportedly found evidence of widespread fraud — is a complex matter that has raised many questions and sparked a lot of emotions.
Here’s a primer to answer some of those questions about the controversy and how it affects both clients and the general public.
To start with the most basic question:
What does “behavioral health” mean?
This is a term that in professional circles has replaced the term “mental health.” Some believe that “behavioral health” is less stigmatizing than the older term. In additional to traditional mental-health conditions, behavioral health also includes the treatment of addictions.
What’s going to happen to the 30,000 clients of the providers whose services have stopped or soon will cease?
Last week, federal District Judge Christina Armijo — while denying a petition by eight providers to restore funding — expressed concern about the clients. “Many of these clients have developed beneficial therapeutic relationships with [the providers’] health care clinicians, who have not been accused of any wrongdoing by [the Human Services Department],” Armijo wrote in her decision. “… It is a concern of this Court that despite [Human Services’] efforts to ensure continuity of care … there could be a disruption of the delivery of critical mental health services in some instances.”
Some of the providers have begun furloughing their employees. TeamBuilders, a Santa Fe-based firm, gave the state 30 days’ notice that it would no longer take Medicaid clients.
According to Matt Kennicott, a spokesman for Human Services, the effect on the clients should be minimal. Through no-bid emergency contracts, the department has lined up five Arizona companies to take over management of the caseloads, at a cost of up to $17.8 million. Kennicott said last week that the Arizona companies have agreed to rehire all doctors who have been seeing patients under agreements with the current providers.
“People can go ahead and show up to any appointments they’ve made,” he said. “They can get their prescriptions filled just as before. This has been our top concern and that’s why we felt we had to move so quickly on this.”
Critics of the administration have expressed doubt, however, and have speculated that some of the doctors might not want to sign on with the Arizona companies.
The chief operating officer of one of the companies, Daniel Ranieri of La Frontera Center, admitted to The Taos News last week that he anticipates “turbulent weeks” ahead as his company takes over Southwest Counseling in Las Cruces.
But Ranieri said that most of Southwest Counseling’s employees have already been added to the payroll of La Frontera New Mexico and that the remaining employees would be added within days. “When we go in, the first thing we need to do is establish stability,” Ranieri told the Taos paper. “Once that is in place, we will be providing a massive amount of training.”
What led to the audit of the 15 providers?
According to a sworn affidavit filed in a recent court case, the Human Services Department’s Behavioral Health Services Division director, Diana McWilliams, said that in 2012, OptumHealth, the company that oversees the state’s managed-care program for behavioral health, “purchased and implemented new software tools to enhance detection of fraud, waste and abuse.”
Late last year, McWilliams said, “Optum presented findings based on a claims review using the new software that aberrant billing practices had occurred throughout Optum’s network.”
Because of those findings, the department hired an outside auditor, Public Consulting Group from Boston, to conduct an “in-depth audit” of the 15 providers. The $3.2 million contract was not put out to bid. Department Secretary Sidonie Squier said that was because the situation was an emergency.
“In April 2012, [Public Consulting Group] informed me that approximately 71 percent of all randomly sampled claims failed,” McWilliams said in the affidavit.
The overpayments ranged from $21,874 for one provider, not named in the executive summary, to nearly $9.6 million for another, also unnamed.
On June 21, there was a meeting between department officials, representatives from the attorney general’s Medicaid Fraud Control Unit, representatives from the U.S. Attorney’s Office, representatives from the state Taxation and Revenue Department and the FBI.
At this meeting, Public Consulting Group presented its findings that showed all 15 providers had failed the audit. The Medicaid Fraud Control Unit agreed to investigate what McWilliams described as “credible allegations of fraud.”
Three days later, Human Services officials and Public Consulting Group representatives met with the chief executive officers of the 15 providers to inform them about the findings and the attorney general’s investigation.
Who are the providers?
The 12 providers who have had all of their funding frozen are TeamBuilders; Border Area Mental Health Services Inc. (Reserve); Counseling Associates Inc. (Roswell); Families and Youth Inc. (Las Cruces); Southern New Mexico Human Development Inc. (Anthony); Southwest Counseling Center Inc. (Las Cruces); The Counseling Center Inc. (Alamogordo); Valencia Counseling Services Inc. (Grants); Hogares Inc. (Albuquerque); Partners in Wellness Inc. (Albuquerque); Pathways Inc. (Albuquerque); and Youth Development Inc. (Albuquerque).
Easter Seals El Mirador in Santa Fe and Presbyterian Medical Services, which operates statewide, have been given partial release of funding.
Service Organization for Youth in Raton was the only provider given a full release of funding “with intensive management oversight, retraining, pre-payment review of claims and retroactive recoupment of funds.”
What specific allegations were in the audit?
Nobody knows — except, assumedly, the people at the June 21 meeting and attorney general investigators who have since been assigned to investigate.
Human Services has even refused to share the audit with legislators and the providers themselves. Both the department and the chief deputy attorney general have said this secrecy is necessary to make sure the investigation isn’t jeopardized.
The department refused to hand over the audit to state Auditor Hector Balderas, though last week an agreement was reached to give the state auditor access.
Others disagree with the need for secrecy. Eight of the defunded providers in a federal lawsuit against Human Services say it’s not fair that they can in effect be publicly accused of fraud but can’t defend themselves because they don’t know exactly what they’re being accused of. And last week, the New Mexico Foundation for Open Government called upon the department to release the audit.
Was the audit legitimate?
Human Services says yes. Some critics say no.
Public Consulting Group looked at 150 randomly selected billing claims from each provider as well as a year’s worth of casework document for selected patients.
Eight of the providers who sued unsuccessfully to force the state to unfreeze their funds, point to similar work that Public Consulting Group did in North Carolina for that state’s Health and Human Services Department.
North Carolina state Auditor Beth Wood wrote a scathing audit of that work, saying PCG’s overpayment figures were “unreliable.” One North Carolina provider that allegedly overcharged the state by more than $1.3 million actually had overcharged by less than 2 percent of that amount, Wood said.
But federal judge Armijo, in her decision to deny the providers’ petition, wrote, “Although this evidence would be fodder for cross examination at trial, it is insufficient to establish that PCG’s New Mexico audit was unreliable.”
Why were the providers defunded before the attorney general completes his investigation?
This is required by federal Medicaid regulations, both the Human Services Department and the Attorney General’s Office say.
Recently, Human Services released an email from Brian Cooke, media relations director for the federal Centers for Medicare and Medicaid Services, that said his agency, based on “information currently available,” believes Human Services “acted in accordance with federal regulation and CMS guidance in imposing the temporary payment suspension.”
But when questioned by The New Mexican recently, Cooke declined to say whether the state had no other choice but to immediately suspend the payments.
Federal regulations include several “good cause” exceptions that allow them to keep making some or all payments, including in situations where patients’ access to services would be jeopardized.
In fact, another spokesman for the Centers for Medicare and Medicaid Services previously had told New Mexico In Depth, “States do not have to suspend payments if they can show good cause for not doing so.”
Questioned about the two statements from his office, Cooke declined to comment. He also declined to say whether a serious need in rural areas for behavioral health services could be considered “good cause” for an exception to the suspensions.
After their funds were frozen, all 15 providers filed for “good cause” exceptions. All but three were denied, and two of the three only were granted partial funding.
How much are the Arizona companies being paid?
Agave Health Inc., doing business as Southwest Behavioral Health Services Inc., potentially is making the most money of the five. Its contract amount is up to $7.1 million. Of the others, La Frontera Inc. will be paid up to $4.75 million; and Southwest Network Inc., Lifewell Inc. and Valle del Sol Inc. will each be paid up to $2 million.
What happens next?
The Arizona companies will begin taking over management of the New Mexico providers. Chief Deputy Attorney General Al Lama said last week that he hopes that within two months his investigators will have enough information to determine whether there is evidence to proceed with actions against individual providers.
The attorney general might be able to clear some of the companies by then, Lama said, and there might be cases in which individual providers could pay back overcharges without being prosecuted on criminal charges.