An administrative judge with the state Human Services Department has found that Teambuilders Counseling Services, a mental health agency the department accused of overbilling Medicaid by $12 million in 2013, owes only $896 for billing errors.

But the dispute between Teambuilders and the state appears to be far from over. The finding by administrative judge Chester Boyett last month was only a recommendation, and the state’s Medicaid director has reversed it, directing the state agency to seek roughly $2 million from Teambuilders.

Knicole Emanuel, an attorney for Teambuilders, on Friday said the company plans to appeal.

“We are going to appeal the state’s reversal of the administrative law judge’s findings, and we think we have a fantastic record for appeal,” Emanuel said.

The dispute is the latest in the long-running controversy surrounding the Gov. Susana Martinez administration’s 2013 behavioral health shake-up, which flung the state’s treatment services for substance abusers and the mentally ill into disarray.

Teambuilders was one of 15 companies the administration accused of overbilling Medicaid by a total of $36 million. Human Services cut their Medicaid funding, putting several of them out of business. The Attorney General’s Office later found no evidence of criminal wrongdoing by any of the companies.

Human Services’ administrative law judges previously denied three providers’ appeals of allegations that they owe the state millions of dollars in overpayments from Medicaid, the state-federal program that provides health coverage to low-income residents.

But the latest ruling by Boyett marks a rare instance of a state official publicly splitting with the Martinez administration in the behavioral health shake-up.

Officials with the Human Services Department and the Governor’s Office did not answer questions emailed late Friday. Chris Sanchez, a spokesman for the governor, said he would need more time to answer questions about the Teambuilders case.

Teambuilders and other providers have argued they should only have to repay claims in which there is undisputed evidence of overbilling Medicaid for patient treatments.

For Teambuilders, state officials are using the controversial practice of extrapolation to conclude the provider overbilled Medicaid by $2 million. Officials arrived at that figure by reviewing a sample of 150 Medicaid reimbursement claims Teambuilders submitted over a three-year period. Officials then applied the error rate in that sample — 11 improper claims out of 150 total claims — to tens of thousands of requests for Medicaid reimbursements in that time period.

Boyett rejected the state’s use of extrapolation in Teambuilders’ case, saying state officials improperly included non-Medicaid claims in the sample.

But Nancy Smith-Leslie, the state’s Medicaid director, instructed the department to again use extrapolation for Teambuilders’ claims in a Nov. 2 decision overturning Boyett’s finding.

Boyett’s findings detailing the improperly billed Medicaid claims don’t fit with the Martinez administration’s portrayal of Teambuilders and other providers intentionally defrauding the program.

Rather, the improperly billed claims amount to shoddy bookkeeping practices that don’t comply with what Boyett called the “extremely rigorous standards” of Medicaid billing rules.

For two clients, a Teambuilders therapist “lists the starting time, but the ending time was not included” on the billing note for the sessions that cost Medicaid $69 each.

For another session, worth $66.93, a therapist’s visit to a child’s home for a session violated Medicaid rules because the service definition for this type of therapy “is for those situations where family members are present but the client is absent.” The child was present, according to Boyett’s findings.

Teambuilders improperly billed another $63.80 claim for a psychiatric evaluation because there was no comprehensive treatment plan for the client. In another case, a therapist provided treatment without having the master’s degree required for reimbursement under a Medicaid billing code.

Citing an audit by Boston-based Public Consulting Group, state officials initially alleged Teambuilders owed taxpayers $12 million based on 41 of 150 Medicaid claims they said were noncompliant. Auditors arrived at the $12 million figure through extrapolation.

Teambuilders attorneys have successfully argued that only 11 claims worth $896 did not comply with the rules.

Contact Justin Horwath at 505-986-3017 or

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