Behavioral health cuts could take toll on substance-abuse services

In January, Lauren Reichelt, health and human services director for Rio Arriba County, lead a demonstration against behavioral health cuts Saturday at the state Capitol. Jason Stilgebouer/The New Mexican

The New Mexico Human Services Department is canceling planned cuts in rates paid to behavioral health care providers treating Medicaid patients.

The reimbursement rate cuts were set to go in effect Jan. 1. But state Human Services officials reversed course earlier this month on cutting Medicaid reimbursement rates for certain psychiatric and therapeutic services, according to a memo Human Services sent to providers.

The move means financial relief for companies offering mental health and addiction services to patients enrolled in the state and federal program that insures health care for low-income people. But it also means more financial strain on New Mexico’s Medicaid program, which has been on the chopping block this year after reductions in oil and gas revenues the state collects blew a multimillion-dollar hole in New Mexico’s budget.

Gov. Susana Martinez in March signed into law a state budget bill that directed the Human Services Department to slash Medicaid spending by cutting reimbursement rates paid to providers of both physical and behavioral heath care. State officials’ target last spring of $30 million in Medicaid cuts also meant forgoing roughly $110 million in federal matching dollars for the program.

It’s unclear if officials met the $30 million savings goal through reducing other Medicaid payment rates or by cutting elsewhere in the Medicaid program.

Despite volatile state revenues and the gradual reduction in federal Medicaid funding for newly eligible enrollees, which is set to begin in 2017, New Mexico’s Medicaid program continues to expand.

Newly released state figures show that as of November, 888,447 New Mexicans were enrolled in Medicaid, a 6.4 percent increase in a year. That’s 42 percent of the state’s population of just over 2 million.

Kyler Nerison, spokesman for the Human Services Department, did not respond to questions Friday about the department’s reasons for canceling the rate cuts for behavioral health providers.

James Dumesnil, a clinical counselor in Taos who accepts Medicaid coverage, on Friday said the state’s decision to cancel the proposed rate cuts will make a big difference for his solo practice.

If the state had followed through with the cuts, it would have reduced Dumesnil’s reimbursement for an hourlong therapy session with a Medicaid patient to $57.49 from $76.31, a difference of $18.82 per session. Some commercial insurance plans pay up to $120 an hour for the same therapy session, he said.

While Dumesnil welcomed the news that the rate will remain at $76.31, he said gross receipts taxes are increasing and that Medicaid used to pay up to $90 for individual therapy sessions.

“Hopefully, we can make a living being reimbursed at that rate consistently,” Dumesnil said.

Contact Justin Horwath at 505-986-3017 or

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