Attorney General Hector Balderas announced Tuesday that his office has cleared the final two behavioral health providers under investigation for possible fraud.
That means all 15 health organizations Gov. Susana Martinez’s Human Services Department (HSD) chose to freeze Medicaid funding for in 2013 have been cleared of any criminal wrongdoing.
“Our thorough investigation of the providers concluded that there was not a pattern of fraud, despite the actions of the Human Services Department in finding credible allegations of fraud and freezing funding to 15 providers across New Mexico in 2013,” Balderas said in a news release.
In a letter informing lawmakers of the conclusion of the wide-ranging investigation, Balderas wrote that his office found some regulatory violations and is forwarding the results to HSD, which could seek repayment if it deems that organizations overbilled Medicaid.
HSD’s 2013 Medicaid freeze sparked a chaotic transition. There were disruptions in service to patients. Many New Mexico-based companies and nonprofits — which had been providing services like drug treatment and suicide counseling to an estimated 30,000 people — went out of business and were replaced by the Arizona companies.
Three of those five Arizona companies have now closed up shop in New Mexico. The state’s behavioral health system remains in disarray. The system is facing regular turnover and bogged down by legal battles.
There were problems in the system before HSD froze Medicaid funding three years ago. Overbilling has been identified, and the administration has recovered more than $4 million from two companies. But many believe HSD’s decision to freeze the 15 organizations’ funding was a dramatically disproportionate response that put tens of thousands of New Mexicans at risk unnecessarily.
Balderas said it’s now on HSD “to take timely and appropriate administrative action to resolve this regrettable situation to ensure that tens of thousands of vulnerable New Mexicans receive their critical services.”
“The department must find a way to fight fraud that does not put services to the most vulnerable at risk or result in hundreds of New Mexicans losing their jobs,” he said.