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AG’s office says Obamacare vests power in HSD in behavioral health controversy

By   /   July 25, 2013  /   No Comments

Roundhouse Democrats are spitting mad, demanding that funding be restored to 15 behavioral health providers across the state.

But in a profound political irony, the deputy chief of the New Mexico Attorney General’s Office said Thursday that changes in federal statute due to President Obama’s Affordable Care Act have vested sweeping powers into the hands of the state agency directors in charge of Medicaid.

And in New Mexico, that person is Human Services Secretary Sidonie Squier, who suspended payments in the first place.

THWARTED: An official with the NM Attorney General's Office told members of a committee that due to the Affordable Care Act, the secretary of the Human Services Department has sweeping powers when it comes to Medicaid funds in the state. NM Watchdog photo.

THWARTED: An official with the NM Attorney General’s Office told members of a committee that due to the Affordable Care Act, the secretary of the Human Services Department has sweeping powers when it comes to Medicaid funds in the state. NM Watchdog photo.

“The ACA made a significant change in how Medicaid fraud is investigated,” Al Lama of the Attorney General’s Office told members of the Legislative Health and Human Services Committee on Thursday. “The attorney general’s office cannot advise the (Human Services Department) … because that’s not authorized by federal law … We don’t carry the same sort of discretion to make determinations … That rests with the agency director.”

Earlier this summer Squier suspended funding for 15 behavioral health providers after the Boston-based audit firm known as Public Consulting Group, Inc., alleged $36 million in potential fraud. HSD then turned the finding over to the Attorney General.

The providers have cried foul, saying the allegations have tarred their reputations and that the funding suspensions have forced them to layoff employees, put their companies on the financial brink and jeopardized care to patients throughout the state.

At Thursday’s committee hearing, some members demanded that the attorney general’s office intervene.

But Lama said the new federal statute essentially gives agency directors in respective states a great deal of authority if they deem “a credible allegation of fraud determination is made.”

“It’s not only within (Squier’s) authority, it’s also her responsibility,” Lama told New Mexico Watchdog. “The feds mandate all of this for all of us.”

Pointing to some of the details of the federal code, Sen. Jacob Candelaria, D-Albuquerque, debated whether Lama’s interpretation was correct, saying. “I take offense at being told over and over that (the wording) is crystal clear.”

Acknowledging that Squier “has full discretion, full authority to act,” Sen. Nancy Rodriguez, D-Santa Fe, said, “I implore the Secretary of HDS to reallocate those funds.”

Squier did not attend the hearing. Last month, Squier walked out of the committee’s meeting that turned divisive when she clashed with some members.

HSD spokesman Matt Kennicott told New Mexico Watchdog that Squier received a phone call “late yesterday” to appear before Thursday’s committee meeting. “If we had received the invitation earlier we would have made a significant effort to attend,” he said. Kennicott said Squier is open to attending future LHHS meetings.

Earlier in the day, Lama reported the attorney general’s office has committed staffing that amounted to 17 employees — including four criminal investigators — to look into the allegations.

“We believe that within 2-3 months — and that’s not a firm deadline — we will be able to make initial assessments,” Lama said.

“These agencies are going to be dead in 2-3 months,” Sen. Gerald Ortiz y Pino, D-Albuquerque, said. “There’s no appeal (for the 15 providers), there’s no information, there’s nothing … Until there’s some findings, let’s keep things going, watch them like a hawk. Why bring in Arizona companies?”

HSD has budgeted $17 million for several companies based in Arizona to pick up the slack while the investigation continues. Nine days ago, Republican Gov. Susana Martinez told reporters, “We’re not going to leave people without services.”

“It’s frustrating,” Rep. Sandra Jeff, D-Crownpoint, said. “My area has high unemployment and high rates of mental illness. Our governor always campaigned on transparency … We’re getting auditors who aren’t even from New Mexico.”

“This is destroying mental health in the state of New Mexico,” said Senate Pro Tem Mary Kay Papen, D-Las Cruces. “This could be just a few IT mistakes but (companies’) reputation is impinged … Two months will kill the system.”

“We’ve got a lot of finger-pointing going on here,” said Sen. Lisa Torraco, R-Albuquerque.

Rep. Miguel Garcia, D-Albuquerque, even called for the attorney general’s office to consider taking “one of the investigators looking into these allegations and apply it to Secretary Squier” to look into “criminal intent to sabotage behavioral health services in our state.”

“That’s ludicrous,” HSD’s Kennicott said. “We’re the ones who conducted the initial investigation, passed it on to the attorney general … We identified these problems. That’s a ludicrous statement by Rep. Garcia.”

Meanwhile, in a setback for providers, U.S. District Court Judge M. Christina Armijo late Thursday afternoon ruled against granting a temporary restraining order that would have restored Medicaid funding to eight of the 15 companies under investigation.

In a 17-page ruling, Judge Armijo said that while the court was concerned “there could be a disruption of the delivery of critical mental health services in some instances” the eight providers “failed to fulfill their heavy burden to establish they are entitled to the extraordinary remedy” of a temporary restraining order.

Update: Page 7 of the judge’s decision cites federal statute “requires a Medicaid agency such as HSD to ‘suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud … unless the agency has good cause to not suspend payments or to suspend payment only in part.’ ”

Here’s Judge Armijo’s decision:

Armijo Ruling

Contact Rob Nikolewski at rob@nmwatchdog.org and follow him on Twitter @robnikolewski


Rob formerly served as staff reporter for Watchdog.org.

  • Francis

    Asking the AG’s office as run by the ever-incompetent Gary King to investigate anything and come up with an honest unbiased opinion, and in a timely basis, is a waste of time. If it does not benefit King politically, he will not do it. The legislature needs to get their own audit agency.

  • Sally

    They should be spitting mad!!

  • Bill Hilbert

    What goes around comes around