As news of the exoneration of all 15 health organizations accused of Medicaid fraud by Gov. Susana Martinez’s administration sinks in, I’m struggling to understand it all.
How does this happen — 15 organizations accused of fraud and never shown the damning evidence against them until years later, when it is too late for many. With no money coming in due to the state’s decision to suspend Medicaid dollars, several had to shut their doors. Then, they discover they weren’t guilty, after all.
It reads like something ripped out of Kafka’s nightmares. But it isn’t the creation of a dark literary genius. It happened in New Mexico. Just look around.
The system by which the state provides services to those struggling with mental illness and fighting addiction, among others, is in disarray.
Thousands of New Mexicans’ lives have been disrupted. Several of the accused organizations no longer exist. And three of the five Arizona companies the Martinez administration brought in to help pick up the slack have left or are leaving the state. Meanwhile, the number of lawsuits against the state of New Mexico and others is growing.
As we try to process it all, it is important to remember a few things: The state of New Mexico repeatedly has said it had no choice but to suspend payment of Medicaid dollars to organizations accused of “credible allegations of fraud.” But that is not true, according to federal regulations (read 5928 of Feb. 2, 2011 Federal Register).
The state could have pursued the criminal cases but kept Medicaid dollars flowing using the good-cause exemption procedure, as NMID reported in 2013.
But the state chose not to.
Instead, the Martinez administration suspended Medicaid payments based, in part, on an incomplete audit of the 15 organizations by Massachusetts-based Public Consulting Group Inc., (PCG). A spokesperson told NMID in late 2014 that PCG didn’t follow its normal procedures when examining the 15 providers.
Normally, PCG gives companies it’s scrutinizing a chance to respond before issuing official findings. But that didn’t happen here. It’s still unclear as to why it didn’t.
What is clear is that the state Human Services Department chose to use the audit’s incomplete findings to level “credible allegations of fraud” against each of the 15 providers, which triggered criminal investigations by the Office of the Attorney General.
Those investigations wrapped up Tuesday when New Mexico Attorney General Hector Balderas announced he had cleared the last two of the providers of fraud allegations. Thirteen providers were previously exonerated.
The press release from Balderas’ office Tuesday is telling, especially this paragraph:
In its separate investigation, based on the allegations of the PCG and OptumHealth audits, the Office of the Attorney General found there was approximately $1.16 million in overbilling and no evidence of fraud.
The $1.16 million is important.
That’s considerably less than the $36 million in potential overbilling the Martinez administration announced it had discovered in June 2013.
An analysis last year of PCG’s 400-page audit showed that nearly $34 million of the $36 million in potential overbilling and possible Medicaid fraud started with $42,500 in questionable claims PCG had flagged among all 15 organizations over a 3.5-year period.
Using a statistical formula, PCG extrapolated from that $42,500 that there might be close to $34 million in questionable claims given how much the 15 organizations had charged Medicaid over that 3.5–year period.
But remember, PCG never followed up with each of the 15 organizations to double check its preliminary findings, a common practice for auditors. That means the audit’s findings were preliminary and not necessarily accurate. Furthermore, that eye-popping figure rolled out by the governor’s Human Services Department was an extrapolation, not a number drawn from detailed auditing procedures.
Given all the problems with the state’s Medicaid fraud allegations, today’s news left me wondering what the governor thought of all this. It was her Human Services Department that had found the “credible allegations of fraud,” after all.
I e-mailed several questions to her spokesperson.
Here they are:
- Does the governor have any thoughts or reflections on those affected by the disruptions to services caused by her administration’s actions in 2013?
- Does the governor have any thoughts or reflections on what her administration could have done differently?
- Does the governor think the decision to cut off Medicaid dollars to organizations accused of ‘credible allegations of fraud’ was the right decision?
- Does she have any thoughts or reflections on HSD’s decision to rely on a faulty audit to make the ‘credible allegations of fraud’?
- Does she have any thoughts or reflections on her administration’s calling in out-of-state providers to take over services for the accused organizations.
As of this writing, the governor’s office has not responded to any of my questions.