NM settles $2.8M Medicaid overpayment claim for $485

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As Gilda Radner’s Emily Litella might have said, “Nevermind!”

More than four years after accusing Southwest Counseling Center of overbilling the state by $2.8 million in Medicaid reimbursements, the Human Services Department has settled with the former Las Cruces behavioral health provider for $484.87.

SWCC was one of 15 health organizations accused of overbilling and potential fraud by Gov. Susana Martinez’s administration in 2013.  The state suspended Medicaid payments to the organizations pending an investigation, and outsourced behavioral health contracts to five Arizona companies, which effectively crippled the network of New Mexico behavioral health providers.  All the while, the state kept an audit they used to justify the move secret, making it impossible for each organization to know what they were being accused of specifically. See a timeline and read of coverage of the Medicaid freeze here.

“We went through hundreds of boxes of files to give them the information they needed,” said Roque Garcia, CEO for the now-defunct mental health services provider. “We could have had that information to them within a week at the time of the audit. I had the resources, all the people were there who could have given them the documents they needed.”

HSD spokesman Joseph Cueto said the department sent its first determination of failed claims to SWCC in August 2016, along with a request for documentation.

Garcia said there was only one claim he couldn’t find the documentation for – the progress file for one client, so the agency reimbursed the state for it. He said because the error rate was so low, the state’s statistician wouldn’t extrapolate from that one error a higher amount of overbilling, so a fair hearing on potential overpayments to Southwest Counseling set for May was canceled and both parties settled.

“We never were doing anything wrong – certainly nothing that would require shutting down a 50-year-old organization,” he said. “They closed us down without ever giving us a chance to defend ourselves.”

The Las Cruces company has received about $700,000 in withheld Medicaid payments from the state, though most of that money has gone to pay vendors it owed and for attorney fees, Garcia said.

According to Cueto, the department has had fair hearings with all but one of the remaining providers. “These fair hearings established in excess of $5 million in overpayments by providers. This is in addition to the $4.4 million that has already been returned to the state,” he said via email.

But the other behavioral health providers are disputing those extrapolated amounts in state district court and the court of appeals, according to Patsy Romero, chief operating officer of Easter Seals El Mirador in Santa Fe.

Romero said Easter Seals was shown to have $691 in billing errors by an HSD hearing officer, but the state is seeking $127,000. “Everyone else is in the same situation.”

“It makes you sick to your stomach that you find all these minor errors and you closed down the behavioral health system,” she said. “We lost 1,600 jobs in New Mexico, lost 500 years of institutional knowledge and totally dismantled the safety net for mentally ill people and children … and for less than $1,000 in mistakes? In millions of dollars in claims?”

New Mexico In Depth has requested the extrapolated overpayment amounts and will update or post when we receive that information.

In the meanwhile, SWCC and Easter Seals, as well as a consortium of New Mexico behavioral health providers continue their lawsuits against HSD, Optum Health, the contractor formerly charged with overseeing Medicaid payments for behavioral health in New Mexico, and PCG, the consulting firm that performed the audits that led to the behavioral health shakeup.

“I’m pretty sure once the depositions begin we will find that there was a lot of wrongdoing at HSD. Maybe it started from incompetence, but then it was covered up,” Garcia said. He said those actions hurt not just the longtime agencies, but their vulnerable clients with mental health and substance abuse issues. “People were put in jail, people were put in the hospital, there were suicides. I think it was a criminal action from HSD.”

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