AG clears health providers; Martinez Admin. defends Medicaid freeze

Southwest Counseling Center

Heath Haussamen /

Southwest Counseling Center, which used to be housed in this building, provided behavioral health services in Las Cruces until the Martinez Administration froze funding to it and 14 other New Mexico organizations in 2013 and initiated a criminal investigation into possible fraud. Since then, behavioral health services in Las Cruces have shifted from one organization to another. The AG’s Office on Monday cleared Southwest Counseling and nine other New Mexico organizations of criminal wrongdoing.

On Monday, the Martinez Administration continued defending its 2013 decision to freeze funding to 15 behavioral health organizations — even as the attorney general announced that his agency had cleared almost all of them of criminal wrongdoing.

“The undeniable facts are that a significant amount of public funding was misspent, and that shortchanged those in need in New Mexico,”said Kyler Nerison, spokesman for the N.M. Human Services Department. The Martinez Administration respects but disagrees with Attorney General Hector Balderas’ decision to not prosecute 13 of the 15 providers, Nerison said.

The AG’s office had already cleared three of the 15 organizations. Balderas added another 10 to the list on Monday. Two organizations are still under investigation.


“While we did find some regulatory violations, there did not appear to be a pattern of fraud for any of the ten completed investigations,” Balderas wrote in a letter informing state lawmakers that his agency had cleared the 10 of the providers of fraud.

Many welcomed the announcement that organizations including Southwest Counseling Center in Las Cruces wouldn’t face criminal charges.

“We (employees and consumers) have suffered for over two years, and we need to heal now,” said Johnice Trejo, who worked at Southwest Counseling. “We are all tired and emotionally drained. We want our providers back!”

Others expressed similar sentiments.

“I hope that, now that these mental health providers have been cleared, they can get back to the ever-more-important task at hand: Working to provide badly needed services to our mentally ill,” said Barbara Alvarez of Las Cruces.

The organizations whose funding Gov. Susana Martinez’s administration froze in 2013 had been providing services like drug treatment and suicide counseling to an estimated 30,000 New Mexicans. The Medicaid freeze sparked a chaotic transition. There were disruptions in service to patients. Many New Mexico-based companies and nonprofits went out of business and were replaced by Arizona companies.

Some of the Arizona providers later pulled out of New Mexico, sparking new transitions. La Clinica de Familia, which took over services in Doña Ana County last year, has continued to struggle.

Meanwhile, HSD says services have improved. Nerison pointed on Monday to a 2015 report that said the number of New Mexicans receiving behavioral health services from 2013 to 2014 increased by 84 percent. He said the agency is working “to ensure that those who are suffering from mental health and substance abuse issues get the help they need.”

Critics are skeptical of the numbers. Many say quality has suffered. U.S. Rep. Michelle Lujan Grisham, D-N.M., was among those who expressed frustration on Monday.

“No pattern of fraud. Yet, nobody in state government has been held accountable for the unconscionable decision to shut these providers down and turn our behavioral health system upside down,” the congresswoman wrote on Facebook.

“How many people lost access to services as a result of these decisions by the Martinez Administration? Worse, what happened to those vulnerable New Mexicans who didn’t get those services?” Grisham asked. “I have tried getting those answers for three years now, and I have received nothing but excuses from state leaders.”

A team of journalists who worked on this topic for New Mexico In Depth (which included me, until I left in 2015 to restart, had a similarly frustrating time getting answers to questions. In the months after freezing funding in 2013, HSD often refused to answer questions and ignored some public records requests from NMID. The agency kept most of the audit used to justify freezing funds secret.

And HSD spun the truth, insisting that federal regulations required it to freeze Medicaid funds while the AG investigated. NMID’s reporting demonstrated that the state could have chosen to not abruptly halt funding.

NMID and the Las Cruces Sun-News sued to try to win public disclosure of the 2013 audit report, but lost in court. The report remained secret until Balderas took office in 2015 and released it.

Rep. Monica Youngblood, R-Albuquerque, defended the Martinez Administration after Balderas cleared the 10 organizations of criminal wrongdoing on Monday.

“The idea that the administration should turn a blind eye to wasteful spending of funding that impacts our most vulnerable is ridiculous,” Youngblood said. “… referring this to the AG was absolutely the right thing to do.”

The audit did find overbilling and other problems. Two of the health organizations have agreed to repay more than $4 million. Nerison said HSD will work to recover additional misspent dollars.

During its investigations into the agencies, the AG charged one former therapist in Raton with fraud — the only person tied to the 15 organizations to face criminal charges.

In addition, a now-defunct behavioral health organization in Carlsbad has been charged with fraud. That organization’s case predated the 2013 audit of the 15 providers, though Nerison claimed the Carlsbad case prompted the larger audit.

But there’s mounting evidence that the audit, which was conducted by the independent firm Public Consulting Group on behalf of HSD, may have been flawed. Investigations by the attorney general and reporting by NMID have previously raised questions about the audit. And in his Monday letter to lawmakers, Balderas wrote that his office “came to different conclusions on many of the alleged violations” than did PCG’s audit.

The AG’s Office “ultimately did not find that the violations that we were able to substantiate reflected a deliberate or intentional pattern of fraud,” Balderas’ letter states.

Given that news, Richard Malcolm of Albuquerque suggested that the Martinez Administration should be investigated. He called the funding freeze “a brutal shakedown on trumped-up charges that essentially resulted in a hostile takeover of the behavioral health system.”

“It is no accident that the agencies targeted included many of the state’s major nonprofits and some of its strongest advocates for people with mental illnesses,” he said.

Martinez has “wrecked the behavioral health providers’ network,” Greg Lennes of Las Cruces said. “Shame on her.”

Jason Rivera of Las Cruces expressed similar sentiments.

“What a travesty this situation has been and will be,” he said. “Shut down for imaginary violations.”

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