Friday’s news that another provider of behavioral health services is closing up shop New Mexico caused further chaos in a system Gov. Susana Martinez’s administration destabilized in 2013 by freezing Medicaid funding to 15 health organizations.
It also left open an important question with no easy answer: What now?
Heath Haussamen / NMPolitics.net
This building in Las Cruces — and Medicaid-funded behavioral health services for youth in the city — were taken over from Families and Youth, Inc. (FYI) by Tucson-based La Frontera in 2013. Today La Frontera has left New Mexico, FYI has been cleared of wrongdoing, and taken over the building again — but the Medicaid services FYI once provided are now being provided by another local agency, La Clinica de Familia, which has continued to struggle.
Agave Health Inc. is one of five providers Martinez’s Human Services Department (HSD) brought in from Arizona to try to stabilize New Mexico’s behavioral health system three years ago. As of Friday, it’s the third of those five companies to abandon its work here.
“Agave is faced with an insurmountable obstacle, and after many months of undue financial hardship and the foreseen rate reductions in Medicaid rates, the board of directors has regretfully decided to close Agave Health,” Agave officials said in a statement quoted by The Santa Fe New Mexican.
Martinez’s administration chose in 2013 to freeze Medicaid funding to the 15 New Mexico organizations — which had been providing services like drug treatment and suicide counseling to an estimated 30,000 people — because of concerns about possible fraud. 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 the Arizona companies.
The departure of the majority of those Arizona companies has created new problems. La Clinica de Familia, which took over services in Doña Ana County last year from Tucson-based La Frontera, has continued to struggle.
Agave’s departure creates another transition for the 3,000 clients the company was serving in Northern and Central New Mexico. Kyler Nerison, HSD spokesman, said the state’s “top priority” is “maintaining uninterrupted care for those who need it.”
“The Human Services Department is already working to ensure access to care is not interrupted during the transition,” he said. “All cases will be evaluated and assessed and the most at-risk cases will take precedence.”
The state has expressed a desire to avoid disruptions before and even promised there would be none. Disruptions have happened anyway.
The path forward for clients Agave was serving isn’t yet clear. Agave is remaining in New Mexico for another 90 days, which will aid the transition.
Many have expressed concern about fragile patients falling through the cracks during such transitions. Nerison said the state has a 24/7, bilingual hotline staffed by professional counselors to help people in crisis — (855) NM-CRISIS.
New Mexico Senate Majority Leader Michael Sanchez, D-Belen, whose constituents are directly affected by Agave’s pullout, is worried that in Valencia County “Medicaid recipients will have nowhere to turn to address their behavioral and substance abuse issues.”
“These services are not a luxury, and are not easily replaceable,” Sanchez said. “We are witnessing a slow-motion train wreck for many New Mexicans.”
State Sen. Howie Morales, D-Silver City, agreed.
“It is unconscionable what clients have had to endure for nearly three years, and (Friday) we learned that the disruptions in care will continue,” Morales said. “Agave’s pullout will also lead to further job losses for more of New Mexico’s hardworking employees.”
Underneath the disarray is a funding issue: The state currently faces an $87 million shortage in Medicaid funding, which state officials say climbs to $417 million when federal matching funds are added in.
‘An unacceptable situation’
There were problems in the state’s behavioral health 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 the attorney general has thus far cleared 13 of the 15 organizations of any criminal wrongdoing. Many believe HSD’s decision to freeze their funding — which put many out of business — was a dramatically disproportionate response that put tens of thousands of New Mexicans at risk unnecessarily.
The four Democratic members of New Mexico’s congressional delegation in Washington have introduced legislation that would prevent such funding freezes in the future without first conducting thorough investigation.
One of those sponsors, U.S. Sen. Tom Udall, D-N.M., said the state’s “reckless decision” to freeze Medicaid funds in 2013 left “many patients at risk without the services they rely on.”
“This is an unacceptable situation, and the behavioral health system — and the patients it serves — are still reeling,” Udall said. “We need to make sure vulnerable New Mexicans and health care providers have strong safeguards in place to ensure this crisis never happens again.”
Udall and the other three Democrats — Sen. Martin Heinrich and Reps. Michelle Lujan Grisham and Ben Ray Luján — have also called for a federal investigation of the funding freeze.
Not all are blaming Martinez for the mess. La Frontera, one of the Arizona providers that left New Mexico, is suing national health-care giant United Healthcare and its subsidiary, OptumHealth New Mexico. When HSD froze funding in 2013, OptumHealth was overseeing the reimbursement of hundreds of millions of Medicaid dollars to those and other health providers for the State of New Mexico. La Frontera alleges in its lawsuit that OptumHealth falsely placed blame for problems at the feet of the 15 providers whose funding was frozen to cover up its own missteps.
La Frontera’s is one of three lawsuits against OptumHealth — whose parent company United Health Group, Inc. is No. 14 on the Fortune 500.
There are other pending legal battles. Ten of the providers that have been cleared of wrongdoing are suing the Martinez Administration, alleging due-process and contractual violations. The state denies the allegations.
Meanwhile, OptumHealth is holding millions of dollars the state has withheld from many of the 15 health organizations since 2013. It’s possible some of those providers could gain access to that money — and even that they could again take over the behavioral health services they were providing before the Medicaid freeze. In the meantime, other organizations are expanding to fill the gap in services, such as La Clinica in Las Cruces.
But La Clinica has struggled too. That organization put a partial freeze on accepting new clients earlier this year.
Santa Fe-based Easter Seals El Mirador, one of the organizations that has been cleared of criminal wrongdoing, is battling with the state over who owes who money. HSD has demanded that the organization repay $287,000 in alleged Medicaid overpayments — which a hearing officer reduced to $127,000. Easter Seals is appealing even the reduced fine, and has a hearing in May, said Patsy Romero, the organization’s chief operations officer. Easter Seals continues providing health services for people with developmental disabilities but is not currently providing Medicaid-funded behavioral health services.
Such legal and financial disputes, which exist statewide, will likely have to be resolved as part of efforts to build a more stable behavioral system and move forward.
Romero said she’s not surprised that Arizona companies are leaving New Mexico. She believes those organizations were misled by HSD and were also not familiar with how to make behavioral health services work in New Mexico, where funding is structured differently than in Arizona.
It’s been clear for nearly three years that the Martinez Administration disrupted services for New Mexicans with its efforts to root out waste and possible fraud. Today it’s also clear that HSD’s efforts to stabilize the situation in the years since the Medicaid freeze have failed. The system is facing regular turnover and bogged down by legal battles.
“They did not consider the impact to the most fragile in New Mexico — and now we have chaos,” Romero said.
‘The only way’ foward
The Martinez Administration yet to publicly articulate a clear plan for how the state will move forward. Romero said repairing the state’s behavioral health system can’t happen as long as Martinez is governor.
“What needs to change is this administration,” Romero said. “They have no idea how to solve the mess they created — and the more they do, the worse it gets.”
The Martinez Administration has repeatedly defended its actions and failed to acknowledge the chaos HSD’s funding freeze created. For years officials falsely insisted that HSD had no choice but to freeze funding — though the administration hasn’t been using that inaccurate rhetoric lately.
Still, its defense continues. The statement to NMPolitics.net from Nerison, the HSD spokesman, made a point of mentioning the $4 million HSD has recovered from two agencies. And he said HSD “continues to work to recoup the Medicaid dollars that were squandered” by the agencies whose funding was frozen.
Veronica Garcia, executive director of the nonprofit New Mexico Voices for Children, said it’s “disturbing” that the federal agency that oversees Medicaid hasn’t investigated what’s happened in New Mexico.
“It’s unconscionable that reputations were damaged, businesses lost, and innocent people who needed the services have been hurt,” Garcia wrote during a Facebook discussion. “The damage goes on and on. Yet, there has been no accountability or consequences for this administration.”
Nelson Goodin, an attorney who currently works for Doña Ana County, but used to work for Martinez in the Taxation and Revenue Department and as a prosecutor when Martinez was district attorney, suggested on Facebook that the governor is getting a bad rap. He pointed to the overbilling that existed before the 2013 funding freeze and the difficulty the Arizona providers have had making ends meet in New Mexico.
“This can’t all be blamed on Governor Martinez,” Goodin said. “She inherited a broke system and, based on information received, tried to do something about it.”
He pointed back to the lawsuits alleging wrongdoing by OptumHealth.
“Look into OptumHealth,” Goodin said.
In the meantime, Romero pointed to the New Mexico businesses and nonprofits whose funding the Martinez Administration froze — those with the experience to understand the nuances in this state — as key to stabilizing and improving the state’s behavioral health system.
“I can assure you that the only way will be for those of us in New Mexico to pick up the pieces,” Romero said.