{"id":379557,"date":"2017-07-01T13:02:57","date_gmt":"2017-07-01T19:02:57","guid":{"rendered":"http:\/\/nmpolitics.net\/index\/?p=379557"},"modified":"2017-07-03T15:31:53","modified_gmt":"2017-07-03T21:31:53","slug":"states-credible-allegations-of-fraud-charge-against-health-providers-falls-apart","status":"publish","type":"post","link":"https:\/\/nmpolitics.net\/index\/2017\/07\/states-credible-allegations-of-fraud-charge-against-health-providers-falls-apart\/","title":{"rendered":"State&#8217;s &#8216;credible allegations of fraud&#8217; charge against health providers falls apart"},"content":{"rendered":"<div id=\"attachment_125373\"  class=\"wp-caption module image alignnone\" style=\"max-width: 771px;\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-125373\" src=\"http:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2016\/02\/SW-Counseling-WEB-VERSION-771x487.jpg\" alt=\"Southwest Counseling Center\" width=\"771\" height=\"487\" srcset=\"https:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2016\/02\/SW-Counseling-WEB-VERSION-771x487.jpg 771w, https:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2016\/02\/SW-Counseling-WEB-VERSION-336x212.jpg 336w, https:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2016\/02\/SW-Counseling-WEB-VERSION-768x485.jpg 768w, https:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2016\/02\/SW-Counseling-WEB-VERSION-1170x739.jpg 1170w, https:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2016\/02\/SW-Counseling-WEB-VERSION.jpg 1500w\" sizes=\"auto, (max-width: 771px) 100vw, 771px\" \/><p class=\"wp-media-credit\">Heath Haussamen \/ NMPolitics.net<\/p><p class=\"wp-caption-text\">This building in Las Cruces once housed Southwest Counseling Center, which provided behavioral health services until the state&#8217;s 2013 Medicaid freeze.<\/p><\/div>\n<p>There\u2019s no getting around it. Four years after Gov. Susana Martinez\u2019s administration charged 15 behavioral health organizations with potentially defrauding the state\u2019s Medicaid program, its case has experienced a slow-motion unraveling.<\/p>\n<p>No Medicaid fraud was ever found. And those eye-popping estimates that added up to $36 million the organizations had overbilled Medicaid?<\/p>\n<p>In the summer of 2017, the Human Services Department (HSD) is seeking drastically lower reimbursements for overbilling the public health insurance program for low-income residents, a review of public records and state court documents has found.<\/p>\n<aside class=\"module align-left half type-aside\">\n<h3>About this article<\/h3>\n<p>This article comes from\u00a0<a href=\"http:\/\/nmindepth.com\/2017\/06\/30\/the-slow-motion-unraveling-of-new-mexicos-medicaid-crackdown\/\" target=\"_blank\" rel=\"noopener noreferrer\">New Mexico In Depth<\/a>. Sign up for <a href=\"http:\/\/nmindepth.us6.list-manage.com\/subscribe?u=1d2ab093d81b992e50978b363&amp;id=9294743d38\" target=\"_blank\" rel=\"noopener noreferrer\">their newsletter<\/a>.<\/p>\n<\/aside>\n<p>Now exonerated by the state Attorney General\u2019s Office, many organizations are challenging even those much-lower estimates in administrative hearings or in state court.<\/p>\n<p>Consider Teambuilders Counseling Services, one of the accused behavioral health providers.<\/p>\n<p>Last fall it received a new estimate from the New Mexico Human Services Department. Previous numbers had varied from as high as $9.6 million to as low as $2 million. But the new figure deviated sharply from earlier calculations when Chester Boyett, an administrative law judge in the state agency\u2019s Fair Hearings Bureau, ruled Teambuilders <a href=\"https:\/\/www.documentcloud.org\/documents\/3879587-2016-11-02-Hearing-Decision.html\" target=\"_blank\" rel=\"noopener noreferrer\">owed only $896.35<\/a>.<\/p>\n<p>Boyett argued his agency had built its $2 million estimate of Medicaid overbilling on faulty analysis, according to his <a href=\"https:\/\/www.documentcloud.org\/documents\/3879587-2016-11-02-Hearing-Decision.html\" target=\"_blank\" rel=\"noopener noreferrer\">12-page decision<\/a>.<\/p>\n<p>Nancy Smith-Leslie, the department\u2019s director of the Medical Assistance Division, ignored Boyett\u2019s recommendation. In a <a href=\"https:\/\/www.documentcloud.org\/documents\/3879588-2017-01-06-Second-Hearing-Decision.html\" target=\"_blank\" rel=\"noopener noreferrer\">Jan. 6 letter <\/a>she said the agency\u2019s analysis was sound, even though she seemed to confirm Boyett\u2019s critique in a Nov. 2 memo in which she had noted the <a href=\"https:\/\/www.documentcloud.org\/documents\/3879587-2016-11-02-Hearing-Decision.html\" target=\"_blank\" rel=\"noopener noreferrer\">inaccuracy of the extrapolated amount<\/a>. In that memo Teambuilders and its attorney had not \u201csufficiently disputed\u201d the method of extrapolation, however, she wrote.<\/p>\n<p>In her Jan. 6 letter, Smith-Leslie sought to clear up matters. She amended her previous statement, saying the extrapolation referred to in her Nov. 2 memo indeed was correct.<\/p>\n<p>Teambuilders and its attorney, Knicole Emanuel, appealed HSD\u2019s ruling over whether Teambuilders overbilled Medicaid and by how much to state court, where\u00a0three other former behavioral health organizations are fighting HSD\u2019s extrapolated overpayments.<\/p>\n<p>Boyett\u2019s finding that Teambuilders owed hundreds rather than millions of dollars \u2014 even if it was ignored \u2014 represents a compelling data point given where things stand with other providers.<!--more--><\/p>\n<p>The state in May <a href=\"https:\/\/www.documentcloud.org\/documents\/3882513-Southwest-Counseling-Center-to-pay-484-71.html\" target=\"_blank\" rel=\"noopener noreferrer\">reduced to $484.71<\/a> what it said Southwest Counseling Center of Las Cruces owed after accusing it of overbilling Medicaid by as much as <a href=\"https:\/\/www.documentcloud.org\/documents\/3881826-Amended-SOE-Pp-1-6.html\" target=\"_blank\" rel=\"noopener noreferrer\">$2.8 million as recently as January.<\/a><\/p>\n<p>And last September HSD closed the books \u00a0on another organization \u2014 Las Cruces-based Families and Youth Inc. (FYI) \u2014 without demanding any reimbursements for overbilling and releasing $1.4 million in Medicaid dollars the state had suspended. The action represented a reversal after a state-ordered 2013 audit that found $856,745 in potential Medicaid overbilling by FYI.<\/p>\n<p>In fact, a review of state and court documents by New Mexico In Depth reveals a pattern regarding the state agency\u2019s overbilling estimates: In many cases, they are moving targets, usually on a downward trajectory.<\/p>\n<p>Like Southwest\u2019s, some have dropped spectacularly. Setting aside Boyett\u2019s figure of $896, even the $2 million HSD claims Teambuilders owes is far smaller than a high of $12 million.<\/p>\n<p>Hogares Inc. of Albuquerque, another organization accused of fraud, watched last year as the state revised its overbilling estimates <a href=\"https:\/\/www.documentcloud.org\/documents\/3882510-Hogarestiff-1.html\" target=\"_blank\" rel=\"noopener noreferrer\">five times over six months<\/a>, starting at $9.5 million in January and ending with $3.1 million in June, according to state court documents.<\/p>\n<p>Meanwhile, Easter Seals El Mirador, initially accused of $850,000 in potential Medicaid overbilling, now stands accused of $127,000.<\/p>\n<p>Emanuel and Bryan Davis, another attorney representing many of the formerly accused organizations, said the constantly changing estimates are due to HSD.<\/p>\n<p>The state agency is\u00a0examining a sampling of each organization\u2019s Medicaid claims and asking the organizations for documentation to prove the government program was properly billed, they said.<\/p>\n<p>\u201cIn most cases (the overbilling estimates) are dropping precipitously\u201d as organizations submit the documents requested by HSD, Davis said.<\/p>\n<p>To cite one example, HSD\u2019s latest overbilling estimate for Counseling Associates, Inc. is $96,000, said Davis, who represents the organization. That compares to $3 million in potential overbilling a 2013 state-ordered audit found.<\/p>\n<p>It is a perplexing situation, given that the Human Services Department found <a href=\"http:\/\/nmindepth.com\/2015\/01\/29\/health-audit-offers-striking-numbers-but-no-proof-of-fraud\/\" target=\"_blank\" rel=\"noopener noreferrer\">\u201c\u2018credible allegations of fraud\u201d<\/a> against the 15 organizations using that<a href=\"https:\/\/www.documentcloud.org\/documents\/1511352-2013pcgaudit.html\" target=\"_blank\" rel=\"noopener noreferrer\"> 2013 audit<\/a>, which was performed by Massachusetts-based Public Consulting Group Inc.<\/p>\n<p>\u201cThey threw PCG\u2019s audit in the trash,\u201d Davis said of HSD, noting the cost. HSD agreed to <a href=\"https:\/\/www.documentcloud.org\/documents\/727649-pcg-contract.html\" target=\"_blank\" rel=\"noopener noreferrer\">pay PCG up to $3 million<\/a>\u00a0for the study in February 2013.<\/p>\n<p>The current situation caused Davis to wonder \u201cwhy PCG didn\u2019t have these documents in the first place,\u201d he said.<\/p>\n<p>Emanuel offered a pointed answer.<\/p>\n<p>\u201cHSD did not allow PCG to gather all the documents,\u201d she said.<\/p>\n<p>A spokesperson for HSD did not respond multiple requests for comment for this story.<\/p>\n<h3>Repercussions of the Medicaid crackdown<\/h3>\n<p>The fight over Medicaid overbilling isn\u2019t the only legacy left from the Medicaid crackdown, which happened the last week of June 2013.<\/p>\n<p>The Martinez administration\u2019s decision affected lives &#8212; many lives if you listen to behavioral health advocates and officials in the 15 organizations.<\/p>\n<p>Charging the organizations with fraud and then suspending Medicaid payments to many of them disrupted mental health and addiction services for tens of thousands of New Mexicans. It created chaos for employees. And four years on it has left a number of business failures in its wake, with many of the accused organizations unable to survive long-term without Medicaid dollars.<\/p>\n<p>Teambuilders, which once operated 52 locations in 17 New Mexico counties, is no longer in business, according to Emanuel. Neither is Southwest Counseling Center. Or Hogares.<\/p>\n<p>At the same time a gap in care has opened up after <a href=\"http:\/\/www.santafenewmexican.com\/news\/health_and_science\/state-health-care-company-strike-deal\/article_2bc5cd69-cc88-5d16-9004-1c5f18cfd760.html\" target=\"_blank\" rel=\"noopener noreferrer\">three of five Arizona companies<\/a> the Martinez administration brought in to care for the vulnerable populations have departed the state, leaving New Mexico to pick up the pieces.<\/p>\n<p>\u201cIt\u2019s a mess. It\u2019s disgusting,\u201d said James Kerlin, executive director of The Counseling Center of Alamogordo, which no longer sees clients. Like Teambuilders, Hogares, Southwest Counseling and others, it was unable to stay in business without the flow of Medicaid dollars the state suspended. \u201cI want the public to know where we\u2019re at and what\u2019s been done to us. I\u2019m going to start making a lot of noise. This is ridiculous.\u201d<\/p>\n<p>Kerlin\u2019s organization was the first of the 15 organizations exonerated by then-Attorney General Gary King in early 2014. And it offered<a href=\"http:\/\/nmindepth.com\/2014\/02\/25\/health-audit-appears-to-have-mistakenly-flagged-claims-ag-says\/\" target=\"_blank\" rel=\"noopener noreferrer\"> the earliest glimpse of the weaknesses<\/a> in the Martinez administration\u2019s case against the behavioral health providers.<\/p>\n<h3>First signs of weakness in the state\u2019s case<\/h3>\n<p>HSD hired PCG to audit all 15 organizations and it found $655,000 in potential Medicaid overbilling by The Counseling Center.<\/p>\n<p>PCG reached that conclusion after finding $1,873 in questionable Medicaid claims and then extrapolating from those claims that the center could have overbilled Medicaid by more than $600,000 based on the size of its Medicaid business over several years.<\/p>\n<p>But during its fraud investigation of The Counseling Center, the AG\u2019s office flagged fewer claims than PCG and found a much lower cost of potential overbillings. It resolved some of the issues by reviewing records and interviewing staff.<\/p>\n<p>In many cases, auditors give staff of audited organizations an opportunity to refute findings or address misunderstandings before finalizing their findings. For example, most state and local governmental agencies are audited annually in New Mexico. Staff within those agencies are afforded the chance to see and respond to audit findings within a certain amount of time before audits are made public.<\/p>\n<p>Kerlin did not get that opportunity during the PCG audit.<\/p>\n<p>PCG later <a href=\"http:\/\/nmindepth.com\/2014\/10\/29\/on-health-audit-firm-didnt-follow-normal-practice-in-nm\/\" target=\"_blank\" rel=\"noopener noreferrer\">confirmed to NMID<\/a> that it is the firm\u2019s standard procedure to give companies a chance to respond before issuing official audit findings. A PCG spokesperson would not tell NMID why that didn\u2019t happen in New Mexico.<\/p>\n<p>By the time HSD held a hearing for The Counseling Center, the state agency had lowered its Medicaid overbillings estimate to $379,135. And Kerlin finally was able to hear the accusations against his organization.<\/p>\n<p>The Counseling Center submitted evidence to rebut the state agency\u2019s claims, but the hearing officer sided with HSD. The Counseling Center appealed to state court.<\/p>\n<p>In late 2015, State District Court Judge Francis Mathew ruled in favor of Kerlin\u2019s organization, calling HSD\u2019s hearing decision \u201carbitrary, capricious or otherwise not in accordance with law.\u201d<\/p>\n<p>In addition, the judge found the administrative law judge <a href=\"https:\/\/www.documentcloud.org\/documents\/3881469-TheCounselingCenter2.html\" target=\"_blank\" rel=\"noopener noreferrer\">had shifted the burden of proof<\/a> from HSD to The Counseling Center and then set too high a standard for the organization. Citing portions of the administrative law judge\u2019s ruling, Mathew noted The Counseling Center had \u201coffered certain amount of credible evidence in opposition\u201d to HSD\u2019s findings but not as much as the hearing officer required: a \u201c100 percent audit\u201d of records, which the state district judge found \u201cunreasonable.\u201d<\/p>\n<p>HSD appealed the judge\u2019s decision to the state Court of Appeals.<\/p>\n<h3>Examples of rejected claims<\/h3>\n<p>The overly stringent standards for documentation \u2014 and even a basic lack of understanding by HSD staff of Medicaid billing requirements \u2014 can be found in cases involving other organizations that are contesting the department\u2019s charges of overbilling, a review of court documents found.<\/p>\n<p>In a <a href=\"https:\/\/www.documentcloud.org\/documents\/3881514-EasterSeals1.html\" target=\"_blank\" rel=\"noopener noreferrer\">motion appealing <\/a>the administrative law judge\u2019s ruling that it owed the state $127,240, Easter Seals disputed seven claims &#8212; including one HSD had rejected because there was no medication consent form in place, even though the patient and parent had signed a general informed consent form and the patient\u2019s parent was present when the medication was prescribed.<\/p>\n<p>According to the court document, \u201cThere was no dispute that the service was medically necessary and was provided to J.A. There is no question as to quality of care provided to the recipient of services.\u201d<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-379565\" src=\"http:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2017\/06\/EasterSeals1.jpg\" alt=\"\" width=\"771\" height=\"255\" srcset=\"https:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2017\/06\/EasterSeals1.jpg 725w, https:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2017\/06\/EasterSeals1-336x111.jpg 336w\" sizes=\"auto, (max-width: 771px) 100vw, 771px\" \/><\/p>\n<p>Another claim was rejected because there was no doctor\u2019s signature on a psychosocial assessment; however, the state could provide no legal requirement for the signature, according to Easter Seals\u2019 appeal. \u201cA signature might be best practice, or advisable, but it is not a requirement,\u201d the filing argued.<\/p>\n<p>Also in the appeal, Easter Seals noted that the Human Service Department\u2019s coding witness not only could not cite rules disallowing two services to be delivered during the same time period, but also appeared to be using a coding manual from Medicare, the insurance for seniors, and not Medicaid. And furthermore, she did not even realize there was a manual for Medicaid.<img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-379566\" src=\"http:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2017\/06\/EasterSeals2.jpg\" alt=\"\" width=\"771\" height=\"413\" srcset=\"https:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2017\/06\/EasterSeals2.jpg 725w, https:\/\/nmpolitics.net\/index\/wp-content\/uploads\/2017\/06\/EasterSeals2-336x180.jpg 336w\" sizes=\"auto, (max-width: 771px) 100vw, 771px\" \/><\/p>\n<h3>HSD ignored evidence in 2013 that refuted overbilling claims<\/h3>\n<p>Even those organizations that have avoided administrative hearings and court battles have stories to tell about HSD and its actions.<\/p>\n<p>Consider Presbyterian Medical Services, which signed an agreement with the Human Services Department in 2013 <a href=\"https:\/\/www.documentcloud.org\/documents\/816340-pms-executed-settlement-agreement-10-30-13.html\" target=\"_blank\" rel=\"noopener noreferrer\">to pay $4 million<\/a> after PCG <a href=\"https:\/\/www.documentcloud.org\/documents\/1513028-presbyterian-medical-services.html\" target=\"_blank\" rel=\"noopener noreferrer\">found nearly $4.5 million<\/a> in potential Medicaid overbillings.<\/p>\n<p>It wasn\u2019t an easy decision, its CEO said this week, and it shouldn\u2019t be construed as agreement with the state\u2019s conclusions.<\/p>\n<p>\u201cWe agree to disagree\u201d is how Steven Hansen put it.<\/p>\n<p>Until Presbyterian began negotiating an agreement, in fact, it had not seen the findings of the PCG audit.<\/p>\n<p>During the negotiations PMS officials found documents they thought could refute PCG\u2019s audit findings, Hansen and other PMS officials told state lawmakers in October 2014.<\/p>\n<p>Presbyterian tried to give the files to PCG and the Human Services Department as proof that they had properly billed Medicaid for payment. The consulting firm said it would review the documentation if directed to by HSD, but PCG later told Presbyterian Medical Services the state agency <a href=\"http:\/\/nmindepth.com\/2014\/10\/10\/state-refused-evidence-that-refuted-audit-heath-provider-says\/\" target=\"_blank\" rel=\"noopener noreferrer\">\u201cdid not want to accept those records.\u201d<\/a><\/p>\n<p>\u201cWe believe there is a strong argument that nothing was owed back to HSD,\u201d Presbyterian\u2019s general counsel told lawmakers in 2014.<\/p>\n<p>At that point, Presbyterian had to make a choice: Settle with the state or fight and possibly run out of money.<\/p>\n<p>Presbyterian settled, paying the $4 million.<\/p>\n<p>The decision has worked out for the organization.<\/p>\n<p>\u201cWe\u2019re doing more business than we did before\u201d the 2013 crackdown, Hansen said.<\/p>\n<p>That\u2019s because as the Arizona providers the Martinez administration brought in have left New Mexico, Presbyterian Medical Services has taken over mental health and addiction services.<\/p>\n<p>Presbyterian has added Carlsbad, Alamogordo, Deming, Espa\u00f1ola, Grants, Artesia, Santa Fe and Rio Rancho to the places where it provides behavioral health services, Hansen said, adding that&#8217;s \u201cbits and pieces\u201d of areas formerly serviced by three of the five Arizona companies.<\/p>\n<p>\u201cWe feel like it\u2019s going in a good direction for us,\u201d Hansen said. \u201cThat\u2019s hard for us to say because there were so many great organizations that are no longer in the state. But we\u2019ve had to move on.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>No Medicaid fraud was ever found. And those eye-popping estimates that added up to $36 million the organizations had overbilled Medicaid? The state is seeking drastically lower reimbursements today.<\/p>\n","protected":false},"author":1,"featured_media":125373,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[142,117,3281,107],"class_list":["post-379557","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-crime","tag-health-care","tag-medicaid-freeze","tag-roundhouse"],"_links":{"self":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/379557","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/comments?post=379557"}],"version-history":[{"count":0,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/379557\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/media\/125373"}],"wp:attachment":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/media?parent=379557"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/categories?post=379557"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/tags?post=379557"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}