A Messy Situation: Audits of Behavioral Health Agencies in New Mexico

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September 8, 2013; Albuquerque Journal


A shakeup of New Mexico-based behavioral- and mental-healthcare nonprofits after audits found “credible evidence” of Medicaid fraud includes one case in which nonprofit money was used to make a $200,000 loan for a private airplane. Roque Garcia is the proud plane owner, and he was only the acting CEO of Southwest Counseling Services of Las Cruces, though the head of Rio Grande Behavioral Health Services, when a board member at Southwest suggested that he take out the loan. Garcia is claiming that his extensive travel on behalf of the agency made the move a rational and economical choice.

The plane is a single-engine, four-seat Cirrus, and the records at the Federal Aviation Administration show trips outside New Mexico to the East Coast and to Mexico. Garcia says that the money loaned came from a CD with a low interest rate, that he was paying them back at a higher rate, and, further, that “not one dollar of Medicaid money was used to buy the aircraft.” Indeed, the loan had been paid down to $115,000 in 2011.

Making the picture yet more convoluted, Garcia was actually an employee of the Providence Service Corp. of Arizona. That organization, a for-profit company with $1 billion in annual revenues, was covering the costs of his travel, which were $12,505 in 2010, along with his annual salary of $122,000. But the airplane allowance shows up in the books of Southwest Counseling Services and/or Rio Grande Behavioral Health Services. Garcia says that this is a measure to comply with accounting standards.

The state Human Services Department suspended Medicaid payments to Southwest Counseling after an audit found evidence of Medicaid fraud. (Garcia was let go at that time.) But what does a bad poster child mean for the whole system of providers? Questions have arisen about the audits themselves. Apparently, none of the 15 agencies who had bad audits—and who provide treatment to a full 80 percent of the mental health patients in New Mexico—have been able to review the audit results, and the Public Consulting Group (PCG), the audit firm used, is itself is being called to account.

“I have found that most if not all of the PCG audits that I have defended were incorrect at the initial stage,” says Knicole Emanuel, a North Carolina lawyer who has lately been defending healthcare providers subjected to PCG audits. “In some of the PCG audits that I have encountered, PCG has said that the Medicaid provider owes $700,000, $800,000, $1.5 million, these exorbitant amounts, and at the end of the day, when they look at all the documents, it goes down to like $200 or $300.”

According to a report by KUNM, PCG was funded to do the $3.2-million audit through an emergency, no-bid contract with the state and has also contracted for almost $4 million to manage the New Mexico Health Insurance Exchange.

Meanwhile, as many know, providers from Arizona have been asked to step in and take over the management of the New Mexico agencies. NPQ fully expects that the heat will be on as the ACA implementation nears.—Ruth McCambridge

  • Mickey Dowling

    Whoever has the contract to manage the New Mexico Health Insurance Exchange will have to deal with a very unsavory sweetheart deal. Senate Pro Tem Mary Kay Papen who claims to be a family member of a person receiving Behavioral Health Services did this State a discredit. As the audit was unfolding and Senator Papen was pushing hard for a Lobbyist who also claims to have a sister with a Psychiatric diagnosis to pass HB 588 This Bill portrayed persons with any issue that appeared out of context with societies norms could have anyone else call Teams created by NAMI NEW MEXICO. No real explanation or plan. It passed. Senator Cisco McSorely voted against it. Fine lawyer that he is. The Governor Vetoed it in the last day I believe..
    Easter Seals El Mirador CEO Patsy Romero was the Lobbyist.
    She also is the State President of NAMI New Mexico.
    The Chairman of Santa Fe Recovery Center
    Was recently appointed to the New Mexico Health Insurance Board and despite her non profit being under investigation is holding her seat thanks to her appointment by Senator Papen.
    Ms. Romero previously was a high level executive for Value Options of New Mexico and oversaw Medicaid Billing for someof the same Agencies that are currently being investigated. It was right there in front of her face years ago but obviously losing her job with Value Options was a godsend. She learned a lot of tricks and still has her footprint on everything. NAMI NEW MEXICO has a Board of Directors that are sitting on their thumbs.
    Mental Health Advocacy Groups will pay the price when Federal Funders lump us all together and shy away because of conflicted missions and impropriety.
    Senator Papen and Ms.Patsy Romero feel free to tell your stealth family members that they have a voice and can speak for themselves. They can call The Mental Health Association of New Mexico at 18664257030. Nothing else has appeared to have worked. Confidential and No Charge..
    How smart our State was to start the cleanup process. Fresh Money, Fresh Start.

  • Save Behavioral Health NM

    Your article titled “Ariz. Firm called shots for N.M. Nonprofits” contains serious factual errors needing correction. I will attempt to address only the most egregious.

    First, at no point did Providence control or “call the shots” for Rio Grande Behavioral Health or the member organizations. Each Board of Directors, before and after contracting with Providence, continued to be responsible for all aspects of those organizations. Prior to Providence, the nonprofits employed their CEO’s for many years and the relationship of the CEO’s to their boards did not ever significantly change. In addition, this relationship has been well known to the contracted HMO’s, HSD, BHSD, and the Governor from the beginning.

    Second, there was never any request by anyone from the state for these organizations to explain the reasoning behind these strategic relationships and how they work for the benefit of the organization, its consumers and those paying for services. Any knowledgeable person in the field of healthcare would tell you that these relationships are quite common and this type of outsourcing is actually economically efficient. Would it have been too difficult to ask the CEO’s to explain these relationships, how they work and their benefits?

    If anyone from the State had made inquiry, they would have learned that one reason that Rio Grande Behavioral Health Services was formed was in response to an RFP by the Department Of Health in 2000. DOH requested that providers form provider sponsored networks. It was and still is a best practice for saving money and coordinating care.

    Interestingly, the relationship chart one would have to draw for La Frontera might be many times more complicated than the Rio Grande chart when the relationships with 18 La Frontera organizations and their inter-relationships are illustrated. Not that there is anything wrong with the relationships, but apparently the many-layered and related La Frontera entities have either escaped the notice of our Governor and DHS or La Frontera has been given the opportunity to explain their relationship –an opportunity the NM agencies were never afforded.

    Finally, the behavioral health system has been disrupted, fragmented and politicized unlike any time in our history. Regardless of the findings, this whole mess could have been investigated, adjudicated and any necessary recoupment or sanctions imposed without the massive disruptions in service with a rational non-political approach. Instead, we now have paid political ads trying to turn this travesty in to a campaign issue for the Governor’s next race.

  • Kenneth Davis

    I’m Certain if the 15 providers involved had been given an opportunity to defend themselves the results would have been the same as in similar audits. Unfortunately they were never given an opportunity to defend themselves. they were never even informed of what the problems or accusations are. Even after being driven into bankruptcy and their organizations seized they have not been informed of any charges against them nor have they been informed of what those non existent charges pertain to.
    If this were viewed in a different context it would be a situation of a private citizen being fired and having all of their assets seized because they supposedly committed a crime but are not informed of what that crime is or allowed to defend themselves. It is a very frightening concept that this sort of action was allowed to occur in a nation bound by constitutional law. It is also frightening that a governor and their cabinet has been allowed to ignore both the legislative and the judicial branches of the state government when they were attempting to require due process of law in this action.
    My question to everyone who reads this is: Should a state be allowed to ignore due process of law, ignore the constitutional rights of the individuals within it’s borders and arbitrarily bankrupt and seize private organizations on unsubstantiated, ambiguous accusations that have not been proven in a court of law in order to gift them to other organizations? Those are the real issues involved in this action on the part of Governor Martinez and the Human Services Department of New Mexico. Are we a free country or have we fallen so far that we are at the mercy of any arbitrary act on the part of single officials in our government?