Three More Defunded New Mexico Behavioral Health Nonprofits Sue over No Due Process

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June 24, 2015; Albuquerque Journal

NPQ has been covering the story of the great behavioral health purge in New Mexico since September 2013. As we have described previously, more than a dozen nonprofit health providers were put out of business in one fell swoop when the state claimed it had an audit, performed by outside consultants, proving that $36 million had been lost through fraud and overbilling. Subsequent investigations of some of those groups did not support the claim, and the new attorney general has just recently put the rest of the investigations on a fast track.

Seven of those driven out of business have already filed suit against the state, and now three more have joined them, alleging that the civil rights of providers were violated. The first seven lawsuits, first filed in state District Court, have been moved to federal court and consolidated. They are still pending, and these additional three will probably join that suit.

The audit of 15 providers commissioned from the Boston-based Public Consulting Group was said by the state to have identified more than $36 million in overbilling from 2009 to 2012 as well as widespread mismanagement and possible fraud. The audit was kept under wraps even as funding was cut to those providers, who were unable to launch a defense since they did not know the substance of the charges. Suspending payments indefinitely in that way, say the providers, is not allowed under federal regulations.

“Every provider’s civil rights were violated,” said Patsy Romero, chief operating officer of Easter Seals El Mirador, a nonprofit already cleared by the AG. The suits, she said, are meant to “make things right for the people they put out of business and whose reputations they ruined.”—Ruth McCambridge