Kafka’s Prague revisited / Phil Richards

February 8, 2016; KRQE-TV (Albuquerque, NM)

This story is nothing if not Kafkaesque. NPQ has been following the story of the great purge of New Mexico’s behavioral health nonprofits since 2013. Fifteen agencies that provided behavioral health services to needy New Mexicans were effectively shuttered by the state when their Medicaid dollars were cut after audits by Public Consulting Group (PCG), a contracted consulting company; the state “found credible evidence of fraud” relative to them all. The audits estimated that $36 million in state Medicaid dollars had been mishandled. The agencies were not allowed to review the audit results, though questions were raised almost immediately about the credibility of the findings from the firm.

At the time, Knicole Emanuel, a North Carolina lawyer who has lately been defending healthcare providers subjected to PCG audits, said, “I have found that most if not all of the PCG audits that I have defended were incorrect at the initial stage. 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.”

Still, New Mexico transferred the Medicaid dollars to behavioral health providers from Arizona, and one after another, the New Mexico–based nonprofits faded out of existence. Meanwhile, a state audit of the original PCG audits ground on, championed in slow motion by the attorney general who followed the one who was in office when the summarily ordered execution occurred.

And now, finally, the New Mexico attorney general’s office has disposed of the majority of cases, announcing there was no pattern of fraud in 10 more of the nonprofits in question, though there were “some regulatory violations.” Balderas’ office previously found overpayments but no fraud with three other agencies, and two more remain to be reviewed.—Ruth McCambridge