New Mexico AG releases redacted audit of behavioral health providers, calls for changes


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ALBUQUERQUE, New Mexico — State Attorney General Hector Balderas on Thursday took aim at how the state has investigated allegations of fraud and abuse involving nonprofits that provided behavioral health services to needy New Mexicans, saying improvements have to be made to ensure services that citizens depend on are not disrupted.

His comments came during a news conference in which he outlined changes his office plans to make. He also released a redacted version of the 2013 audit that prompted the shake-up of nonprofit providers.

The 355-page document has been at the center of a public records dispute. The previous attorney general, Gary King, refused to release it and the New Mexico Foundation for Open Government sued. King defended the secrecy, saying the audit was part of the ongoing investigation into the 15 providers.

Balderas, who began his first term at the start of the year, said his office reviewed the audit to find a balance between public disclosure and the integrity of the investigation. The information that's redacted — the names of staff members and patients and dates of service — is meant to protect the criminal review, he said.

"There needs to be more transparency when targeting waste fraud and abuse," Balderas told reporters. "I think that our decision and our directives moving forward as a result of this review are important steps in the right direction."

The audit alleged $36 million in state Medicaid funding was mishandled by the 15 nonprofit providers. That prompted Republican Gov. Susana Martinez's administration to freeze Medicaid payments to the providers while the attorney general's office launched an investigation.

The Human Services Department eventually replaced the nonprofits with companies from Arizona despite protests that the due-process rights of the nonprofit providers were violated when the state froze payments without hearings.

Investigations into three of the providers are complete, and no fraud was found in at least two of the cases. Balderas said he plans to release the findings of the third in the coming weeks.

Four other providers are still being investigated, and reviews of the remaining eight have yet to begin. Any criminal activity that is uncovered will be presented to a grand jury, Balderas said.

King's office initially projected that the investigations would take as long as five years. Balderas called that unacceptable.

The attorney general's office is asking the state Legislature for an additional $1 million to speed up the process. Any money that's not used would then be returned to a consumer protection fund.

Balderas said New Mexico is behind when it comes to detecting Medicaid fraud. His office has more than 380 referrals and active Medicaid fraud cases, something that added to the delay in investigating the 15 nonprofits.

"This is an important time period for New Mexico in making sure that we keep our eye on the ball and go after bad actors," he said.


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