Williams Mullen and Local Counsel, Bryan Davis, Win Declaratory Action Against HSD in New Mexico!!

For those of you who follow my blog, you know that the single state agency in New Mexico, Human Services Department (HSD), accused 15 behavioral health care providers, which made up 87% of the mental health care in NM, of credible allegations of fraud back in June 2013.  HSD immediately ceased paying all companies’ Medicaid and non-Medicaid reimbursements causing most of the companies to go out of business.

See my blogs: “New Mexico Offers No Due Process Based on a PCG Audit!, and “Documentary on New Mexico Provider: Breaking Bonds: The Shutdown of NM’s Behavioral Health Care Providers.”

Easter Seals El Mirador is one of those companies accused of fraud.

Then, a year later, May 2014, the Attorney General’s office clears Easter Seals El Mirador (ESEM) of any fraud.  ESEM is the second company cleared of fraud.  In other words, HSD accused 15 companies of fraud, and the first two reviewed by the AG were determined to have committed no fraud.  Oops.  Sorry.  We were mistaken.

But you can’t fix a broken egg.  The best you can do is clean it up.

But, no, HSD does not accept the AG’s determination that ESEM committed no fraud, and on or about June 25, 2014, HSD re-referred ESEM to the AG for credible allegations of fraud again.

Instead of me going on a rampage as to the violations committed (and alleged in our complaint), let me just explain that through the first referral and re-referral of credible allegations of fraud, HSD is withholding all ESEM’s reimbursements.

After the re-referral, in June 2014, we, on behalf of ESEM, and with the help of local counsel, Bryan Davis, filed a Complaint requesting declaratory judgment followed by a Motion for Summary Judgment.

Last Friday, January 23, 2015, the New Mexico judge agreed with us holding that HSD’s “temporary” withhold of reimbursements violates due process and that ESEM has a right to a fair hearing.

Here is an article from the Santa Fe New Mexican written by Patrick Malone:

Judge: State Human Services Department violated due process law

In a harsh rebuke of the 2013 behavioral health shake-up that thrust mental health care for indigent New Mexicans into disarray, a Santa Fe judge on Friday ruled that the state Human Services Department had denied due process to one of the providers accused of fraud.

State District Judge Francis Mathew ordered the department to hold a hearing that would allow Santa Fe-based Easter Seals El Mirador to hear the specific allegations against it for the first time — and give the provider a chance to respond to those claims. The ruling could open the door for other providers affected by the shake-up to do the same, according to the nonprofit’s lawyer.

In the 19 months since audit findings spurred Gov. Susana Martinez’s administration to cut off Medicaid funds to Easter Seals El Mirador and other providers in the state who treat Medicaid patients, the nonprofit has not been shown the audit findings that outline exactly what it is accused of doing wrong. Nor has the agency been afforded the chance to refute any of the findings. Meanwhile, the Human Services Department has withheld more than $600,000 in Medicaid funds that were owed to Easter Seals El Mirador at the time of its termination, citing federal guidelines that allow temporary withholding of funds from agencies that are suspected of Medicaid fraud.

“I don’t believe that 19 months is temporary,” Mathew said, particularly since the Human Services Department has prolonged the investigation by referring Easter Seals El Mirador’s case back to the Attorney General’s Office after the nonprofit already had been cleared once.

The judge blasted the department’s process from the outset of the shake-up.

“I think it’s a due-process violation,” he said.

In June 2013, Human Services halted Medicaid funding to 15 organizations that provided mental health and substance abuse services to low-income patients. The state pointed to audit findings that indicated the agencies had overbilled Medicaid by an estimated $36 million as grounds for the decision. The Martinez administration brought in five Arizona providers as replacements and paid them $24 million to set up shop in New Mexico.

This month, one of the replacement providers informed the state that it is financially failing and plans to pull out of New Mexico at the end of March, bringing new disruptions to a fragile population still reeling from the earlier provider changes.

“We have an obligation to protect taxpayer dollars and to help ensure that New Mexicans most in need receive vital behavioral health services,” said Matt Kennicott, a spokesman for Human Services. “We will provide a hearing on the credible allegations of fraud.”

He said the department has not yet decided whether it will appeal the judge’s ruling. Easter Seals El Mirador’s lawyer, Bryan Davis, said he expects the department to do so.

When Judge Mathew issues a written ruling in the days ahead, the Human Services Department will have 90 days to set a hearing date. Within 30 days, the department will be required to share with Easter Seals El Mirador the evidence it plans to present at the hearing. That could yield the agency’s first glimpse at the state’s basis for accusing it of fraud. The behavioral health audit that led to the shake-up has been largely shielded from public view while the Attorney General’s Office conducts a criminal investigation.

On Friday, Attorney General Hector Balderas, who just took office this month, informally asked lawmakers for an additional $1 million in hopes of speeding up the probe to complete it within the next six to eight months. Balderas inherited the investigation from his predecessor, Gary King, whose office has faced criticisms from lawmakers and the ousted providers for its slow pace. To date, three investigations have been completed, four are actively being investigated and eight have not yet begun, Balderas’ spokesman said.

Easter Seals El Mirador and the Counseling Center of Alamogordo have been cleared of fraud by the Attorney General’s Office, but Human Services referred Easter Seals El Mirador back to the attorney general for a follow-up investigation.

Mark Johnson, chief executive officer of Easter Seals El Mirador, said he is confident that the organization would be cleared of any wrongdoing in a fair hearing.

With at least one of the replacement providers from Arizona already leaving the state and the New Mexico providers financially hobbled or already out of business because of the shake-up, Johnson said, he fears the most serious consequences of the Martinez administration’s abrupt actions lie ahead.

“There is no safety net. There is no New Mexico company that can fill the systemic void for services for the poor people who need them,” Johnson said. “It’s catastrophic.”

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on January 27, 2015, in "Single State Agency", Accountability, Administrative Remedies, Appeal Rights, Behavioral health, Credible Allegations of Fraud, Due process, Fraud, Health Care Providers and Services, Lawsuit, Legal Analysis, Legal Remedies for Medicaid Providers, Media, Medicaid, Medicaid Attorney, Medicaid Fraud, Medicaid Providers, Medicaid Reimbursements, Medicaid Services, Mental Health, New Mexico, North Carolina, PCG, Public Consulting Group, Suspension of Medicaid Payments and tagged , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 2 Comments.

  1. Well well, we have 1 judge in NM that believes in Due Process! I am certain the State of NM has regulations in place so that they can’t be sued. So where does this leave the Providers?

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