This data note reviews the Medicaid estimates included in the American Health Care Act prepared by the Congressional Budget Office (CBO) and staff at the Joint Committee on Taxation (JCT).
It seems apropos that a US Congressman was named Pete Stark who first sponsored what came to be known as the Stark law, because the Stark law mandates stark penalties for financially driven physician referrals. Get it? Cheesy, I know.
The Stark law (42 U.S.C. 1395nn) prohibits physician referrals of designated health services (DHR) for Medicare and Medicaid if the physician has a financial interest with the “referred to” agency.
For example, Dr. Goneril is an internist. As an investment, he and his partner, Dr. Regan open a local laboratory “Gloucester” and hire Mr. Lear to run Gloucester. Drs. Goneril and Regan are silent partners. Dr. Goneril orders blood work on Patient Cordelia and refers her to Gloucester.
The above example would be a direct violation of the Stark law.
The penalties are severe. If caught, Dr. Goneril would have to repay all money received for services in which he referred Cordelia to Gloucester. In addition, he could be penalized $15,000 for every time he improperly referred Cordelia, plus three times the amount of improper payment he received from the Medicare/caid program, possible termination from the Medicare/caid program, and penalties of up to $100,000 for every time he tried to circumvent the Stark law.
On the federal level, the Department of Justice, the Center for Medicare and Medicaid Services (CMS), and the Department of Health and Human Services (DHHS) are tasked with enforcing the Stark law.
Recent years have seen the most Stark law violations since its inception and it is only being enforced more and more.
On June 9, 2015, the Office of Inspector General (OIG) issued a fraud alert regarding the Stark law. Investigations since June 2015 has risen significantly.
Here are some recent Stark settlements (for you to understand the severity):
- Adventist Health System agreed to pay $118.7 million to the federal government and to multiple states.
- Columbus Regional Healthcare System is paying $25 million.
- Citizens Medical Center in Victoria, Texas, agreed to pay $21.75 million.
“O, reason not the need! Our basest beggars / Are in the poorest thing superfluous. / Allow not nature more than nature needs, / Man’s life’s as cheap as beast’s.” (King Lear, II, iv).
How do you defend yourself if you are accused of a Stark violation?
First and foremost, hire a qualified health care attorney. There are exceptions to the Stark law which, hopefully, you fall within. Furthermore, there are multiple legal arguments that can abate penalties. You do not always want to settle.There have been a number of agencies, that recently, decided to never settle. Oddly enough, the number of their audits decreased. Maybe the government targets easy money.
Written by Robert Shaw, Partner at Gordon & Rees.
Readers of this blog know well what financial harm can come from documentation problems, particularly resulting from Medicare and Medicaid auditors. But just as significantly, these problems can affect your participation rights in federal programs, and could even affect your license to practice. A case in point is a recent decision from the North Carolina Court of Appeals about disciplinary action taken against a dentist.
In Walker v. North Carolina Board of Dental Examiners, the Court of Appeals, in an opinion filed today, addressed findings by auditors that the dentist had not properly documented “the reasons for prescribing narcotic pain medications for a number of patients in her treatment records.” Well, you might ask, What Does The Rule Say? There is in fact a rule on the records that dentists must keep, similar to the rules in most other health care specialties. It is the Record Content Rule in 21 N.C.A.C. 16T .101.
(By the way, now is a great time to review every rule that you must follow in order to keep proper records and to figure out what the legal requirements are. Many providers did this at one time but fail to keep up to speed on the latest rule changes, which gets them into trouble. Or, they keep records based on how someone taught them. But, that’s not a legal defense!)
The Court of Appeals found that Dr. Walker did NOT violate the Record Content Rule, which does not require documentation of the medical reasons for prescribing pain medication. So, the Board of Dental Examiners got it wrong by citing Dr. Walker for a violation of 21 N.C.A.C. 16T .101. That rule only requires that the dentist document “[n]ame and strength of any medications prescribed, dispensed or administered along with the quantity and date.”
But that was not the end of the matter. The Board also cited Dr. Walker for violating N.C. Gen. Stat. 90-41(a)(12), which provides that the Board of Dental Examiners “shall have the power and authority to . . . [i]nvoke . . . disciplinary measures . . . in any instance or instances in which the Board is satisfied that [a dentist] . . . [h]as been negligent in the practice of dentistry[.]” This is very broad power.
So, what is the standard to be applied under this general “negligent in the practice of dentistry” statute? At the disciplinary hearing, two expert witnesses (other North Carolina dentists) testified that “the applicable standard of care require[s] North Carolina dentists to not only record [the] prescription [of] controlled substances, but the reason for prescribing those medications.” This is, in effect, an unwritten standard of practice that dentists, at least according to these witnesses, should follow in North Carolina. Perhaps importantly, Petitioner acknowledged that she had participated in training programs that advised that dentists should record the reasons for medications that they prescribe. But nevertheless, this rule was not in the North Carolina Administrative Code, a clinical coverage policy, or other policy statement published by the Board (at least that was cited in the opinion).
The Court of Appeals affirmed that the Board had the authority to discipline the petitioner for failing to follow these general standards of care in North Carolina, based on testimony of two practicing North Carolina dentists!
What does this mean? It means that your licensing board could cite general record-keeping practices in your field as the basis for disciplinary action against you under a catch-all negligence standard. While each board is governed by its own set of rules and statutory authority, Walker v. North Carolina Board of Dental Examiners is a powerful reminder that record-keeping is serious business, and you could be legally obligated to follow standard practices in your field in addition to the legal maze of federal and state regulations and policies governing health care records.
What is the doctrine of exhaustion of administrative remedies? And why is it important?
If you are a Medicaid or Medicare provider (which, most likely, you are if you are reading this blog), then knowing your administrative remedies is vital. Specifically, you need to know your administrative remedies if you receive an “adverse determination” by the “Department.” I have placed “adverse determination” and the “Department” in quotation marks because these are defined terms in the North Carolina statutes and federal regulations.
What are administrative remedies? If you have been damaged by a decision by a state agency then you have rights to recoup for the damages.
However, just like in the game of Chess, there are rules…procedures to follow…you cannot bring your castle out until the pawn in front of it has moved.
Similarly, you cannot jump to NC Supreme Court without beginning at the lowest court.
What is an adverse determination?
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My mom taught me a song when I was young called, “A Hole in the Bucket.” It is a maddening song about a lazy husband named Henry who begins the song telling his wife Liza that “There’s a hole in the bucket, dear Liza, dear Liza….” To which Liza sings, “Then fix it, dear Henry, dear Henry…”
The song continues with Henry singing excuses and impediments to his ability to fix the hole in the bucket and Liza explaining to Henry how to overcome these excuses. The song goes around and around until, in order to fix the bucket, Henry would have to sharpen an ax on a stone that “is too dry,” and the only way to wet the stone is with the bucket that has a hole. “There’s a hole in the bucket…” And the songs starts anew and can be sung continuously, never-ending.
My husband and daughter audibly groan when I begin such song.
And you can’t blame them! It is discouraging and frustrating when something is caught in a never-ending circle with no end and no conclusion. It is human nature to try to resolve issues; it is also ingrained in Americans’ minds that hard work yields results. When hard work yields nothing but a big, fat goose-egg, it is exacerbating.
Kind of like claims in NCTracks…
When NCTracks went live on July 1, 2013, providers immediately began to complain the claims were being erroneously denied and they were receiving no reimbursements. Folks with whom I spoke with were at their wits-ends, spending hours upon hours trying to discern why claims were being denied and what process they could undertake to fix “the hole in the bucket.”
The problem persisted so long and I was contacted by so many providers that I instigated the NCTracks class action lawsuit, which is still pending on appeal, to the best of my knowledge, at my former firm. Although it was dismissed at the Business Court level, I believe it is on appeal. See blog.
Providers complained that, when they contacted CSC’s Help Desk regarding denied claims, the customer service representatives would have little to no understanding of the claims process and instruct them to re-file the denied claims, which created a perpetual cycle of unadjudicated claims.
“It was infuriating!” One provider explained. “It was as if we were caught in the spin cycle with no hope of stopping. I wanted to yell, ‘I’m dry all ready!!'”
“I was spending 20+ a week on NCTracks billing problems,” another said.
To which, I said, “There’s a hole in the bucket, dear Liza, dear Liza.”
Over two years after the “go live” date, the Department has now (finally) informed providers that there is an informal reconsideration review process for denials from CSC.
The September 2015 Medicaid Bulletin states that:
“This article provides a detailed explanation of the N.C. Division of Medical Assistance (DMA) procedures for Informal Reconsideration Review of adverse claim actions (denials, disallowances and adjustments) made by its fiscal agent, CSC.”
The Bulletin provides a 30 day time period during which a provider can appeal a denied claim:
“Time Limit for Submission of Request
- A provider may request a reconsideration review within 30 calendar days from receipt of final notification of payment, payment denial, disallowances, payment adjustment, notice of program reimbursement and adjustments. If no request is received within the respective 30 calendar day period, DMA’s action will become final.”
(emphasis in original).
You must request reconsideration review within 30 calendar days of the final notification. BUT what exactly is “final notification?” The initial denial? The second denial after re-submitting? The third? Or, what if, your claim is pending…for months…is that a denial? When CSC tells you to re-submit, does the time frame in which to file a reconsideration review start over? Or do you have to appeal every single denial for every single claim, even if the claim is re-submitted and re-denied 10 times?
This new informal appeal process is as clear as mud.
Notice the penalty for NOT appealing within 30 days…”DMA’s action will become final.”
This means that, if you fail to appeal a denial within 30 days, then the claim is denied and you cannot request a reconsideration review. Theoretically, there is a legal argument that, once the “final decision” is rendered, even if it were rendered due to you failing to request a reconsideration review, you would have 60 days to appeal such final decision to the Office of Administrative Hearings (OAH). Although, acting as the Devil’s advocate, there is an argument that your failure to request a reconsideration review and taking the appeal straight to OAH is “failing to exhaust your administrative remedies.” See blog. Which could result in your appeal being dismissed for lack of jurisdiction. This goes to show you the importance of having your attorney involved at the earliest juncture, otherwise you could risk losing appeal rights.
Let’s think about the “time limit for submission of request” in a real-life hypothetical.
You keep receiving denials for dialysis claims for no apparent reason. You received 20 denials on September 4, 2015. You contact a CSC customer service representative on September 8, 2015, four days later, due to Labor Day weekend. The customer service representative instructs you to re-file the claims because you must include the initial date of treatment in order to have the claims processed and paid (which was not required with HP Enterprises’ system). Is this the “final notification?” It does not seem so, since you are allowed to re-submit…
You revise all 20 claims to include the first treatment date on the claim and re-submit them on September 9, 2015. Since you re-submitted prior to the September 10th cutoff, you expect payment by September 16, 2015, 12 days after the initial denial.
You receive your explanation of benefits (EOBs) and 5 claims were adjudicated and paid, while 15 were denied again.
You contact CSC customer service and the representative instructs you to re-submit the 15 claims. The rep does not know why the claims were denied, but she/he suggests that you review the claims and re-submit. After hours of investigative work, you believe that the claims were denied because the NPI number was wrong…or the incorrect address was processed…or…
You miss the September 17th cut-off because you were trying to figure out why these claims were denied. you submit them for payment for the September 29th checkwrite date (25 days after the initial denial).
At this point, if any claims are denied, you wouldn’t know until October 6th, 32 days after the initial denial.
In my scenario, when is the final adjudication?
If the answer is that the final adjudication is at the point that the provider tries all possible revisions to the claims and continues to re-submit the claims until he/she cannot come up with another way to re-submit, then there is never final adjudication. As in, the provider could continue various changes to the billing ad nauseam and re-submit…and re-submit…and re-submit…”There’s a hole in the bucket!”
If the answer is that the final adjudication is the initial denial, then, in my scenario, the provider would be required to appeal every single denial, even for the same claim and every time it is denied.
You can imagine the burden to the provider if my second scenario is correct. You may as well hire a full-time person whose only task is to appeal denied claims.
Regardless, this new “Informal Reconsideration Review” purports to create many more questions than answers.
So may rules are enacted with good intentions, but without the “real life” analysis. How will this actually affect providers?
“There’s a hole in the bucket, dear Liza, dear Liza.”
“Then fix it.”
When you, as a health care provider, undergo a regulatory Medicare or Medicaid audit, your liability insurance could be your best friend or your worst enemy. It is imperative that you understand your liability coverage prior to ever undergoing an audit.
There are two very important issues that you need to know about your liability insurance:
1. Whether your liability insurance covers your choice of attorney; and
2. Whether your liability insurance covers settlements and/or judgments.
I cannot express the importance of these two issues when it comes to regulatory audits, paybacks and recoupments. Let me explain why…
Does your liability insurance cover attorneys’ fees for your choice of provider?
I have blogged numerous times over the past years about the importance of knowing whether your liability insurance covers your attorneys’ fees. I have come to realize that whether your liability insurance covers your attorneys’ fees is less important than knowing whether your liability insurance covers your choice of attorney. Believe it or not, when it comes to litigating regulatory issues in the Medicare/Medicaid, attorneys are not fungible.
A client of mine summed it up for me today. She said, “I wouldn’t go to my dentist for a PAP smear.”
Case in point, here are some examples of misconceptions that attorneys NOT familiar with the Office of Administrative Hearings (OAH) might think:
• Myth: Getting the case continued is a breeze, especially if all the parties consent to it.
• Reality: Generally, OAH is reluctant to continue cases, except for good cause, especially when a case has pended for a certain amount of time. (This has been a more recent trend and could change in the future).
• Myth: When my case is scheduled for trial on X date, it will be a cattle call and we will only determine when the case will be actually heard, so I don’t need to prepare for trial. (This is true in superior court).
• Reality: Incorrect. Most likely, you will be heard. OAH has a number of administrative law judges (ALJs) who are assigned cases. Generally, they only schedule one case per day, although there are exceptions.
• Myth: Since we are going to trial next week, the other side must not intend to file a motion to dismiss or motion for summary judgment. I don’t need to prepare any counter arguments.
• Reality: The administrative rules allow attorneys to orally file motion the day of trial.
You can imagine how devastating attorney misconceptions can be to your case. An attorney with these misconceptions could very well appear unprepared at a trial, which could have catastrophic consequences on you and your company.
Review your liability insurance. Determine whether your liability insurance covers attorneys’ fees. Then determine whether it covers your choice of attorney.
Does your liability insurance cover settlements and/or judgments?
Recently, a client was informed that the agency allegedly owes over $400,000 to the auditing agency. We will call him Jim. Jim came to me, and I instructed him to determine whether his liability insurance covers attorneys’ fees. It turned out that his insurance did cover attorneys’ fees, but only a certain attorney. Jim had overlooked our first issue.
Despite the fact that his insurance would not cover my fees, he opted to stick with me. (Thanks, Jim).
Regardless, once settlement discussions arose between us and the auditing entity, which in this particular case was Palmetto, I asked Jim for a copy of his liability insurance. If his liability insurance covers settlements, then we have all the incentive in the world to settle and skip an expensive hearing.
I was shocked at the language of the liability insurance.
According to the contract, insurance company would pay for attorneys’ fees (just not mine). Ok, fine. But the insurance company would contribute nothing to settlements or judgments.
What does that mean?
Insurance company could provide Jim with bargain basement attorneys, the cheapest it could find, with no regard as to whether the attorney were a corporate, litigation, real estate, tax, bankruptcy, or health care lawyer BECAUSE…
The insurance company has no skin in the game. In other words, the insurance company could not care less whether the case settles, goes to trial, or disappears. Its only duty is to pay for some lawyer.
Whereas if the insurance company were liable for, say, 20% of a settlement or judgment, wouldn’t the insurance company care whether the hired lawyer were any good?
Print off your liability insurance. Read it. Does your liability insurance cover attorneys’ fees for your choice of provider?
Does your liability insurance cover settlements and/or judgments?
April 2015 has turned into a month of change for my family and me.
I am so excited to announce that as of today, I am a partner at Gordon & Rees. Robert Shaw will be joining as a senior counsel and Todd Yoho, our paralegal, will also be joining. So “Team Medicaid” is staying together!! Both Robert and Todd are integral parts of this team.
Yes, I will remain in Raleigh. Yes, I will still maintain this blog!
I did not take this decision lightly. I enjoyed every second of my time at Williams Mullen. The attorneys over at WM are top-notch and will be greatly missed.
However, Gordon & Rees (GR) provides us with a national platform, as it is the 89th largest firm in the country!!!!!
GR has 600+ lawyers in 21 different states!! This national platform will enable us to grow our practice across the country. We (GR) do not have an office in New Mexico yet…
In this type of practice, my clients are health care providers that provide health care to our most needy population. Every time that we “win” for our clients, we are allowing that client/health care provider to continue to accept Medicare/caid and to continue to serve their patients. Now we will have the opportunity to help health care providers all over the country!!! This is such an amazing opportunity, and I feel so blessed.
And it doesn’t stop there!
Concurrent with my transition to GR, my family has purchased a new house!!! We close on April 10th and the movers are coming April 11th. It is almost 5 acres with a four-stall barn and a lighted round ring for evening riding. For those who know me, my family and I have wanted a small horse farm for years. We are so excited! Although, between you and me, I may be taking away my husband’s debit card soon. He believes that prior to our move, we need to have a tractor, a golf cart, hay, fencing, a donkey, and multiple other farming paraphernalia. I disagree.
Oh, and we cannot forget the trial in New Mexico fast approaching…and another trial 2 weeks afterward. This is just how I like it! I love my family, and I love my job!
So, Happy Easter, everyone!!!
My new email is:
The appearance of my blog may change in the near future…but the content will not. I will continue to blog on the ongoing plights of those health care providers who choose to accept Medicaid/care, the Goliaths who stand in their way, the laws and regulations surrounding this esoteric, but so important topic, and the impact of public health on our tax dollars!
“Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.” Calvin Coolige.
Medicare and Medicaid Appeal Deadlines and Procedures: Laws that EVERY Health Care Provider Should Know
If you are a physician, most likely, you are not a lawyer. And vice versa. While there are exceptions, generally, the professions of physicians and attorneys are mutually exclusive. Personally, one reason I went to law school is because I am awful at math. However, presumably, I would be able to write a killer essay on early Shakespearean comedies, much unlike my primary care physician.
That said, there are things that every physician who accepts Medicare or Medicaid should know: (1) appeal deadlines; and (2) appeal procedures.
Ignoring either appeal deadlines or procedures does not make them go away.
They exist. And if you fail to appeal an adverse decision within the required timeframe, you will be barred from appeal. Knowing the appeal deadline is imperative!
Putting off hiring legal counsel can lead to missing an appeal deadline.
A client came to me a year or so ago. We will call him Artagnan, or Art, for short. Art had received a Tentative Notice of Overpayment (TNO) alleging that Art owed the Department of Health and Human Service (DHHS) $1,780,534.15. Art hired Attorney Richie. Richie properly appealed the TNO to a reconsideration review and got the amount decreased by approximately $500.
Per NC statute, you have 60 days to appeal a reconsideration review decision to the Office of Administrative Hearings (OAH). Art asked Richie to appeal the reconsideration review and paid Richie additional money for the appeal.
Art came to me for a consultation over 90 days after the reconsideration review decision, and we found that no appeal had been filed. Obviously, Art was upset.
I offered to file a motion throwing ourselves on the mercy of the court, asking for an exception due to the former attorney’s failure to appeal and Art’s reliance on Richie to appeal. I warned Art that this was a longshot and, most likely, we would lose.
And we did.
The Judge determined (accurately, in my opinion) that OAH has no jurisdiction over the matter once the 60 days has lapsed.
Moral of the story: Know the appeal deadlines. Abide by the appeal deadlines.
Appeal deadlines (in NC) (these are the general rules and exceptions exist, so go to a lawyer for advice as to your particular situation):
For a Medicaid reconsideration review – 15 days
For a Medicaid petition to OAH – 60 days
For a Medicare redetermination – 120 days
For a Medicare reconsideration – 180 days
For a Medicare ALJ Hearing – 60 days
Procedures to appeal
There are different avenues to follow for appeals depending on the adverse decision that you are appealing.
For example, for a Medicare payment dispute, there are 5 levels of appeal.
The levels are:
- First Level of Appeal: Redetermination by a Medicare carrier, fiscal intermediary (FI), or Medicare Administrative Contractor (MAC).
- Second Level of Appeal: Reconsideration by a Qualified Independent Contractor (QIC)
- Third Level of Appeal: Hearing by an Administrative Law Judge (ALJ) in the Office of Medicare Hearings and Appeals
- Fourth Level of Appeal: Review by the Medicare Appeals Council
- Fifth Level of Appeal: Judicial Review in Federal District Court
For a Medicaid payment dispute, there are only, generally, 3 levels of appeal.
The levels are:
- Reconsideration review
- Petition for Contested Case at OAH
- Judicial Review at Superior Court
It is imperative that you and your lawyer follow each step without attempting to jump a level. There is a legal requirement to “exhaust your administrative remedies” prior to going to court. For example, if a Medicaid provider filed a lawsuit in Superior Court because of a TNO without first going through the reconsideration review and OAH, the Superior Court judge will dismiss the claim for failing to exhaust your administrative remedies.
Therefore, any health care provider who accepts Medicare and/or Medicaid needs to be highly aware of appeal deadlines and appeal procedures. Allowing too much time to pass before hiring your attorney and filing an appeal can result in a loss of appeal rights.
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.
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.”