NM Behavioral Health Audit Update

Earlier today, the New Mexico Human Services Department (NMHSD) stated that is has reached an agreement with two mental health agencies which the state alleges as having billed Medicaid fraudulently. The Medicaid mental health providers will pay the state $4.2 million that will go toward behavioral health funding.

Presbyterian Medical Services (not to be confused with Presbyterian Healthcare Services, Inc.) will repay $4 million to the state while Youth Development Inc. will repay the state $240,000.


Based on a state audit in June of this year, New Mexico’s Behavioral Health System was dealt a vicious blow. With the audit allegedly finding widespread fraud, the state froze all Medicaid payments to 15 New Mexico mental health agencies, leaving them in the hands of a few Arizona companies. As a result, 30,000 patients – many of whom struggle with severe mental illnesses – had their services disrupted, in a state that boasts some of the highest national rates for substance-related use, death, and suicide.

OptumHealth, the company managing state Medicaid funding to mental health providers, alerted New Mexico’s Human Services Department (HSD) to “aberrant billing practices” for 15 mental health agencies, which ultimately led to the audit.

Neither the agencies in question nor the general public has been granted access to the audit’s findings. The actions taken by the state and the subsequent chaos of thousands of people abruptly left without mental health services has been a hotly controversial topic for months.

Recently, with a partial release of the audit, more questions have been raised than answered.

According to the audit, carried out by the out-of-state firm Public Consulting Group (PCG), the audit “did not uncover what it would consider to be credible allegations of fraud, nor any significant concerns to consumer safety.” The audit highlights the system’s immediate need for “technical assistance,” particularly with upcoming transition to Centennial Care in January of 2014.

Of the 400-page document, only 58 were released, most of which were heavily redacted. The partial release was in response to a lawsuit filed by the New Mexico Foundation for Open Government to make the entire audit public, supported by New Mexico In-Depth, a news organization, and the Las Cruces Sun-News.

Both Presbyterian Medical Services and Youth Development, Inc. have had their payment suspensions reinstated. According to NM Human Services Department spokesman, Matt Kennicott, three agencies have had their payment holds lifted and one partially lifted.

New Mexico General Attorney Gary King stated that his office will continue investigation efforts into NMHSD’s claim prior to proceeding with any criminal charges, adding that there is no solid timeline for an official determination.

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