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The KUNM news team's coverage of the 2020 legislative session and its impacts

Balderas Releases Audit, Says Attack Fraud Without Harming Citizens

Marisa Demarco / KUNM

It’s his first month as attorney general and on Thursday, Jan. 29, Hector Balderas released the more than 300-page PCG audit that caused 15 behavioral health service providers to have their funding suspended. 

Since 2013, behavioral health providers in New Mexico have waited to see the details of accusations of Medicaid fraud leveled against them. 

"There are minimal redactions in the audit only intended to serve and protect the ongoing criminal investigation," he said. "And we are providing all of the necessary information that we possibly can under both state and federal law."

Investigations into three of 15 providers are complete, Balderas said. Four are ongoing, and eight have yet to begin.

Balderas also announced that he is seeking $1 million from the Consumer Protection Fund to hire more employees, because he wants to complete the investigation within the next six to eight months. Previous estimates said the probe would take five years or more. His request requires legislative approval. 

"New Mexico, moving forward, must learn how to attack waste, fraud and abuse in a way that does not harm its own citizens," Balderas said. "I don’t anticipate any pushback. I’m actually requesting support from the governor, and the Legislature and HSD."

In 2013, the state gathered all 15 providers to announce they had failed their audits and were being turned over to the Attorney General’s Office for criminal investigation. And funding would be immediately suspended.

Patsy Romero is the chief operating officer for Easter Seals El Mirador, an organization that serves people with disabilities in Northern New Mexico. "For months and months we’ve been in the dark," she said. "Being accused of fraud, being accused of being criminal and being corrupt, and not knowing why has been very very difficult."

Romero estimated that Easter Seals laid off 160 employees. "And basically our reputations were down the toilet," she said. "We went back to our records, trying to think, 'What could we have done wrong?' Just trying to find answers and you just didn’t know. You didn’t know."

The organization was cleared of fraud charges in May by Attorney General King, but the Human Services Department asked that the finding be reviewed again. Balderas reiterated this morning that Easter Seals was cleared of those charges. 

Gay Finlayson said the shakeup’s been difficult for people receiving services, too. Her son was diagnosed with schizophrenia. He had a psychiatrist, a therapist and a community support worker to help him, but "all that kind of was yanked out from under us when the takeover happened in 2013," she said. "And he went without a therapist for a good four months."

Finlayson said the release of the audit comes too late. The state lost providers, she said, and people who ran the nonprofits might not be able to bounce back. "The audit will be interesting to read," she said, "but the effects of, you know, what has happened to people, they’re ongoing and I don’t think they’ll be remedied by reading the audit."

Balderas said he hopes releasing the audit will help clear up some of the issues and controversies plaguing the system, but his goal is just to complete the investigations as quickly as possible. 

In a statement, the state’s Human Services Department said an OptumHealth New Mexico report identified rampant over-billing, and that—along with the PCG audit and whistleblower allegations—were part of the referral to the Attorney General’s Office. HSD said they’re deeply concerned with Medicaid funds being wasted or stolen. 

Marisa Demarco began a career in radio at KUNM News in late 2013 and covered public health for much of her time at the station. During the pandemic, she is also the executive producer for Your NM Government and No More Normal, shows focused on the varied impacts of COVID-19 and community response, as well as racial and social justice. She joined Source New Mexico as editor-in-chief in 2021.
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