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NM Democrats thwarted by Obamacare in health controversy

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE – New Mexico Democratsare spitting mad, demanding that funding get restored to 15 behavioral health providers across the state.

But in a profound political irony, the deputy chief of the New Mexico Attorney General’s Office said Thursday that changes in federal statute due to President Obama’s Affordable Care Act have vested sweeping powers into the hands of the state agency directors in charge of Medicaid.

In New Mexico, that person is Human Services Secretary Sidonie Squier, who suspended payments in the first place.

“The ACA made a significant change in how Medicaid fraud is investigated,” Al Lama of the attorney general’s office told members of the Legislative Health and Human Services Committee Thursday. “The attorney general’s office cannot advise the (Human Services Department)…because that’s not authorized by federal law…We don’t carry the same sort of discretion to make determinations…That rests with the agency director.”

Earlier this summer Squier suspended funding for 15 behavioral health providers after the Boston-based audit firm Public Consulting Group, Inc., alleged $36 million in potential fraud. HSD then turned the finding over to the attorney general.

The providers have cried foul, saying the allegations have tarred their reputations and that the funding suspensions have forced them to lay off employees, put their companies on the financial brink and jeopardized care to patients throughout the state.

At Thursday’s committee hearing, some members demanded the attorney general’s office intervene.

But Lama said the new federal statute essentially gives agency directors in respective states a great deal of authority if they deem “a credible allegation of fraud determination is made.”

“It’s not only within (Squier’s) authority, it’s also her responsibility,” Lama told New Mexico Watchdog. “The feds mandate all of this for all of us.”

Pointing to some of the details of the federal code, Sen. Jacob Candelaria, D-Albuquerque, debated whether Lama’s interpretation was correct, saying, “I take offense at being told over and over that (the wording) is crystal clear.”

Acknowledging that Squier “has full discretion, full authority to act,” Sen. Nancy Rodriguez, D-Santa Fe, said, “I implore the Secretary of HDS to reallocate those funds.”

Squier did not attend the hearing. Last month, Squier walked out of the committee’s meeting that turned divisive when she clashed with some members.

HSD spokesman Matt Kennicott said Squier received a phone call “late yesterday” to appear before Thursday’s committee meeting. “If we had received the invitation earlier we would have made a significant effort to attend,” he said. Kennicott said Squier is open to attending future LHHS meetings.

Earlier in the day, Lama reported the attorney general’s office has committed staffing that amounted to 17 employees, including four criminal investigators, to look into the allegations.

“We believe that within 2-3 months — and that’s not a firm deadline — we will be able to make initial assessments,” Lama said.

“These agencies are going to be dead in 2-3 months,” said Sen. Gerald Ortiz y Pino, D-Albuquerque. “There’s no appeal (for the 15 providers), there’s no information, there’s nothing…Until there’s some findings, let’s keep things going, watch them like a hawk. Why bring in Arizona companies?”

HSD has budgeted $17 million for several companies based in Arizona to pick up the slack while the investigation continues. Nine days ago, Republican Gov. Susana Martinez told reporters, “We’re not going to leave people without services.”

“It’s frustrating,” said Rep. Sandra Jeff, D-Crownpoint. “My area has high unemployment and high rates of mental illness. Our governor always campaigned on transparency…We’re getting auditors who aren’t even from New Mexico.”

“This is destroying mental health in the state of New Mexico,” said Senate Pro TemMary Kay Papen, D-Las Cruces. “This could be just a few IT mistakes but (companies’) reputation is impinged…Two months will kill the system.”

“We’ve got a lot of finger-pointing going on here,” said Sen. Lisa Torraco, R-Albuquerque.

Rep. Miguel Garcia, D-Albuquerque, even called for the attorney general’s office to consider taking “one of the investigators looking into these allegations and apply it to Secretary Squier” to look into “criminal intent to sabotage behavioral health services in our state.”

“That’s ludicrous,” HSD’s Kennicott said. “We’re the ones who conducted the initial investigation, passed it on to the attorney general…We identified these problems. That’s a ludicrous statement by Rep. Garcia.”

Meanwhile, in a setback for providers, U.S. District Court Judge M. Christina Armijo ruled late Thursday afternoon against granting a temporary restraining order that would have forced HSD to restore funding to eight of the 15 companies under investigation.

In a 17-page ruling, Armijo said that while the court was concerned “there could be a disruption of the delivery of critical mental health services in some instances” the eight providers “failed to fulfill their heavy burden to establish they are entitled to the extraordinary remedy” of a temporary restraining order.

Update: Page 7 of the judge’s decision cites federal statute “requires a Medicaid agency such as HSD to ‘suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud … unless the agency has good cause to not suspend payments or to suspend payment only in part.’ ”

Click here to read Judge Armijo’s decision.

Contact Rob Nikolewski at and follow him on Twitter @robnikolewski 

New Mexico Health Care Dispute Puts Obamacare In The Crosshairs


Being one of just four Republican governors to embrace a central pillar of President Barack Obama's health care reform law wasn't enough to insulate New Mexico Gov. Susana Martinez from Democratic resistance.

Martinez wants New Mexico to establish and operate a state-run health insurance exchange under Obamacare (she also backs the law's Medicaid expansion), which is mostly a Democratic priority. But the Associated Press reports Democrats, who control the legislature in the Land of Enchantment, are objecting to Martinez moving ahead on her own, despite the fact that she received conditional approval from the Obama administration earlier this month.

Under the governor's plan, an existing entity called the New Mexico Health Insurance Alliance would take charge of the health insurance exchange. But Democratic lawmakers contend new legislation is required to authorize the exchange. And they've found a supporter in Attorney General Gary King, a fellow Democrat, who says the alliance doesn't comply with the federal health care reform law, according to an Associated Press report published Monday.

The alliance's board, mostly appointed by the governor, is made up of insurance company officials, small employers and workers, but King's office said state law doesn't prohibit the insurance industry from having majority control of the board -- a prohibition required under federal law. There also are conflicts between state and federal laws over which small employers could be eligible to obtain health insurance coverage and whether insurance companies could deny coverage because of a worker's preexisting health condition. 

King's office concluded that the state law governing the alliance "does not contain the necessary legal authority to establish a New Mexico exchange that comports with federal law."

Martinez's office says opening up this can of worms could make it impossible for New Mexico to set up its exchange in time for people to start using it on Oct. 1, meaning the federal government would have to step in like it will in 25 other states that refused to establish health insurance exchanges. Complicating Martinez's position is that the legislature passed health insurance exchange bill in 2011 but she vetoed it.