State finds no fraud by mental health provider

January 16, 2014 • State News

SANTA FE, N.M. (AP) — Attorney General Gary King’s office said Thursday that authorities found no fraud by a behavioral health provider in Alamogordo that came under scrutiny in an investigation into Medicaid billing by nonprofit mental health providers.

The announcement came as the attorney general finished its investigation of the first of more than a dozen nonprofit mental health providers that had their Medicaid payments suspended last year by the Human Services Department because of allegations of fraud, mismanagement and billing problems.

Even though his office found no fraud, King said it identified Medicaid overbillings of $19,023 based on claims it reviewed. The agency won’t disclose how many Medicaid claims it examined because that’s part of its investigative records, according to Phil Sisneros, a spokesman for the attorney general.

No criminal charges will be brought against The Counseling Center in Alamogordo based on the attorney [auth] general’s investigation. It’s up to the department to recover money from improper billings for mental health and substance abuse services.

After suspending Medicaid payments last summer, the state contracted with Arizona companies to take over providing services that had been handled by the Counseling Center and other nonprofits. Behavorial health services can range from treatment for drug and alcohol abuse to suicide prevention and counseling for mental disorders.

Counseling Center CEO Jim Kerlin said the provider was out of business and he disputed there were overbillings.

Human Services spokesman Matt Kennicott said the department suspects that overbillings are much higher than $19,000 and it will investigate claims involving the Alamogordo nonprofit now that the attorney general finished reviewing the fraud allegations.

“Medicaid funding is intended to support those in need, and even though provable fraud couldn’t be shown in this case, taxpayers have a right to recover significant overbillings and overpayments, in this case over hundreds of thousands of dollars,” Kennicott said in a statement.

Kerlin said it’s doubtful the nonprofit would resume operations as a mental health treatment provider because it no longer had any assets. He said the organization would fight to collect payments withheld by the state for an estimated $400,000 in services to Medicaid patients during the period leading up to the takeover by an Arizona company.

“They put us out of business. I don’t see any way that can be turned around now,” said Kerlin, who served as CEO for 25 years.

He said the provider had once served 900 to 1,000 Medicaid-eligible patients annually through clinics in Alamogordo and Ruidoso.

Kerlin said he hoped the Legislature would change state law to ensure that mental health providers have more due process rights when fraud allegations are made by the department, which administers the Medicaid program.

The department has maintained that federal regulations required it to halt Medicaid payments and turn over fraud allegations to the attorney general’s office to investigate.

Sen. Gerald Ortiz y Pino, an Albuquerque Democrat, said he expected the state could face lawsuits from mental health providers that were forced out of business.

“Why did it take six months to clear some agency of this and in the meantime they went out of business. This is really a distressing thing,” Ortiz y Pino.

La Frontera, a mental health provider based in Tucson, Ariz., continues to offer services to Medicaid patients that once were served by The Counseling Center. The company also has taken over contracts the center had to provide behavioral services to schools, counties and courts, said La Frontera CEO Dan Ranieri.

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