State will pay $10M to mental health providers after suit

SANTA FE, N.M. (AP) — New Mexico will pay out $10 million to resolve the last remaining lawsuits over a shake-up of its behavioral health system in 2013 under the prior administration of Republican Gov. Susana Martinez.

Disclosed Wednesday by the Human Services Department, the settlement locks in payments to five businesses and turns the page on a bitter confrontation that drove many mental health care providers away or out of business completely.

Martinez's administration froze payments to 15 mental health service providers in 2013 after an audit identified $36 million in Medicaid overpayments. The state attorney general later cleared the providers of any criminal wrongdoing, but 10 filed lawsuits.

Medicaid payments were frozen without any credible allegations of fraud, the settlement states.

“Some providers were forced to close their doors and discontinue provision of any behavioral health services," the agreement states. “Other providers were forced to discontinue provision of nearly all behavioral health services. Employees of Providers lost their jobs. Individuals needing behavioral health services in New Mexico were unable to obtain such services."

The largest portion of the settlement — a 29% share — is earmarked for Santa Marta El Mirador of Santa Fe and Alcalde — formerly known as Easter Seals El Mirador. The other beneficiaries are Border Area Mental Health Services, Southwest Counseling Center, Southern New Mexico Human Development and Families and Youth Inc.

First-year Democratic Gov. Michelle Lujan Grisham campaigned on rebuilding mental health and substance abuse treatment services in a state with the highest rate of alcohol-related deaths in the nation. Many counties in the sparsely populated state lack licensed providers of mental health services for patients who rely on government assistance, according to a recent study by the U.S. Health and Human Services Department's inspector general.

Patsy Romero, CEO of Santa Marta El Mirador, says her organization employs about 200 people, down from 650 people before the shakeup in 2013. Services were discontinued for children and adolescents with severe emotional issues, including alternative classrooms in Española and Taos.

She said it is still unclear whether the organization will restore discontinued behavior health services.

Romero said the settlement “represents the money that we spent as an organization over the last six years to defend ourselves and maintain our business.”