- Associated Press - Tuesday, May 6, 2014

SANTA FE, N.M. (AP) - Attorney General Gary King announced Tuesday his office found no Medicaid fraud but overbillings by Santa Fe-based Easter Seals El Mirador, which is among more than a dozen mental health providers under investigation by the state since last year.

King said in a statement that improper billings of $34,126 were identified among claims his investigators reviewed but there was “no actionable evidence of fraud.”

A report released by King’s office said “investigative staff could discern no pattern of a deliberate attempt to bill Medicaid for services that were not provided.”

Mark Johnson, the organization’s CEO and president, said, “We’re absolutely delighted that we’ve been exonerated, not surprised, but delighted.”

He said the nonprofit hadn’t seen information from the attorney general’s office to explain the alleged overbillings.

“We are anxious to have full disclosure so that we can intelligently defend ourselves,” Johnson said.

The organization was among 15 nonprofit providers of mental health and substance abuse services that had Medicaid payments suspended last June by the Human Services Department because of allegations of fraud, mismanagement and billing problems from July 2009 to January 2013.

Gov. Susana Martinez’s administration contracted with Arizona companies to take over the behavioral health services that had been offered by most of the New Mexico-based providers to about 30,000 Medicaid-eligible adults and children.

The services range from counseling for mental disorders, family and group therapy, suicide prevention and drug abuse treatment.

The Republican governor has come under sharp criticism from legislators as well as the providers for halting payments without first giving the nonprofits a chance to review and respond to the fraud allegations.

The administration has restored Medicaid payments to two providers after they agreed to reimburse the state $4.2 million for improper billings.

King has completed investigations of Easter Seals El Mirador and one other provider, but in both cases found nothing to justify fraud charges against them. Investigations continue against others.

King’s office is responsible for investigating possible Medicaid fraud but it’s up to the Martinez administration to recover money from improper billings.

Human Services spokesman Matt Kennicott said the agency suspects that overbillings by the Santa Fe provider are much higher than the $34,000 identified by the attorney general’s office.

A department-commission audit estimated the government overpaid Easter Seals El Mirador nearly $851,000 because of improper billings, according to documents released by the attorney general’s office in response to a public records request by The Associated press.

Kennicott said the legal burden of proof for the attorney general to bring criminal fraud charges is much higher than for the department’s findings of “credible allegations of fraud,” which prompted the agency to halt Medicaid payments and refer the cases to the attorney general for investigation.

“In this case, just because his office couldn’t prove the existence of fraud doesn’t mean that this entity didn’t significantly overbill Medicaid, siphoning resources away from those with serious behavioral health needs,” said Kennicott.

The state only suspended payments for behavioral health services through Medicaid. Easter Seals El Mirador has continued receiving Medicaid payments for serving developmentally disabled children and adults.

The department is seeking to collect about $340,000 in alleged overpayments by The Counseling Center in Alamogordo, which went out of business while it was under investigation by the state. A top executive for the defunct provider disputes there were any overbillings. King’s office found about $19,000 in overpayments.


Follow Barry Massey on Twitter at https://twitter.com/bmasseyAP

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