- Associated Press - Friday, July 14, 2017

ALBUQUERQUE, N.M. (AP) - New Mexico Auditor Tim Keller is trying to prevent health insurance companies from paying out certain dividends to shareholders or other investors pending an ongoing audit related to premium taxes.

The request to state regulators announced by Keller’s office on Friday is the latest development in a case centered on whether insurance companies are paying what’s owed to the state.

Earlier this week, New Mexico Attorney General Hector Balderas sued one of the state’s largest health care companies, saying that it underpaid its taxes by tens of millions of dollars over a 15-year period.

Officials with the Presbyterian health network dispute the allegations, saying they have been audited numerous times and have been working with state regulators to determine their tax liability.

As the state has grappled with a budget crisis, legislators have been forced to search for additional revenues to ensure the funding of everything from education to public safety. Premium taxes have been one target since an initial audit of a sampling of taxes collected between 2010 and 2015 turned up at least $193 million in possible underpayments by insurance companies.

Dividends are reviewed by the Office of the Superintendent of Insurance to determine if the insurers have enough money to pay claims to New Mexicans.

Keller said the state has been allowing the companies to “drain millions of dollars that may be needed for settlements.” Companies, including Presbyterian and Lovelace, have had approved dividends of more than $100 million, he said.

“It’s prudent to put the brakes on this until we get to the bottom of what taxpayers are owed,” Keller said in a statement.

The state insurance agency said late Friday that it will continue carrying out its duties, including the review of extraordinary dividend requests.

Heather Widler, a spokeswoman with the insurance superintendent’s office, noted that all dividend requests go through an extensive evaluation that looks at the companies’ current and future obligations. The office is open to hearing more from Keller about his concerns, and the work related to questions about the collection of premium taxes is ongoing, she said.

The external audit being done in cooperation with the state auditor’s office, the state Department of Finance and Administration and the Legislative Finance Committee is expected to be done in the fall, officials said.

Widler said the priorities include collecting any underpayments as well as having a statutorily-correct process for collecting premium payments.

Presbyterian officials on Friday said the network does not have shareholders and that any dividends are reinvested in health care.

Presbyterian has been in business for more than a century and has numerous hospitals and clinics in New Mexico. The lawsuit filed by the attorney general specifically names Presbyterian’s health plan and insurance company as defendants.

“As a health plan, we take our responsibilities as a taxpayer very seriously and pay what we owe - millions in premium taxes every year,” said Dale Maxwell, CEO of Presbyterian Healthcare Services.

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