Saturday, September 14, 2013


It will be a month next week since I wrote about my new home state, New Mexico’s so-called mental health service scandal.

I say, “so-called” scandal, because the state’s Human Services Division, while proclaiming a $36 million in fraudulent billings, made by first 15, now 12 mental health service providers, continues to provide no useful information about who done what wrong to whom and how.

In fact, I’d have been content to give the HSD more time to sort things out had today’s NY Times not “taken national” a story about what reporter Don Frosch called “a sweeping criminal investigation.”  Me, I’d call it a “reeking” investigation which has been, so far at least, “swept under the rug.”

There are 2 reported investigations; one led by NM Attorney General Gary King, who has refused to answer questions about his probe from the accused providers, their clients or journalists.  He’s even “protected” his work by refusing to share data with the State Auditor.  He has, however, whined that he may not have enough resources to carry out the massive criminal probe, which his office says may not be completed for months.  Meanwhile the accused providers have been cut off from public funding, many are closed and many of their vulnerable, mentally ill or disabled clients have been left hanging while their successors from Arizona slowly set up shop.

There is also a purported Federal investigation of the case, but so far, the Centers for Medicare and Medicaid Services haven’t visibly proceeded beyond a conference call with a few abandoned clients of the shuttered service providers.

So much for the prosecutorial future.  He are a few things we know about the investigation’s past and present.

The State Human Services Division has contracted with Arizona service providers to replace the fired New Mexicans at far higher rates of pay, especially at the executive/managerial level, than the allegedly scandalous providers charged.

At least one of these well-paid providers, it has been reported, has ties to one of Governor Susana Martinez’ biggest campaign fund bundlers.

HSD has claimed that Federal rules gave them no discretion when it came to cutting off the accused providers.  But, a close reading of the applicable rulebook shows that to be untrue.  In fact, according to Linda Rosenberg, the CEO of the National Council for Behavioral Health, "I've never seen a state behave like this." 

The Executive Summary of the actual audit done by the Boston-based Public Consulting Group (PCG) made no recommendation that any of the providers be closed, and said none of them were bad enough to mandate closure.  Of the 15 providers audited, only 7 were rated bad enough for “potential closure” even to be considered.  As for the other 5 locked out providers, all PCG recommended was that the state provide some additional training and “potentially embed clinical management to improve processes. 
Then, there’s this about PCG.  It conducted an audit of health service providers for the State of North Carolina in 2012, and alleged, the Santa Fe New Mexican reported, “$38.5 million in Medicaid overpayments, [for which it] was paid $3.2 million.”

But, according to North Carolina State Auditor Beth Wood’s report, the New Mexican reported, a review of “one of the companies, which PCG said had overpayments totaling $1.34 million, submitted “additional documentation and re-reviews, [and] the recoupment amount was revised downward to only $22,093.”
Overall, “Wood found that of the $38.5 million overpayments cited, the Health and Human Services Department had only been able to collect $3.7 million — less than 10 percent.”

In other words, the bounty hunter’s claim for payment was only about half a million less than the total amount the State of North Carolina took in.
Not to worry, says the NM HSD, their contract with PCG has no such bounty clause, just a flat payment of, the investigative website New Mexico In Depth says it was told, “$2 million.”

But wait, PCG was hired on the recommendation of OptumHealth which had originally been overseeing New Mexico’s health service providers.  OptumHealth’s contract with the state says, it gets from 25 to 40% of any fraudulent claims against HSD that it recovers.  Does this mean they get the bounty-hunter’s pelf for PCG’s accusations?  This is another thing the Health Service Division refuses to talk about, to the public, the media or even the State Legislature.
Part of Optum Health’s claim to be paid for helping to unearth the alleged frauds is that they “installed new program-integrity software in late 2011.”

Asked what was new about their software, which HSD has said was “not off-the-shelf,” but custom-made, Optum has stayed mum, but at least one report says, HSD still uses FICO software which is straight off the shelf.

Oh, and who is Optum Health? 
It is one of the innumerable subsidiaries of the country’s biggest health service company United Health Group, whose subsidiary Optum Insight was the re-named Ingenix, a database supplier run out of New York State in 2008, when investigators for then NY Attorney General Andrew Cuomo found it was supplying United Health with phony estimates of medical billing costs that allowed the giant UH medical insurer to underpay doctors and patients, who then overpaid “their share” of their medical costs.

How big a scam was that?  United Health settled with the AMA and patients by paying back $350 million in ill-gotten gains.
But, wait, that scandal was chicken-feed compared to the one 2 years earlier in which United Health’s CEO Dr. Bill McGuire was forced to resign and disgorge himself of $468 million and pay a “whopping” $7 million fine for manipulating his stock option opportunities and covering it up from the company’s shareholders.  Even after that punishment (repeat after me –“TOO BIG TO JAIL?”), the Wall Street Journal estimated that McGuire was allowed to keep about $800 million. 

Oh, but that was years ago, you say.  Yeah, but today’s CEO of United Health Group, the Grand Poobah of fragments like Optum Health, McGuire’s “hand-picked successor,” is Stephen Hemsley, who was then president and chief operating officer, and a member of the board of directors.
“Sweeping” investigation, as the Times says, or “reeking?”  What do you think?


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