Behavioral health providers under investigation for possible overbillings, mismanagement and fraud have lost an appeal of a court ruling that allows New Mexico to continue to withhold Medicaid payments.
The 10th U.S. Circuit Court of Appeals in Denver on Monday dismissed the appeal by eight nonprofit providers.
A federal judge in Albuquerque last month denied the providers' request for an order stopping the state from freezing payments for mental health and substance abuse services.
A lawyer for the providers said the lawsuit against the state remains pending in district court.
A legislative committee last week sent a letter to the U.S. Health and Human Services Department seeking assurances that New Mexico won't lose Medicaid funding if payments to the providers are restored pending the outcome of the state's investigation.