KUNM

Nonprofits Cut Services In Arizona While Expanding Into New Mexico

Feb 28, 2015

Another Arizona-based behavioral health provider is planning to shut down operations in New Mexico. La Frontera is one of five nonprofits that took over for local providers accused of fraud. Turquoise Health and Wellness announced earlier this year they would close their New Mexico offices on April 1st.

KUNM’s Elaine Baumgartel spoke with Phoenix-based reporter Craig Harris of the Arizona Republic. Governor Susana Martinez’s administration offered the Arizona providers millions of dollars in subsidies to expand into New Mexico in 2013.

Harris: So the businesses here, the companies here, thought, “Wow! If we’re gonna get those subsidies, we’ll go over!” Well, the problem was, come 2014 the subsidies ran out and they weren’t able to run profitable businesses over in New Mexico. So they’re taking money, in some cases, $3 million, $4 million, $5 million dollars out of their pockets here and funneling it over to New Mexico. At the same time they’re telling clients here “Hey, we don’t have enough money to provide mental health care services to your son or your daughter because we just don’t have the money.”

KUNM: What does the behavioral health service system look like in Arizona right now?

Harris:  Since the recession began there has been a kind of a wax and a wane of services. Some years the federal government was cutting services, some years the state was cutting services. And so the overall effect is that since the recession what we found is that there’s been a 5 percent reduction in the number of people served here in Maricopa County which is the Phoenix metro area. So it is harder to get services now than it was. And it’s also, even for those folks who are getting services, it can take months for some people to get in home care or coaching or counseling to help them deal with their children.

KUNM: So you spoke to some of these officials in the Arizona companies. What did they say about their expansions into New Mexico and how that was going for them?

Harris: They’re all losing money. There is no question. All the ones who talked to me, and we were able to get records or interviews with at least 4 of the 5 nonprofits, and all of them were in the red after the subsidies ran out. And I think to a certain extent they would say they may have been sold a bit of a bill of goods. They were promised one thing by the Governor of New Mexico. But I think when they got over there they realized it was a lot tougher to provide services there than it was here. And the clientele was a different culture in New Mexico than it was for some of the clientele that they were supporting and providing services to here in metro Phoenix.

KUNM: And so what did you find when you were investigating the sources of funding for the Arizona companies that expanded into New Mexico? Are they using money in New Mexico for services for New Mexicans that they legally should be using for patients in Arizona?

Harris: There’s no law that prohibits these nonprofit organizations, because they’re essentially businesses that have nonprofit status, to use money for a related venture. It just becomes an ethical question of, “Should you be using that money to try to prop up a business in another state?” And what we also found is that some of these organizations who were going over to New Mexico, they were paying the CEOs huge amounts of money. For example, Southwest Behavioral, one of the organizations that runs Agave in new Mexico, it reduced its reimbursement mileage to their employees but they gave their CEO a car allowance of $28, 258 last year. And we did the math, that’s enough to lease a Porsche or a BMW. So the executives of these organizations were still doing very well while services were being cut to folks who are low income here in metro-Phoenix.