OptumHealth: Martinez Administration Knew Of Potential Fraud In 2009

Jan 21, 2014

Elizabeth Martin (R) addresses Legislative Finance Committee members on Jan. 20, 2014. LFC staff Pam Galbraith sits to her right.
Credit Deborah Martinez

A company that oversaw $135 million worth of Medicaid services in New Mexico told a legislative committee Monday that it had been sounding alarms long before payments were frozen to 15 behavioral health providers after an audit last year; however, lawmakers  pointed out that doesn’t square with OptumHealth’s own consistently high audit scores for those firms.

Many of the nonprofits under OptumHealth New Mexico’s management had previously received high scores for their operations, but last spring an audit by the firm PCG found evidence of suspected fraud, waste and abuse, according to statements from officials at the New Mexico Human Services Department.

OptumHealth NM CEO Elizabeth Martin told lawmakers on the Legislative Finance Committee that she didn’t know why the state Human Services Department didn’t act sooner, since her company had told the state agency about problems before. 

“We have been referring since 2009 over 100 referrals of irregularities that could constitute potential fraud, waste and abuse. We did refer,” said Martin, her attorney at her side.

But Senate President ProTem Mary Kay Papen told Martin that Optum’s record of positive audits belied that statement.

“Optum is putting out audits that are in the 90s with some of these agencies, and yet then, they’re brought back in as being fraudulent. I just don’t understand,” Papen responded.

Martinez administration officials contracted with  PCG to do the audit in early 2013, which resulted in the funding freeze last summer and the replacement of local providers with five Arizona firms, at a cost of almost $18 million to state taxpayers.  

Senator Papen also asked why OptumHealth traveled to Arizona with HSD officials and the PCG audit firm in November 2012, before that company's audit was performed in New Mexico.

Other Democratic lawmakers at the hearing hammered away at Martin’s insistence that Optum played only a small role in the behavioral health debacle.  

Democratic State Senator Carlos Cisneros of Questa asked OptumHealth NM CEO Elizabeth Martin if its finding of potential fraud was connected to the company's entitlement to recover a portion of misbegotten Medicaid payments by NM providers.  In October of 21013, two of the providers accused of fraud agreed to reimburse the state for $4,240,000.

Republican lawmakers on the committee who in the past have been vocal in criticizing Optum’s responsibility did not ask any questions at Monday’s hearing.