UPDATE 7/25 8p: The attorney general's office says an agreement has been reached for State Auditor Hector Balderas to have access to an audit that identified potential overbillings and fraud by behavioral health providers.
Chief Deputy Attorney General Al Lama said Thursday a state district judge in Santa Fe has been asked to issue an order making clear the audit report will be protected from public disclosure once it's provided to Balderas.
The auditor and Human Services Department support the request.
Balderas said his office needs the information in auditing the department's finances. He obtained a subpoena to try to force the department to provide him with the audit done for the agency.
Lama said public disclosure of the audit could jeopardize the attorney general's investigation of allegations against the behavioral health providers.
Additionally a federal judge has ruled in favor of New Mexico freezing payments to behavioral health services providers in a dispute over possible fraud, waste and billing problems.
U.S. District Judge M. Christina Armijo on Thursday denied a request from eight nonprofit providers that asked the court to lift the state's suspension of Medicaid payments for mental health and substance abuse services to needy New Mexicans.
The ruling came as a legislative committee heard testimony from social services advocates who warned that the payment freeze would cause a serious disruption of behavioral health services to Medicaid recipients.
The Human Services Department contends it has taken steps to prevent an interruption of services. Contracts have been signed with five providers from Arizona to step in and provide assistance.
UPDATE: Governor Susana Martinez responded to a question about why State Auditor Hector Balderas was refused access to an audit of 15 Behavioral Health Providers by saying "the State Auditor himself doesn't do audits."
In the KOB-TV report, Balderas countered that his office is in charge of 600 to 700 audits every year. He said his job is to regulate every audit firm, oversee each audit report, and govern how auditors are supposed to be auditing government.
Balderas said he plans to file a lawsuit against the Martinez administration.
New Mexico's State Auditor Hector Balderas has asked a state district judge to subpoena the audit that found evidence of Medicaid fraud by 15 behavioral health providers. The state Human Services Department froze funding, prompting an outcry among providers and their clients. Critics are concerned about care for critically vulnerable populations served by drug treatment centers and suicide prevention programs.
Balderas said he was given permission by a judge last week to inspect the audit. But he said the audit was not made available by Monday's deadline. “For a Secretary to go hire an audit firm, proclaim that the audit firm has a certain amount of findings and not run them through my office nor release those findings or the methodology to me it's very concerning," said Balderas. "It's not just an assault on transparency. You also have an agency that did not follow regulatory requirements that are in place. There's a very strict separation of powers for a reason."
Several of the 15 providers have been granted good cause exemptions and have had some or all of their funding released. Eight firms are seeking an injunction to force the Human Services department to resume payments. Other non-profit firms are shutting their doors this week.
Human Services Secretary Sidonie Squier testified before the state Legislative Finance Committee last week to explain the department's decision to freeze funding. According to a press release, Squier said, “We need to get back to a system that delivers care responsibly both administratively and clinically. We need to get back to a system that New Mexico can trust. And have no doubt, trust has been broken.”
Squier said evidence of up to $36 million dollars of fraud billing fraud was found and that HSD is required to submit evidence of Medicaid fraud to the state Attorney General's office for investigation. HSD plans for several Arizona-based contractors to maintain service continuity for providers who are under investigation.