Last month New Mexico suspended payments to 15 behavioral treatment providers (the state’s system is blended mental health and substance abuse) for possible overbilling, at the behest of OptumHealth New Mexico, the insurance company contracted to administer public funds for substance abuse and mental health patients. The providers account for 85 percent of the state’s behavioral healthcare spending and more than 30,000 of the most vulnerable patients, according to the Human Services Department (HSD).

HSD contracts with UnitedHealthcare and United Behavioral Health, which through the joint venture OptumHealth New Mexico provides mental health and substance abuse services to eligible recipients.

The original reports on the providers came from Optum, the state’s managed care organization for behavioral healthcare, which has the contract to administer the payment for the services, according to Matt Kennicott, HSD spokesman. Optum “brought to us suspicious activity in late 2012,” Kennicott told ADAW in a July 16 email. “From there, we hired an independent auditor, Public Consulting Group [PCG], to audit these firms.”

The audit itself has not been released, but a state summary cites overbilling, lack of follow-up of suicidal patients and other issues. Collectively the 15 providers overbilled the Medicaid program by $36 million between 2009 and 2012, according to HSD.

Under federal regulations, the state has to suspend Medicaid payments pending an investigation by the state attorney general. The full audit has not been released, but according to a summary provided by the state, the investigation will take time and resources.

The state has ordered the 15 agencies to provide services even though they are not being paid.

Neither the state nor OptumHealth had told providers that there were any problems before the payment suspensions. Providers are reportedly shocked and panicked.

“At this point, substance abuse treatment or any other behavioral health treatment is not being affected by the current investigation,” Kennicott told ADAW. “Clinicians were not audited,” he said. “The management practices of these agencies were.”

Asked how many patients are affected by the suspension of payments, Kennicott said “all consumers are still being served at this time.”

OptumHealth declined to provide anyone to interview, through spokesman Brad Lotterman, who referred us to the state HSD.

We also contacted the Substance Abuse and Mental Health Services Administration (SAMHSA), asking for a comment from administrator Pamela Hyde on the situation. SAMHSA declined an interview through spokesman Brad Stone, who said “SAMHSA is not commenting on this state matter.” Immediately before joining SAMHSA in 2009, Hyde was secretary of New Mexico’s HSD, where she led the initiative to merge mental health and substance abuse services and to involve private managed care organizations in administering state funds (see ADAW, October 12, 2009). At the time, OptumHealth had just replaced ValueOptions as the state’s managed care organization for behavioral healthcare. Optum’s contract is due to expire at the end of this year.