Watchdog: Follow the Money

Audit: New Mexico provider overbilled government

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News,Business,Watchdog,New Mexico,Follow the Money

SANTA FE, N.M. (AP) — An audit commissioned by the state estimated the government overpaid a mental health provider $655,800 because of improper billings, but the organization's top executive said Friday the auditors were wrong.

The Counseling Center was among 15 nonprofit providers of mental health services that had their Medicaid payments suspended last summer because of the audit that alleged fraud, mismanagement and billing problems over more than three years.

The Alamogordo-based provider has been cleared of fraud by investigators for Attorney General Gary King, but they identified overbillings in a sample of claims. It's the responsibility of the Human Services Department to recover overpayments for mental health services provided to New Mexicans through Medicaid and other programs.

The attorney general continues to investigate allegations against other providers.

Human Services Department spokesman Matt Kennicott said the agency was reviewing billings by The Counseling Center and expects to soon give the provider an amount the state will seek to recover. The amount of overbillings may not be the same as auditors projected, he said, but it will be hundreds of thousands of dollars.

Jim Kerlin, the nonprofit's CEO, disputed the audit's estimate of overpayments and complained of errors in the report, including that he had been paid $168,000 in 2011. His salary actually was $87,000, Kerlin said.

"They are wrong in what they say we did wrong," Kerlin said in a telephone interview. "If we had any opportunity whatsoever to have questions and answers and the ability to know what they were looking for, we could have clearly demonstrated that we were doing nothing wrong."

Providers have complained they were not given an opportunity to respond to the allegations against them before the department froze payments and referred the matter to the attorney general. The department contends that federal Medicaid rules require the state to halt payments once it concludes there are credible allegations of fraud.

The Counseling Center is out of business because of the dispute with the state. The department, after suspending payments, contracted with Arizona companies to take over providing services that had been done by the New Mexico nonprofits.

Behavioral health services can range from counseling for mental disorders to community support services in which workers help train mentally ill patients deal with tasks in daily life such as handling money and performing household chores.

King's office released a redacted copy of its investigative report and portions of the audit involving The Counseling Center in response to public records requests by The Associated Press and others.

The report found improper billings for community support workers who called patients to remind them of appointments. However, Kerlin said the provider was entitled to reimbursements for those services. Other problems cited included a worker "with only a high school education preparing treatment plans and assessments."

The audit by Boston-based Public Consulting Group estimated $655,800 in overpayments using two methodologies.

One approach extrapolated overpayments of $612,663 based on a random sample of 150 claims for payments of $12,284. Auditors found $1,873 in overpayments involving 17 percent of the sampled claims. The attorney general's report said that sampling allows for a statistically valid extrapolation of the findings.

Auditors also reviewed a year's worth of documents in the case files of five patients and found problems with 20 percent of the claims. They identified overpayments of $43,137 on $193,871 worth of billings.

The provider was paid $6.5 million from mid-2009 to 2013 for services through Medicaid and other programs, according to the audit.

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Follow Barry Massey on Twitter at https://twitter.com/bmasseyAP

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