Behavioral Health Crisis Updates: Fewer Services, More Layoffs

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The battle over Governor Martinez’s surprise plan to turn New Mexico’s non-profit behavioral health providers over to Arizona firms is heating up after a top senator agreed with the federal government that the change resulted in serving fewer patients at the same time one Arizona company laid off or fired 20 employees citing a need to reduce costs under their contracts which pays the company’s executives up to $300 an hour.

First, from Sen. Mary Kay Papen and the Behavioral Health Collaborative:

Senate President Pro Tem Mary Kay Papen, D-Las Cruces, says a report by the interagency Behavioral Health Collaborative showed a decline of nearly 10,000 people getting services after Arizona companies replaced New Mexico providers in 2013.

But the administration of Gov. Susana Martinez says the data being cited aren’t yet final and continues to dispute there was a drop-off in services…

Papen pointed to the most recent quarterly report from the Behavioral Health Collaborative, which keeps track of the number of individuals served.

It said New Mexicans served in mental health or substance abuse programs from July through September 2013 numbered 33,349, compared with 43,090 for the same quarter in 2012 – a drop of 22.6 percent.

For October through December 2013, the number in the report is cumulative, picking up the previous quarter as well. That cumulative figure was 52,457, compared with 62,131 a year earlier – a decline of 15.6 percent.  – (full article at ABQ Journal here)

Another article on behavioral health points to more problems with the Martinez-administration’s plans.  A third Arizona firm announced that it is cutting New Mexico jobs and expenses:

La Frontera, an Arizona firm brought in last year to care for the mentally ill and those struggling with addiction across southern New Mexico, laid off or fired 20 employees last week, including 11 in Las Cruces.

About half were laid off to reduce expenses; the rest were fired for “performance issues,” according to Dan Ranieri, the Tucson, Ariz.-based CEO for La Frontera New Mexico. Another six workers, including two “director level” staffers, have resigned since mid-March, Ranieri said Tuesday.

La Frontera has lost about $200,000 per month since January, which prompted last week’s decision to reduce staff, Ranieri said. He added that he believes the firm will break even by the end of May.

The loss of those 26 positions decreases La Frontera’s New Mexico workforce to 344, a 14 percent reduction from the 400 people La Frontera inherited last summer when the firm took over for six New Mexico behavioral health service providers, Ranieri said.

And more layoffs could be possible. Ranieri confirmed La Frontera has given notice it will not renew the lease of a Las Cruces facility that provides transitional housing to mental health clients when the lease expires at the end of June.

The facility employs 10 people. The nonrenewal notice was “precautionary,” Ranieri said.

La Frontera’s staff reductions coincide with action by another Arizona firm that took over services in part of northern New Mexico last year, Agave Health. Earlier this month, Agave cut hundreds of employees’ salaries and reduced other costs, including reimbursements for travel, saying it had been operating at a loss each month.

A third Arizona firm the state contracted with, Valle del Sol, laid off three therapists at a Los Lunas facility last October because of reduced revenues. (read the full article from the Las Cruces Sun News here)


The Santa Fe New Mexican previously reported that Arizona CEO’s would be paid $300 per hour ($624,000 per year if they work full-time on NM programs) under the contract negotiated by the Martinez administration.

Since the Martinez administration claimed to have found evidence of fraud among more than a dozen providers, independent reviews by the attorney general have cleared one provider of any wrongdoing and serious questions continue to be raised about the claims made by the administration in an audit they still refuse to release.