Santa Fe Reporter Unpacks the Entire Behavioral Health Scandal: See who got paid and why

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The Santa Fe Reporter has done it again.  SFR’s Justin Horwath spent months digging into the behavioral health scandal to see who actually benefitted and why.  The results, while not surprising, are troubling.

To wet your appetite, here are a few of the biggest revelations:

On June 24, 2013, in what’s become known as the behavioral health care shakeup, the Martinez administration made a stunning accusation: that “credible allegations” existed to show that 15 nonprofits pro-viding mental health services to Medicaid enrollees defrauded the federal program out of $36 million in a three-year period….

Records show OptumHealth—the United Healthcare subsidiary that’s been driving the insurer’s profits—led state officials toward the fraud allegations just as it was pitching to sell its new fraud detection products.

But those “revelations” from OptumHealth came just days before their multi-year contract to manage the state’s $370 million contract was set to expire – and OptumHealth had just conveniently begun pitching it’s new system for processing claims that was supposedly better at detecting waste, fraud and abuse.

By October, Optum alerted HSD officials that it had flagged suspicious billing activity of behavioral health providers. In an already widely publicized email to an HSD official, Optum CEO Elizabeth Martin laid out options of how to handle the allegedly unscrupulous behavioral health providers.

“For example,” she wrote, “OHNM has in its Arizona network outstanding behavioral health providers with over $200,000 in revenue who could assume wholesale management.”

The publication of Martin’s email by media outlets in October 2014 caused an uproar because it indicated that state officials had vetted the Arizona agencies before the Boston-based Public Consulting Group even started its audit.

But there’s a less-quoted line at the end of the email. It’s Martin making a pitch to the HSD official that “in the long term,” Optum, whose contract with the state was set to expire, “has the capability” to ensure program integrity for billings.

SFR makes the case that Optum was pushing the waste, fraud and abuse narrative off onto providers to show that their new anti-fraud system was useful to the state. ” ‘This was a result somebody already wanted to come to,’ Bryan Davis, an attorney representing the providers in the lawsuits against HSD, says of New Mexico’s allegations against his clients.”  You’ll have to read the whole article to get the impact.

And all the while, OptumHealth and their parent company, United Health Care, were spending hundreds of thousands of dollars to wine and dine the governor’s chief of staff and state health leaders.

In March, while Optum showed up at the 15 agencies to audit books with officials from the Boston auditing firm, Squier and Gardner began preparing for a trip to the upscale Deer Valley Resort in Park City, Utah, situated near mountain slopes that local boosters say are host to the “greatest snow on Earth.”

More than 50 corporate representatives whose companies contributed $250,000 (the “statesmen level”) or $100,000 (the “cabinet level”) were invited to listen to speeches from a handful of public officials in Republican gubernatorial administrations during the closed-to-the-press, “very casual and informal” retreat, whose focus, according to the group’s records, was “relationship building.”

For Sunday evening, the first day of the trip, officials scheduled cocktails followed by a buffet-style dinner at the Empire Canyon Lodge, which offers intimate meals cooked in stone fireplaces. Horse-drawn sleigh rides were available, “before and after the speaking presentation” by then-chairman of the RGA, Virginia Gov. Bob McDonnell.

Reese Edwards, then United Healthcare’s Colorado-New Mexico lobbyist, is listed in records as one of the firm’s two “statesmen” for the event, meaning the company paid half a million dollars to send two representatives to it.

And the state’s Republican Party pocketed a cool $25,000 just days after meeting with Martinez during her first campaign.

During the heat of her first gubernatorial campaign, Susana Martinez used what would turn out to be, in many ways, a prophetic phrase. She wrote in a Sept. 15, 2010, column that the state had lost its prestige due to the “waste, fraud and abuse” of her predecessor’s administration.

A day before published the column, Martinez attended a meeting at United Healthcare Group’s Pennsylvania Avenue office in Washington DC, according to campaign records and a source close to the corporation.

And afterward, the company cut a $25,000 check that would eventually land in the coffers of the state Republican Party’s Political Committee, its reports to New Mexico campaign finance regulators show.

The check came, the source says, with a personal thank you note from a United Healthcare vice president named Stephen Heyman to Martinez.

“We enjoyed meeting with you,” read the note from the head of the corporation’s state government lobbying divison, “and look forward to seeing you again soon in Santa Fe.”

With swipes of a pen, an insurance company executive in the nation’s capital had given to a state party in New Mexico more money than an adult eligible for Medicaid—the federal program that covers health care costs for low-income individuals—makes in an entire year.

And United Healthcare, thanks to decisions made after Martinez became governor, would be awarded state contracts to oversee taxpayer money that funds mental health services.

The law firm representing the company also represented Martinez’s chief political advisor, Jay McCleskey, in child custody hearings in 2013 and their lobbyists were the first to suggests that their providers in Arizona would be willing and able to undertake a “wholesale” takeover of New Mexico providers – and made this suggestion before audits were complete.
Horwath’s reporting paints the story of Optum/United Health executives and lobbyists working with the same auditors and vendors in North Carolina, to the same result.  And those lobbyists and executives seemed so sure that the open contracts for New Mexico services would be awarded to them, they were recommending their own clients and friends for future work before those contacts were even written.

This story is a must read if you want to understand the tangled web between money and politics in the Martinez administration.  Here’s the full story.  Seriously, go read it.