A Santa Fe judge on Friday called a decision by Gov. Susana Martinez’s administration to withhold Medicaid funds from a behavioral health care agency “arbitrary, capricious or otherwise not in accordance with the law.”
The decision by state First District Judge Francis Mathew marks a victory for Alamogordo-based The Counseling Center, which was forced to shut down after the Medicaid payments were frozen due to fraud allegations. The center’s attorney, Knicole Emanuel, told The New Mexican the ruling also will set a precedent that mental health care agencies can use in their legal battles with the state.
The Counseling Center was among 15 providers whose Medicaid funding was cut off in June 2013 after the Martinez administration announced that an audit had found “credible allegations” the agencies had committed $36 million in Medicaid fraud over three years of submitting bills for treating low-income patients.
The state has recovered at least $4.2 million from two providers through settlement agreements, but potential legal liabilities for New Mexico are mounting, as the Human Services Department continues to face lawsuits related to the accusations. Ten providers have sued the department in federal court for due-process and contract violations relating to the June 2013 mental health care shake-up. The case is ongoing, and the state denies wrongdoing.