Auditor troubled over altered mental health audit

SANTA FE, N.M. (AP) — State Auditor Hector Balderas is questioning why a state agency provided his office with a behavioral health audit report that was altered to remove a conclusion that auditors found no “credible allegations of fraud” in a review of case files for more than a dozen providers under investigation for potential misconduct.

Balderas obtained a subpoena last week from a district judge in Santa Fe to try to shed more light on the revisions made by the Human Services Department.

Gov. Susana Martinez’s administration used the report in freezing Medicaid payments to the providers in June, and in having the attorney general’s office launch an investigation of 15 nonprofit providers of mental health and substance abuse services to needy New Mexicans.

Balderas’ office said in court filings the department’s failure to provide it with a complete version of the report — as required by a court order earlier this year — is misleading and has hampered work that an independent auditor is doing for the office.

Department spokesman Matt Kennicott said Monday the agency removed a sentence from the report prepared by Public Consulting Group Inc. because it’s the responsibility of the department — not the auditing firm — under federal Medicaid provisions to determine whether there are “credible allegations of fraud” that would trigger an investigation.

“It’s not like we’re trying to subvert any process or anything like that,” Kennicott said. “You don’t hire the auditor to make that determination. So for them to make that statement is not what they were hired for.”

Evan Blackstone, the state auditor’s chief of staff, said in a statement that the department never notified Balderas’ office about the revisions after giving it the report.

“For these reasons, the state auditor is now forced to pursue additional legal action to obtain the original, unaltered PCG report and to independently resolve inconsistent explanations,” Blackstone said.

The subpoena requires the department to provided Balderas’ office with any audit reports by the Boston-based consulting group that were modified by the department. It also requires the agency to turn over a wide range of email and other communications between the consultant and department staff about report revisions.

Balderas’ office said it found the report discrepancy by chance in comparing what was provided by the department under terms of a July court order and a heavily redacted partial report publicly released last month by Attorney General Gary King’s office.

Missing from the report given to Balderas was a passage that said, “PCG’s case file audit did not uncover what it would consider to the credible allegations of fraud, nor any significant concerns related to consumer safety.”

Kennicott said he didn’t know why the state auditor and attorney general received slightly different reports.

“I don’t know if they just got the wrong version of it or what,” Kennicott said. “The only edits that were done that I know of were some typos here or there and that singular sentence.”

Most of the report remains confidential. The attorney general’s office contends public disclosure could undermine its investigation into allegations of overbilling and fraud.

Balderas’ office has an independent auditing firm reviewing the department’s annual finances and scrutinizing the department-commissioned audit to determine whether its statistical analysis is valid. The review also is to determine if the department has adequate safeguards against Medicaid fraud.

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