New Mexico Groups File Suit to Block Move of Medicaid Mental Health Services from Managed Care to Fee-For-Service

Two southern New Mexico not-for-profit organizations on Feb. 9 filed suit to prevent the state Human Services Department from moving mental health services from the state's Medicaid managed care system into a fee-for-service system, the Albuquerque Journal reports. In October, HCFA did not renew the mental health portion of New Mexico's managed care waiver, known as Salud!, and directed the state to return mental health services to fee-for-service (Romo, Albuquerque Journal, 2/13). Advocacy groups pushing for the move cited inadequacies in the availability and quality of mental health services, monitoring of data, and in grievance and appeals procedures for consumers as grounds for termination of managed care (disabilitynews.com, 10/2000). Prior to 1997, New Mexico had provided Medicaid beneficiaries mental health services under a fee-for-service structure; to comply with the HCFA directive, the state must revert to that system. Under the new fee-for-service program, set to begin March 1, the state would pay psychiatrists, therapists and other mental health services providers "directly without advance approval of managed care organizations." But two groups, Families and Youth Inc. and Border Area Mental Health Services Inc., said that "if the change goes forward, service to hundreds of Medicaid clients in southern New Mexico would be reduced or eliminated." According to the lawsuit, the new payment structure would make it difficult for some providers to maintain their caseloads, and providers would suffer "financial disruption" because of "inability to project revenue streams." Kathleen Hunt, director of Border Area Mental Health Services, said, "We could lose thousands of dollars immediately and be forced to reduce services drastically." The plaintiffs also "contend" that many professionals not required to be certified under the Medicaid managed care program would be prohibited from serving Medicaid beneficiaries under a fee-for-service system. Representing the state, Barry Bitzer, deputy director of the state Human Services Department, indicated that he was "sympathetic with the goals of the lawsuit." He added that Gov. Gary Johnson's (R) administration had contacted the Bush administration to request a reversal of HCFA's October decision. If the fee-for-service program goes into effect, Johnson will seek $31 million in additional funding for next fiscal year's $1.7 billion Medicaid budget. The lawsuit names Robert Maruca, director of the state Human Services Department's Medical Assistance Division, and the HCFA director for Medicaid and State Operations as defendants (Romo, Albuquerque Journal, 2/13).