State settles Medicaid dispute for sliver of original demand

SANTA FE, N.M. (AP) — The New Mexico Human Services Department has settled with a former Las Cruces behavioral health provider for a sliver of the amount it originally demanded.

More than four years ago, the department accused Southwest Counseling Center of overbilling the state by $2.8 million in Medicaid reimbursements. The state, however, lowered its demand to just under $485 — the amount both parties have settled at.

The settlement is part of a four-year dispute that shook up New Mexico’s behavioral health network. It began in 2013 when the state Human Services Department cut off Medicaid and other funding to 15 providers, citing allegations of overbilling, mismanagement and possible fraud.

The state claims it demanded the $2.8 million after the group had failed to provide proper documentation for its billing. Officials say the state lowered its demand once correct paperwork came through.