Contrary to state officials’ claims, New Mexico didn’t have to abruptly suspend all Medicaid payments to 15 behavioral health providers in June 2013 following an audit that discovered over-billing and potential fraud. In June 2013, the state of New Mexico suspended Medicaid payments to 15 health organizations that provided services such as drug abuse and suicide counseling to tens of thousands of New Mexicans. The decision disrupted services for some recipients and created chaos among the organizations, many of which eventually went out of business. New Mexico state officials insisted that the nation’s health care law “required” the halt in payments. But a review of federal regulations and documents, as well as health care experts, found that the nation’s health care law gives states’ discretion in deciding whether to suspend payments and risk disrupting patient care. The federal government told states in a 2011 memo that, in certain circumstances, they could opt “not to suspend payments” by issuing good-cause exemptions to organizations.
