3176179860_5b74cda3c0In September, Katrina Lujan thought her days were numbered at Santa Fe’s Equest Counseling Center.

Her firm had gone two months without payment for services provided with the mentally ill, a lag that put a severe crunch on her bottom line. But more than that, it contradicted what New Mexico’s new overseer of behavioral health – Optum Health — told her in July.

“They told us we’d be paid in three days,” Lujan told a state panel Tuesday. “September came by. And I realized we were in big trouble.”

Equest is one of hundreds of nonprofits and businesses that serve New Mexico’s mentally ill and those struggling with substance abuse that found themselves cash strapped recently as they awaited long-overdue payments from Optum. The firm took over managing and distributing the money paid to providers July 1.

Optum’s missed payments are the latest trouble New Mexico has encountered since farming out the management of behavioral health services to the private sector in 2005. State officials maintain the privatization model is worth the effort and is attracting attention nationally.

They also are holding out hope that the state has rounded the corner of Optum’s failure to pay up for services already rendered on time.

These days Lujan and her counseling firm are awash in money. OptumHealth has released $15 million in the last two weeks to New Mexico’s financially strapped providers, an action that came on heels of state sanctions against the firm.

New Mexico fined Optum more than $1 million in late October and threatened terminating its four-year $1 billion for not paying millions of dollars to hundreds of providers like Lujan for already-completed services. In some cases, the claims were several months old.

“Now we’re suddenly getting paid. It’s not our money. So now they have to hire another specialist to clean up this mess,” Lujan told the New Mexico Behavioral Health Collaborative, which hired Optum earlier this year.

In order to get the money out fast, Optum is paying the providers without the usual quality-control measures in place, state and Optum officials said. But company and state officials also said they planned to do an extensive review to ensure providers aren’t paid twice for the same service.

Optum, for its part, says it is correcting as quickly as possible the problems that caused this situation in the first place.

“We’re trying to get it all done by January,” Optum’s chief executive officer, Sandra Forquer, said Tuesday. The company has added 65 temporary employees in recent weeks to help process claims sent to the firm from behavioral health providers across New Mexico.

As of Tuesday, the firm had about 13,000 unprocessed claims, a representative said Tuesday. That’s down from a high of more than 50,000 claims, according to a state power point presentation handed out Tuesday at a meeting of the Collaborative.

To ensure similar backlogs and other problems don’t arise, New Mexico hopes to hire a monitor this month to oversee Optum’s performance, said Katie Falls, acting secretary of the state’s Human Services Department, a Collaborative member.

If Optum is found lacking, New Mexico could be forced to make a tough decision, such as terminating the firm’s four-year $1 billion contract. That potential scenario surfaced Tuesday, even if tentatively, in a goal the Collaborative adopted. It simply said “develop Plan B.”

“If this can’t work out, if over the next few weeks and months it looks like we’re not making progress, it’s not getting better, we cannot be held hostage,” the collaborative’s director, Linda Roebuck Homer, said.

State lawmakers are aware of the state’s problems with Optum and are demanding the Collaborative firm up its plans with or without Optum before the January regular legislative session, Rep. Luciano “Lucky” Varela, D-Santa Fe, and chairman of the Legislative Finance Committee, said Tuesday.

Bad times going forward?

But on Tuesday there were immediate concerns raised by state officials.

“My biggest concern is that folks are turned away for services,” said Rick Rodriguez, deputy cabinet secretary for the Department of Finance and Administration, who also feared a drag on the state’s economy with layoffs at providers. “It has a huge impact on rural New Mexico.”

In addition to not being paid by Optum for months, some providers said Tuesday that they had had to take workers away from patient care and instead have them help enroll clients in Optum’s system, a task they said was both time-consuming and burdensome. Under the current system, patients must be enrolled in the system before Optum will consider paying the claim.

The state hopes to have solved that problem by separating out the enrollment process from the payment process, Roebuck Homer said, a decision that hopefully will cut down on the time workers are spending on administrative tasks rather than delivering health care, officials said.

Beyond the more immediate problems, New Mexico’s run-in with Optum could create recruitment problems, said Albert Dugan, M.D., of the National Alliance on Mental Illness.

Dugan said he was appalled by Optum’s performance so far and speculated that New Mexico might have trouble recruiting psychiatrists and other medical professionals to work in behavioral health.

“Maybe next year we won’t have enough money,” Dugan said later in an interview. “But this year we have enough money but we’re not distributing it, our accounting is bad, our books are bad, our information system is bad.”

What went before

New Mexico has had other problems since privatizing behavioral health services.

The state contracted its behavioral health care services to a separate firm — Value Options — in 2005, in the hopes of streamlining delivering services. ValueOptions took over management of those services from more than a dozen state agencies.

But OptumHealth beat out ValueOptions for the state’s four-year behavioral health contract this past year after criticism of ValueOptions’ performance.

Critics of ValueOptions accused it of trying to protect its bottom line by denying treatment or making access to care difficult.

ValueOptions, meanwhile, released a statement Oct. 30, saying that it was prepared to take over the contract should Optum fail.