Ann Morrow & Assocs. v. New Mex. Human Servs. Div.

• Decision Date: 30 June 2022
• Docket Number: A-1-CA-39391
• Citation: 517 P.3d 965
• Parties: ANN MORROW & ASSOCIATES, Appellant-Petitioner, v. NEW MEXICO HUMAN SERVICES DIVISION, Appellee-Respondent.
• Court: Court of Appeals of New Mexico

517 P.3d 965

ANN MORROW & ASSOCIATES, Appellant-Petitioner,
v.
NEW MEXICO HUMAN SERVICES DIVISION, Appellee-Respondent.

No. A-1-CA-39391

Court of Appeals of New Mexico.

Filing Date: June 30, 2022

Davis & Gilchrist, P.C., Bryan J. Davis, Ellen A. Geske, Albuquerque, NM, for Petitioner

New Mexico Human Services Department, John R. Emery, Deputy General Counsel, Santa Fe, NM, for Respondent

BUSTAMANTE, Judge, retired, sitting by designation.

{1} We are presented with a legal question: Under its regulations, can the State recoup as an overpayment the entire amount it paid on a claim for medical services rendered when part of the services billed for were provided and part were not? Concluding that it cannot, we reverse and remand for further proceedings.

BACKGROUND

{2} This case is presented to us by the parties with a limited factual and procedural history. Our report of the history of the case will thus be similarly truncated, and will rely to some extent on uncontested assertions in the parties’ briefs. This limitation is acceptable because we are considering and resolving a narrow legal issue unaffected by the otherwise long history of the dispute between the Human Services Department (HSD) and the Appellant, Ann Morrow & Associates (Morrow).

{3} Morrow was a provider of behavioral healthcare services under contract with the medical assistance division (MAD) of HSD to provide services to persons who qualify for Medicaid assistance. In 2011, Morrow was audited by HSD's Medicaid behavioral health services manager. After receiving the audit in February 2012, HSD began withholding payments to Morrow pursuant to 42 C.F.R. § 455.23 (2012) for "a credible allegation of fraud." Morrow asserts that HSD refused to disclose the results of the audit to Morrow. This state of affairs continued until August of 2015, when the Attorney General's Medicaid Fraud Control Unit (MFCU) apparently concluded that it would not pursue Morrow for fraud. After that determination, HSD issued two overpayment demands to Morrow in the total amount of $441,997.05. The parties agree that they involved three different problems with Morrow's files: (1) instances in which there was no substantiating documentation reflecting any services; (2) instances of double billing in which the same time was billed by two different therapists; and (3) instances in which Morrow billed for more time than was actually spent with clients.

{4} Morrow challenged both demands and both were considered in one hearing held pursuant to 8.352.3.9 NMAC. HSD presented the testimony of the MFCU investigator with regard to the details of her audit of Morrow's records. All of HSD's documentary evidence was admitted without objection. Morrow did not submit any documentary evidence. An HSD billing expert testified that it is HSD's policy to recoup the entire amount of an up-coded claim if the provider did not catch and adjust the up-coded claim in a timely fashion. The witness relied generally on 8.351.2 NMAC and 8.302.2 NMAC in support of HSD's practice. The Administrative Law Judge (ALJ) agreed with HSD's position and...