Two More Behavioral Health Provider Settlements

On Wednesday August 21, 2019 , the administration of Governor Michelle Lujan Grisham announced it has entered into settlement agreements with 2 more New Mexico behavioral health providers. Originally, there were 15 nonprofit mental illness and drug addiction providers that provided services throughout the state.

The providers had their Medicaid funding frozen in 2013 by the previous Republican Governor based on alleged fraud and over-billing. New Mexico’ system for treating mental illness and drug addiction was seriously undermined by the actions of the previous Republican administration.

The latest settlements bring the number of mental health providers that have settled with the state to 5. The Lujan Grisham administration is moving forward to ending long-running lawsuits that have cost the state millions of dollars. There are still other lawsuits pending.


One of the providers, Team Builders Counseling Services, will receive more than $1.9 million from the state. Team Builders was one of the state’s largest behavioral health providers. It operated in 23 counties and employed upwards of 400 workers. As part of the settlement, the state agreed to allow Team Builders to resume operations in the state and agreed to expedite the process for resumption of providing services.

The second settlement is with Counseling Associates. The state has agreed to pay more than $173,000 in damages.

In announcing the settlements Human Services Secretary David Scrase had this to say:

“New Mexico deserves and needs stability in our behavioral health network. … These settlements reflect a shared commitment to rebuild what was lost.”


Both settlements contain the standard provision found in settlements entered into by state government agencies that “neither the state nor the providers” admit any liability or fault. This no doubt also helped the previous Republican Administration save face by not being force to admit the false and heavy handed approach it took to destroy all the non profits that allowed them to bring in Arizona providers. The settlements reflect good faith negotiations to end the litigation to avoid prolong litigation costing thousands.

There are 6 behavioral health nonprofits that still have pending claims under a consolidated lawsuit in the Santa Fe First Judicial District Court. The State’s Human Services Department and the Risk Management Department are working with the other nonprofit providers that filed lawsuits against New Mexico. There is no doubt that settling these cases is critical to attempt to rebuild the state’s system for treating mental illness and drug addiction.

One of the cruelest things that former Republican Governor “She Who Shall Not Be Named” did was when she ordered an “audit” of mental health services by nonprofits in New Mexico based on questionable information. The audit eventually devastated New Mexico’s behavioral health system.

In June 2013, under the direction of the former Republican Governor, the Human Services Department (HSD) cut off Medicaid funding to 15 behavioral health nonprofits operating in New Mexico. In 2014, more than 160,000 New Mexicans received behavioral health services, with most of those services funded by Medicaid, according to the Human Services Department.

After the audits were completed, the former Republican Administration said that the outside audit showed more than $36 million in over billing, as well as mismanagement and possible fraud. Under the orders of the Republican Governor, Human Services Department agency brought in 5 Arizona providers to take over from New Mexico providers.

In early 2016, following exhaustive investigations, the Attorney General cleared all 15 of the healthcare providers of any wrongdoing and exonerated all of them of fraud. Even though the NM Attorney General found no fraud and cleared the nonprofits of fraud, the damage had been done to the nonprofits. With the Medicaid funding freeze, many of the 15 nonprofits could not continue and just went out of business leaving many patients without a behavioral health service provider. Lawsuits against the state were initiated by the mental health care providers.

Three of the five Arizona providers brought in by the previous Republican Administration in 2013 to replace the New Mexico nonprofits pulled out of the state. New Mexico’s mental health system is still struggling to recover.

The former New Mexico Republican Governor never understood the need for mental health services. The mental health care providers were easy targets for her conservative anti government philosophy to freeze Medicaid funding to bring 15 nonprofits to their knees and forcing them out of business. To the former prosecutor, the answer was always increasing penalties and incarceration.

It has never been fully reported on how the 5 Arizona Heath Care providers were selected to replace the New Mexico nonprofits. It has also never been revealed to what extent the former Republican Governor was involved with the selection nor what orders her office gave in the selection of the out of state providers.

What is known is that legacy of Republican Governor “She Who Must Not Be Named” is a legacy of shame when it comes to the destruction of New Mexico’s nonprofit mental health care system. Her political wrath and cost cutting measures affected thousands of New Mexico residents in need of mental and behavioral health care services and she simply did not give a damn.

Governor Michelle Lujan Grisham served as Director of New Mexico’s Agency on Aging under Governors Bruce King, Gary Johnson and Bill Richardson. Governor Richardson elevated the position to the state cabinet. In 2004. Lujan Grisham was appointed as New Mexico Secretary of Health where she was a champion for mental health services. After 8 very long years, New Mexico has a Governor that truly understands the need for effective and critical mental and behavioral health care services.

After 8 very long years, New Mexico has a Governor that truly understands the need for effective and critical mental and behavioral health care services. The process to rebuild the state’s behavioral health care services will be a slow process that no doubt will take years.

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Pete Dinelli was born and raised in Albuquerque, New Mexico. He is of Italian and Hispanic descent. He is a 1970 graduate of Del Norte High School, a 1974 graduate of Eastern New Mexico University with a Bachelor's Degree in Business Administration and a 1977 graduate of St. Mary's School of Law, San Antonio, Texas. Pete has a 40 year history of community involvement and service as an elected and appointed official and as a practicing attorney in Albuquerque. Pete and his wife Betty Case Dinelli have been married since 1984 and they have two adult sons, Mark, who is an attorney and George, who is an Emergency Medical Technician (EMT). Pete has been a licensed New Mexico attorney since 1978. Pete has over 27 years of municipal and state government service. Pete’s service to Albuquerque has been extensive. He has been an elected Albuquerque City Councilor, serving as Vice President. He has served as a Worker’s Compensation Judge with Statewide jurisdiction. Pete has been a prosecutor for 15 years and has served as a Bernalillo County Chief Deputy District Attorney, as an Assistant Attorney General and Assistant District Attorney and as a Deputy City Attorney. For eight years, Pete was employed with the City of Albuquerque both as a Deputy City Attorney and Chief Public Safety Officer overseeing the city departments of police, fire, 911 emergency call center and the emergency operations center. While with the City of Albuquerque Legal Department, Pete served as Director of the Safe City Strike Force and Interim Director of the 911 Emergency Operations Center. Pete’s community involvement includes being a past President of the Albuquerque Kiwanis Club, past President of the Our Lady of Fatima School Board, and Board of Directors of the Albuquerque Museum Foundation.