Governor Michelle Lujan Grisham Announces More Behavioral Health Provider Settlements

On Wednesday, December 4, 2019 , the administration of Governor Michelle Lujan Grisham announced it has entered into settlement agreements with 5 remaining of 15 behavioral health care providers whose Medicaid funding was frozen in 2013 by the former Republican Governor “She Who Shall Not Be Named”. The previous Republican Administration alleged fraud, over billing and mismanagement by the providers. New Mexico’ system for treating mental illness and drug addiction was seriously undermined by the actions of the previous Republican administration.

Since January 1 when Gov. Michelle Lujan Grisham took office, 10 behavioral health nonprofits have settled their claims against the state. Governor Lujan Grisham has said repeatedly that the forced closure of the 15 behavioral health program caused severe disruption to New Mexico’s behavioral health system and had ripple effects on many families and businesses and also caused private health care costs to increase.


The five providers who settled their claims are Southwest Counseling Center, Border Area Mental Health Services, Families and Youth Inc., Southern New Mexico Human Development, and Santa Fe-based Santa Maria El Mirador, which was formerly known as Easter Seals El Mirador. Originally, the 5 providers sought more than $27 million in damages.

The New Mexico Human Services Department is agreeing to pay $10 million to settle the legal claims. The settlement concludes the many years of litigation that has cost the state millions of taxpayer dollars. In exchange for the $10 million in settlement, the 5 providers have agreed to drop their lawsuits against the state. The New Mexico Human Services Department also agreed to waive its claim to alleged over-payments received by the providers.

According to Human Services Secretary David Scrase, his department plans to request a $10 million supplemental appropriation during the 30-day 2020 legislative session that starts in January to help cover the settlement. The Human Services Department is working with mental health care providers to rebuild the state’s system for treating mental illness and drug addiction.
Democrat Senate President Pro Tem Mary Kay Papen, D-Las Cruces, in a statement issued described the settlement agreements as bringing long-awaited resolution to the state’s behavioral health system and said:

“Now, we can get providers back in business to help those individuals who have had to do without needed behavioral health care services”.


During a July 9, 2019 press conference, Governor Michelle Lujan Grisham announced that her Administration negotiated settlement agreements with 3 of the nonprofit behavioral health providers affected by the 2013 Medicaid funding freeze. The 3 providers the state settled with were: Valencia County Counseling Services, The Counseling Center and Hogares.

Under the terms of the negotiated settlement agreements, the state will paid the Valencia County Counseling Services, The Counseling Center and Hogares nearly $2.7 million in damages. The 3 providers agreed to pay the state roughly $191,000. One of the providers will also be able to apply to the state for a reinstatement of its Medicaid provider number.
Notwithstanding the 3 settlements announced, Governor Lujan Grisham said the damage to New Mexico’s mental health system caused by 2013 Medicaid funding freeze ordered by her predecessor affected numerous families and businesses and it will take years to recover from and she said:

“Quite frankly, it’s created such deep holes in the other health care delivery systems in Medicaid … that in fact it’s raised the cost in the private market for health care.”

On Wednesday August 21, 2019, the administration of Governor Michelle Lujan Grisham announced it has entered into settlement agreements with Team Builders Counseling Services and Counseling Associates.

Team Builders Counseling Services received 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 state has agreed to pay more than $173,000 in damages to settle the claims with Counseling Associates.


The single most cruelest thing 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 and never even trying to address at least two of the underlying causes of crime: drug addiction and poverty.

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.

All of the 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 nonprofits 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 is no doubt that settling the cases is critical to rebuilding the state’s system for treating mental illness and drug addiction.


During my early teenage, high school and college years, my family dealt with a member who suffered from very severe, chronic and self-destructive mental illness who never recovered from it until his passing. I will always remember how my father was treated by health care professionals and yes at times by law enforcement.

Throughout my adult life and public service career, I made sure I knew how elected officials dealt with behavioral health care issues. When I was a prosecutor, I understood the importance of drug treatment programs and behavioral health programs as an alternative to prosecution and incarceration and returning people to be productive citizens.


In politics, more can be learned about a politician and their character by observing them in private and especially how they treat other people. A little more than 5 years ago, I attended a small fund raiser for then Congresswoman Michelle Lujan Grisham. In attendance was a person who we both knew and dealt with in the past, who was a very vocal critic of both of us in the past, and who we both understood to have mental health issues.

Michelle Lujan Grisham, not knowing that I was listening and watching her, had one of her aides approach her and ask her if she wanted the person removed before she started to speak. Her response was quick and sure and it told me more about her than I had ever known. She told her aide to talk to the person, make sure he did not need anything, and then after the event, make sure he got a ride home seeing as the person walked to the event and it would be dark when the event ended. This one act of understanding revealed the true character of an elected official.


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 and is now acting with understanding and compassion.

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.