During the 60-day 2025 New Mexico legislative session, the legislature enacted what was referred to as the Behavioral Health Reform Package. Lawmakers earmarked more than $555 million to fund an overhaul the state’s system for mental health and substance abuse treatment programs.
On February 27, 2025 Governor Michelle Lujan Grisham signed the Behavioral Health Reform Package into law. The legislation consists of 3 Senate Bills that make sweeping changes to how New Mexico’s mental health and drug abuse treatment programs are run statewide.
The following is a description of each of the enacted Senate Bills signed into law by Governor Lujan Grisham:
Senate Bill 1: This bill creates the Behavioral Health Trust Fund for the state of New Mexico to support mental health and substance abuse treatment, prevention, and intervention programs throughout the state. The behavioral health trust fund will be invested by the State Investment Council. The trust fund will distribute 5% of its annual value to fund programs and support investments in necessary infrastructure, technology, and workforce development to facilitate the expansion of services. The fund could also help New Mexico unlock matching funds from federal, local, and private sources.
One major change made to Senate Bill 1 was removing a $1 billion appropriation for the new proposed trust fund. Money for the new fund was provided in a separate budget bill during the 60-day session and was for $555 million. The Behavioral Health Trust Fund, created by Senate Bill 1, aims to provide a sustainable funding source for regional behavioral health initiatives.
Senate Bill 2: This bill allocates $200 million to expand regional behavioral health services such as crisis response and outpatient care. The bill appropriates the funding to the New Mexico Administrative Office of the Courts and various state agencies to set up a new framework for behavioral health programs statewide. Senate Bill 2 was not part of the signing ceremony but never the less is part of the behavioral health reform package and became a part of general fund appropriations by the legislature.
Senate Bill 3: This bill requires regional plans be crafted for providing mental health and substance abuse treatment. The plans would be overseen by the state judicial branch and would include time lines and regional funding priorities. Senate Bill 3 aims to improve oversight and accountability for how behavioral health funds are spent.
NEW MENTAL HEALTH CARE MODEL
Under the enacted Behavioral Health Reform Package, the new mental health care model will put the State Judiciary in charge of planning while leaving the state Health Care Authority largely in charge of overseeing funding. This is a significant change from the former system which largely fell under the Governor’s executive branch jurisdiction. The legislation enacted increases accountability by requiring regional plans outlining priorities for providing mental health and substance abuse treatment. The new trust fund will provide annual funding to support the regional plans, which would largely be overseen by the state’s judiciary.
Top judicial branch officials during the 2025 legislature said New Mexico’s courts were willing to shoulder a larger role under a legislative plan to overhaul the state’s mental health and substance abuse treatment system. During a February 12, 2025 meeting of the Senate Finance Committee, Administrative Office of the Courts (AOC) Director Karl Reifsteck acknowledged the judicial branch was not a key player in the state’s behavioral health system. Reifsteck said the court system was willing to take on a larger role and had already begun preliminary work on how it would implement the changes proposed by the legislative package of bills. Reifsteck said this:
“This is not a role the courts requested, but it’s one we’re happy to accept if that’s the Legislature’s decision”.
Reifsteck said the judicial branch would act “very, very quickly” to implement the legislation.
The legislation signed by the governor took effect June 20, the date specified by state law for legislation approved during this year’s session that does not carry a different effective date. The spending infusion of $555 million is a key part of a new regional-based approach to behavioral health, after state spending in recent years failed to significantly move the needle.
CHANGES IN COMPETENCY LAWS FOR CIVIL MENTAL HEALTH COMMITEMENTS
During the 2025 legislative session, the New Mexico legislature also enacted the Omnibus Crime Package. The crime package passed by lawmakers is House Bill 8 and it too contained various criminal laws enacted. It includes provisions dealing with fentanyl trafficking, auto theft and drugged driving (DWI). It also includes outlawing the devices used to convert semi-automatic firearms into fully automatic weapons. The crime package also made major changes to how New Mexico handles criminal defendants deemed incompetent to stand trial and adding a dangerousness evaluation in such cases and giving judges more options for treatment programs.
House Bill 4 is the criminal competency legislation which was part of the enacted Bill 8 Omnibus Crime Package. It gives prosecutors more options to involuntarily commit people into a locked psychiatric facility if they are found to be dangerous to themselves or others and unable to stand trial. The courts will now have more options when dealing with suspects who are deemed incompetent to stand trial instead of simply releasing them back on the streets.
Under House Bill 4, when a court determines that a defendant is not competent to proceed in a criminal case the court shall determine if the defendant is dangerous and with a process for evaluating whether criminal defendants are competent to stand trial established. House Bill 4 specifically requires that “competency evaluators” determine whether defendants are dangerous to themselves or others. After a competency hearing, and if a defendant is found not to be competent, a judge then decides whether the defendant poses a threat. Based on that determination, a defendant is either ordered to attend an assisted outpatient treatment program or be sent to the state Behavioral Health Institute in Las Vegas, New Mexico.
State Representative Christine Chandler, sponsor of House Bill 4, said this:
“What we created was a pathway, two pathways. One for those who are seriously ill and potentially dangerous, and the other pathways for individuals who may get treatment and have their issues addressed in a more appropriate way than it has been over the many years.”
The link to review House Bill 4 is here: https://legiscan.com/NM/text/HB4/2025
NEW MEXICO HEALTH CARE RANKINGS WORSEN
On June 25, the New Mexico Legislative Finance Committee convened in Taos, New Mexico. Amongst the topics on the committee agenda were New Mexico’s Mental health care system and the impending changes mandated by the Behavioral Health Reform Package legislation and signed into law.
Amid the impending changes in the State Mental Health Care system discussed by the committee, a legislative report was presented to the Legislative Finance Committee. The legislative report comes a mere few months after the 60-day legislative session which ended on March 22 in which lawmakers focused on improving the state’s behavioral health system, including establishing a trust fund to spin off money annually for initiatives. It also follows the inaugural meeting the week of June 23 of the new Behavioral Health Executive Committee tasked with overseeing an overhaul of the system, an effort aimed at addressing regional gaps and barriers in care.
The report showed the state’s rankings in key behavioral health measures decreased from 2023 to 2024. Those measures include overall mental illness prevalence, in which New Mexico dropped from 36th to 44th in the nation, and an increase in substance abuse disorder among both adults and minors. According to the legislative report, the state’s behavioral health rankings have become worse despite significant investments by the Legislature in recent years. The Legislature approved a $100 million advance for the new Behavioral Health Trust Fund and other allocations for the year during the session. It also approved more than $2.3 billion in Medicaid provider rate increases, including close to $90 million for behavioral health providers, to improve access.
Notwithstanding all the funding, the report given to the Legislative Finance Committee found that New Mexico’s rankings nationally in key outcomes dropped between 2023 and 2024. The declines reported were:
- New Mexico dropped from 36th to 44th among states when it comes to overall mental illness prevalence.
- For adult substance use disorder, the state dropped from 32nd to 49th.
- For youth with major depressive disorder, the state dropped from 42nd to 46th.
- For youth with substance use disorder, the state dropped from 47th to 51st.
The report states:
“Even with the significant investment in the last few years, there is little evidence that outcomes are improving,”
Las Cruces Democrat Representative Nathan Small, a who chairs the Legislative Finance Committee, said a key takeaway from the report is that the need for behavioral health services in New Mexico is “rapidly increasing” and “really reaching crisis levels.” Small said this:
“For me, one of the most important things is that we face up to our challenges. … We don’t run from our problems.”
Asked whether taxpayers should be concerned about the drop in behavioral health rankings despite the Legislature’s investments, Small said he shared the “bedrock expectation” to see results.
Representative Small noted that in the past 12 months, nearly 2,500 new behavioral health care providers enrolled to deliver Medicaid services in New Mexico. He said it probably occurred because of increased Medicaid reimbursement rates. Small said this:
“We’re beginning to see some improvements, but I share the frustration and the expectation that these increasing investments need to yield better outcomes.”
The report notes access to providers via Medicaid is key to improving outcomes. The report states:
“With about 38% of the state enrolled, Medicaid is the greatest lever available to the state to reduce the prevalence of mental illness and substance use disorders and improve physical health for women and children.”
The link to the quoted or relied upon new source is here:
MEASURABLE PROGRESS
Tim Fowler, a spokesperson for the state Health Care Authority, said in a statement New Mexico is making measurable progress on behavioral health outcomes even as some metrics in the report to lawmakers may suggest otherwise. Key achievements noted include the following:
- “9% reduction in overall suicide rates.
- 17% decline in alcohol-related deaths from 2021-23, marking the second year of improvement.
- 17% reduction in high school students experiencing persistent feelings of sadness or hopelessness between 2021 and 2023.
- 38% drop in alcohol-related deaths in McKinley County, which Fowler said demonstrates targeted interventions can work.
- 8% decline in overdose deaths since 2021.”
Fowler said this:
“Higher reported mental illness prevalence often indicates success, not failure. … It means more people are getting identified and treated rather than suffering in silence. Our investments have reduced stigma and expanded access to care, bringing hidden cases into care.”
Fowler added that mental health investments take two to three years to show population-level results and he said this:
“We’re already seeing this work in our suicide and substance abuse programs, with measurable lives saved and improved youth outcomes.”
The report notes the Legislature has continued to invest in behavioral health services. Although it wouldn’t have affected the rankings listed in the report, the Legislature appropriated more than $555 million for behavioral health earlier this year. The report states:
“The Health Care Authority received $347.9 million, and the state enacted legislation to revamp the behavioral health system. … While these steps are intended to improve access, the most recent efforts are just starting, and there is little available data to show whether funding appropriated during the 2023 and 2024 sessions have made a difference.”
The state Health Care Authority serves more than 814,500 Medicaid members, or 39% of New Mexicans. The state is seeing growth in its provider network. Cabinet Secretary Kari Armijo told Legislative Finance Committee members this:
“We are the largest payer of health care in our state. [With growth in the provider network] … Things are really moving in the right direction. … We’ve seen over 4,000 net new providers into our network over the past 11 months. That’s across all provider types. … More than half of the provider network growth, or 57%, has been in behavioral health. … New Mexico ranks 16th in access to behavioral health care overall, so not at the top, which is where we all want to be, but it’s showing that these interventions are working.”
Armijo noted that while New Mexico struggles with newer issues, including substance abuse disorder, “things are really improving in terms of access to care.”
Armijo said an increase in Medicaid reimbursement rates to 150% of the Medicare rate in January is making a difference. Armijo said this:
“We are getting ready to launch in just a few days our new justice-involved pilot program where we’re really connecting people who are transitioning out of prison and jail to services so that they don’t have gaps in care.”
The link to the quoted or relied upon news source is here:
LEGISLATORS EXPRESS CONCERN
During the June 25 meeting of the Legislative Finance Committee several lawmakers expressed concern about state agencies’ previous use of allocated behavioral health funds and the recent trends. Representative Tara Lujan, D-Santa Fe said this:
“I’m not happy with the rankings I’m seeing … when we invested $2.2 billion over the past few years.”
State Health Care Authority Secretary Kari Armijo emphasized there have been positive developments even as state officials brace for the potential impacts of a congressional budget bill. That includes the possibility of an estimated 90,000 New Mexicans losing Medicaid benefits, in part due to increased work requirements that would start in 2027.
Specifically, Armijo cited an increase in behavioral health services provided over the last nine years and said 57% of the 4,000 or so of the new health care providers licensed in New Mexico since July 2024 are in the behavioral health field. Armijo said this:
“Things are really moving in the right direction. … The state has done a lot of work to rebuild the behavioral health system.”
The overhaul approved during the 2025 legislative session calls for regional plans for providing substance abuse and mental health treatment. The state’s judicial branch is playing a larger role under the new system, which officially took effect June 20.
Both the Administrative Office of the Courts and the Health Care Authority have hired new top-level staffers to lead the revised system, while a new executive committee tasked with reviewing and approving the regional plans held its first meeting this week. Even as the new system takes shape, Armijo said the number of behavioral health crisis centers around New Mexico has increased, with five such centers now operating.
However, some of the proposed federal funding changes could impact New Mexico’s revised behavioral health approach, as some treatment programs are covered under Medicaid.
Representative Mark Duncan, R-Kirtland, questioned whether the state’s goal should ultimately be to increase or decrease its Medicaid enrollment. Duncan told Secretary Armijo this during the hearing:
“My goal is to get people off [the Medicaid rolls], your goal is to get people on.”
Committee members questioned Children, Youth and Families Secretary Teresa Casados about whether $20 million in state funds intended to pay for behavioral health services for children had been misspent. CYFD utilized some of the money to fund the operations of group home facilities, which some legislators said does not qualify for federal matching funds.
In response, Casados said the budgetary language was made more restrictive by the Legislature from when the funding was first earmarked in 2022 to when it was reauthorized two years later. Casados said this:
“We believe the initial language allowed us to do that.”
But an LFC subcommittee voted before adjourning to approve a letter from the committee’s two chairmen. Senator George Muñoz, D-Gallup, and Representative Nathan Small, D-Las Cruces, requesting that State Auditor Joseph Maestas and Attorney General Raúl Torrez review the appropriateness of the spending. Such a review could trigger an investigation into whether the funding was misspent by CYFD.
The link to the quoted or relied upon news source is here:
https://www.abqjournal.com/news/article_540c310d-47f4-4854-87cc-b75833ada57e.html
NEW MEXICO SUPREME COURT ALSO SOUGHT FUNDING FOR BEHAVIORAL HEALTH
On January 23, 2024 New Mexico Supreme Court Chief Justice David Thomson of addressed New Mexico lawmakers to discuss the financial needs of the state’s court system. Thomson highlighted several areas requiring funding. One area he expressed concern over was new efforts and court outpatient treatment programs for individuals with mental illness.
During his State of the Judiciary Address Supreme Court Chief Justice David Thomson said this:
“The judiciary is committed to doing the hard work to support the policy initiatives of the Legislature and the executive on behavioral health. … We will do our part. … My request to you is that we are not asked to do more to the detriment of our core judicial function.”
Thomson asked lawmakers to make the $3 million in funding approved during a special session last year recurring to ramp up court-ordered assisted outpatient treatment programs for individuals with mental illness in three judicial districts. Judge Thomson said this:
“We need that extended if this is a program that is of value to you so we can be consistent in its application.”
Behavioral health remains a priority for the court’s with the $3 million pilot program underway for Assisted Outpatient Treatment (AOT). While early results show some success, comprehensive outcomes are yet to be determined. Thomson stressed funding not only courts but also criminal justice partners like law enforcement and public defenders.
A treatment program in the Santa Fe-based 1st Judicial District was recently launched using Legislature’s initial start-up funding, though Thomson said he did not yet have information about the number of participants. Judge Thomson told law makers “We literally turned on the switch” .
Senate Majority Leader Peter Wirth told judicial officials during a Senate Committee hearing he’s committed to securing recurring funding for the assisted outpatient program, which connects defendants with counseling, medication and other services for up to one year. Wirth also said it’s important for such court programs to be in place and fully staffed as legislators consider changes to the state’s approach to assisting individuals found not to be competent, both in criminal and civil cases. Wirth referring to the state’s assisted outpatient treatment programs said this:“This law has been on our books since 2016 and we just weren’t using it.”
The link to the quoted or relied upon news source is here:
https://www.abqjournal.com/news/article_aa158e90-d9c9-11ef-aa34-477662558954.html
RECALLING THE TOTAL DESTRUCTION OF NON-PROFIT MENTAL HEALTH CARE PROGRAMS BY GOVERNOR SUSANA MARTINEZ
One of the cruelest things that Republican Governor Susana Martinez did as governor was order an “audit” of mental health services by nonprofits in New Mexico which devastated New Mexico’s behavioral health system. 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 at the time.
In June 2013, under the direction of Governor Martinez, the Human Services Department cut off Medicaid funding to 15 behavioral health nonprofits operating in New Mexico. The Martinez Administration said that the outside audit showed more than $36 million in overbilling, as well as mismanagement and possible fraud. The audit was false. The Martinez Human Services Department agency brought in the 5 Arizona providers to take over.
In early 2016, at least 13 of the 15 nonprofits that were shut down were exonerated of fraud by New Mexico Attorney General Hector Balderas. Even though AG Balderas found no fraud and cleared the nonprofits of fraud the damage had been done to the nonprofits and many just went out of business. Lawsuits ensued and the Governor Lujan Grisham Administration was stuck settling most of the cases out of court to the tune of millions of taxpayer dollars.
Three of the five Arizona providers brought in by Governor Susana Martinez’s administration in 2013 to replace the New Mexico nonprofits pulled up stakes in the state and the states mental health system never fully recovered.
The freezing of Medicaid funding to 15 providers over false fraud and overbilling accusations and intentionally gutting the state’s mental health care system can only be described as cruel and vicious conduct by a political hack in the form of Republican Governor Susana Martinez. The state is still playing catch up to fill the void to provide mental health care services to those who desperately need them.
https://www.abqjournal.com/749923/third-arizona-behavioral-health-provider-to-pull-out-of-state.html
COMMENTARY AND ANALYSIS
Simply put, since 2014, the state of New Mexico has had a broken mental health care system largely in part because of the actions of former Republican Governor Susana Martinez when she ordered an “audit” of mental health services by nonprofits in New Mexico which devastated New Mexico’s behavioral health system.
The passage of the three behavioral health bills by the Senate in a bi partisan vote was a major victory and a reflection of just how far the state has come to fix its broken health care system. The passage of the 3 bills comes more than a decade after former Republican Governor Susana Martinez gutted New Mexico’s behavioral system in 2013. Enactment of all 3 Senate bills making sweeping changes to the state’s health care system to deal with mental illness and drug abuse was long overdue. However, all 3 Senate Bills only address programs and facilities.
The void to address the mandatory civil commitment of those who are to be danger to themselves, and others will now be addressed with the enactment of House Bill 4. House Bill 4 specifically requires that competency evaluators determine whether defendants are dangerous to themselves or others. House Bill 4 essentially contains the very same provisions that were mandated in Senate Bill 16 that was rejected in 2024. Under House Bill 4, after a civil competency hearing, and if a defendant is found not to be competent, a judge would then decide whether the defendant poses a threat. Once a person is determined not to be competent and determined to be a threat to themselves and others, the court could order mandatory treatment.
Simply put, the Behavioral Health Package and changes to the State’s civil mental health commitment process occurred in March, 2025. In all likelihood it will take at least two years to four years before we can expect the reforms to show any measures of success.