The Eastern New Mexico News - Serving Clovis, Portales and the Surrounding Communities

AG jumped the gun suing Presbyterian before audit's done

 


In a classic New Mexico case of “Ready, Fire, Aim,” New Mexico Attorney General Hector Balderas has filed a lawsuit accusing Presbyterian Healthcare Services of defrauding the state and possibly engaging in criminal conduct as part of a long-running dispute over the amount of premium taxes the company owes.

Except the lawsuit doesn’t actually say how much the AG thinks the state’s largest health care provider should fork over — because a separate audit of premium tax payments by Presbyterian and several other health plans including Lovelace, United Healthcare and Blue Cross-Blue Shield is still ongoing.

Not to be upstaged by Balderas’ lawsuit, state Auditor/Albuquerque mayoral candidate Tim Keller declared he would seek to block the health insurance companies from paying dividends already approved by the Office of the Superintendent of Insurance until this mess is sorted out.

Keller says he wants to be sure there would be money to pay taxes owed — if that’s what the audit finds. He apparently isn’t comforted by Presbyterian CEO Dale Maxwell’s comment that the nonprofit organization has considerable reserves, or by Lovelace CEO Ron Stern’s statement the “previously authorized dividend from our reserved monies did not impact our ability to satisfy any potential outstanding obligations.”

Neither Balderas nor Keller seem to be concerned about the impact of his actions on the ability of Presbyterian and Lovelace to finance continued improvements in a health care delivery system that has been overwhelmed by Medicaid expansion.

The tax dispute stems in large part from the interpretation of changes in state law that governed the tax liability for Medicaid payments in 2003-2004. An early sampling audit done at the request of the Legislative Finance Committee found that five major companies could owe as much as $200 million — a figure that had lawmakers licking their chops as they tried to make ends meet in crafting a cash-strapped budget.

In Presbyterian’s case, the company says it revised its returns in 2013 in consultation with the Office of the Superintendent of Insurance — which regulates the companies. The amended tax returns were to recover what Presbyterian considered overpayment of taxes, and Presbyterian points out it has paid $345 million in premium taxes since 2001.

Balderas says three whistleblowers — represented by an attorney in House Speaker Brian Egolf’s law firm, making this a trifecta of high-ranking Democrats — maintain Presbyterian “bullied” the OSI, in part by insisting on a full release in exchange for a negotiated settlement of taxes owed.

But that sounds more like “negotiating.” Hard-nosed? Perhaps. But that’s a long way from “fraud.”

Then again, without “fraud” Balderas and the whistleblowers aren’t looking at the kind of big payday reserved for cases brought under the Fraud Against Taxpayers Act, which allows treble damages.

If Presbyterian and the other companies owe premium taxes, they should pay up, which they say they are prepared to do. There should be no free pass. And it is perfectly reasonable for the auditor and AG to pursue this matter.

But to do so without waiting for (1) the completion of the audit Keller commissioned, (2) a declaratory judgment action to settle the interpretation of the state law and (3) a refusal to pay, the shoot-first, aim later legal display is over the top.

And New Mexicans who count on these companies to provide their health care ultimately will be the ones who suffer.

— Albuquerque Journal

 

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