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SANTA FE -- A key New Mexico Senate Democrat is proposing the creation of an oversight board following the upheaval of the state's behavioral health system as another state official points to potential conflicts of interest between nonprofit providers and a for-profit Arizona company.

Senate Majority Whip Tim Keller, D-Albuquerque, wants a new board to approve contracts, vet decisions and ensure that a firm hired by the state is performing its duties.

Keller said the decisions regarding behavioral health providers and all the oversight are currently in the control of one appointed cabinet secretary.

"For anything this important, best practices dictate you have a publicly accountable governing board," Keller told the Albuquerque Journal.

The proposal comes after the New Mexico Human Services Department in June froze payments to 15 nonprofits that provide mental health and substance abuse services after an audit found what the agency said was a high rate of billing problems and possible mismanagement.

Under the agency's direction, some nonprofits are currently being transitioned to management by Arizona companies.

The move has drawn fire from state lawmakers and has sparked anger from advocates.

On Sunday, the Journal reported that top executives of six of the nonprofits were on the payroll of a separate Arizona-based company, Providence Service Corp., until they were forced out earlier this summer by the Human Services Department.

A review of tax records showed the nonprofits paid amounts ranging from $200,000 to $900,000 a year to a Providence subsidiary and another nonprofit firm controlled by Providence for providing administrative support services that included Medicaid billing to the state.

Human Services Secretary Sidonie Squier said the situation "is riddled with financial conflicts of interest, and it calls into question whether Medicaid dollars are being spent appropriately."

Roque Garcia, a former Providence employee who worked with Southwest Counseling Services in Las Cruces, said the relationships between the executives and Providence were part of a "perfectly legal business model that has been used around the country." Garcia said the model was designed to help small behavioral health providers survive.

Garcia said the Arizona nonprofit companies the state has brought in to run the New Mexico nonprofits as a result of the audit use the same model.

Human Services Department officials said Providence initially provided the state with information about its role in New Mexico but cut off communication when officials asked to see specific contracts with CEOs of the New Mexico nonprofits.

Some lawmakers have been critical of Gov. Susana Martinez's administration for its handling of the audit and the secrecy around it.

Critics haven't been satisfied with the administration's explanations at a series of legislative hearings, and they're proposing changes that could be taken up in the 2014 legislative session.

Last week, the administration drew more heat when a representative from a Boston-based audit company said he and Martinez officials visited an Arizona company before the audit even began.

Other senators said last week that they'll push for legislation that would require a five-day notice to providers of funding suspensions, afford them a hearing, and make the changes retroactive so that the currently impacted nonprofits could request hearings.

Keller said he hopes to get his bills which are still being drafted considered by interim legislative committees this fall.

Associated Press,

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