New Mexico AG targets major health care provider over taxes
ALBUQUERQUE, N.M. (AP) — New Mexico’s top prosecutor is suing one of the state’s largest health insurance providers over allegations that it falsified Medicaid deductions and credits and as a result evaded tens of millions of dollars in premium taxes and surcharges.
State Attorney General Hector Balderas on Tuesday filed a lawsuit against Presbyterian Health Plan Inc., Presbyterian Network Inc. and Presbyterian Insurance Co. Inc.
The case stems from a previous complaint filed by whistleblowers and is part of an ongoing civil and criminal review of Presbyterian and other health care companies that is being conducted by the attorney general’s office. The state auditor’s office is also conducting its own review.
“When insurance providers break the rules, they must face consequences,” Balderas said in a statement issued after the lawsuit was filed.
Presbyterian officials disputed the claims made in the lawsuit, saying they have acted in good faith and with the intent to comply with the company’s legal obligations and responsibilities.
They called the allegations surprising, noting that the premium taxes paid by the health plan have been audited multiple times by independent firms and state agencies.
“Presbyterian has always acted with the utmost integrity in the Medicaid program for the members we serve, as well as state taxpayers,” spokeswoman Melanie Mozes said in a statement to The Associated Press.
Founded more than a century ago, Presbyterian has grown into a locally-owned network of hospitals and clinics around the state with nearly 11,000 employees. Presbyterian’s separate health plan has more than 450,000 members.
Balderas accuses Presbyterian of deliberately and systematically underpaying premium taxes between 2001 and 2015. Under state law, every insurer operating in New Mexico is required to pay a premium tax and surcharge.
The complaint alleges violations of the state insurance code as well as the Fraud Against Taxpayers Act. It seeks unpaid premium taxes along with civil penalties and other damages.
Presbyterian says in 2016 alone, it paid the state more than $52.6 million in premium taxes and more than $20 million in assessments that help fund state-sponsored insurance programs.
Mozes said the lawsuit will not distract Presbyterian from its mission to improve the health of patients.
Last year, legislative finance leaders, the auditor’s office and the state Department of Finance and Administration had asked for the attorney general’s help in reviewing possible underpayments by premium taxes by major health care companies.
State lawmakers in recent years have struggled to craft a state budget in light of declining revenues because of an overall weak economy and a downturn in the oil and natural gas sectors. They have been looking closely at spending related to health care, particularly expenditures related to the expansion of Medicaid under the federal Affordable Care Act.
In a 2016 briefing, the Legislative Finance Committee reported that the health care industry was the fastest-growing sector in New Mexico but that it was largely untaxed and that tax expenditures for the previous fiscal year amounted to more than $344 million.
Lawmakers moved earlier this year to accelerate the accounting of revenues from the insurance premium tax as one of the steps to keep the state solvent.