State of New Mexico Health Care Authority

2025-004 (2024-004) Special Tests and Provisions: Provider Eligibility (Significant Deficiency in Internal Controls over Compliance) Assistance Listing Number(s) Name of Federal Program Federal Agency/Pass-through Entity Award Number Award Year 93.777/93.778 Medicaid Cluster Department of Health and Human Services Multiple 2025 Condition: For 9 of 40 providers tested, the Department was unable to provide an original approved Provider Participation Agreement (PPA). However, all 9 providers had been reverified and screened within the prior five years. For 5 of 40 providers tested, the Department was unable to provide evidence that the provider’s eligibility had been reverified within the prior five years. However, all 5 of these providers did have approved original PPAs as well as current licenses. Management has made progress on the prior year finding. A program was implemented to address the transfer of screening records from the legacy system into the current MMIS system and to provide monthly screenings of providers. However, due to the timing of the corrective actions, there are certain providers remaining in the system without the required screening documentation. Criteria: 42 CFR 455.410 states that the Department must require all enrolled providers to be screened. Per 42 CFR 455.412, the Department must verify the provider’s license has not expired and is valid. Context: A sample of providers who received payment during the year were tested to determine whether a required screening was performed before the provider was enrolled. Management has made progress on the prior year finding. A program was implemented to address the transfer of screening records from the legacy system into the current MMIS system and to provide monthly screenings of providers. However, due to the timing of the corrective actions, there are certain providers remaining in the system without the required screening documentation. Cause: In certain instances, information from the legacy system was not transferred to the current MMIS. Additionally, certain providers who received single-case approvals were being excluded from the revalidation processes in place. Effect: There is no documentation to show that a provider screening and license verification were conducted to show compliance with Medicaid requirements. Questioned Cost: None. Repeat Finding: This is a repeat finding (prior year finding 2024-004; original finding 2022-003). Recommendation: We recommend that the Department review and update controls to ensure proper screening and license verification is performed for all providers and that documentation of the screening and verification is retained in all cases. Current Status/Plan of Action: Re-implementation of the recertification and revalidation processes is currently completed in the provider enrollment system. We are moving forward with the revalidation/recertification implementation. Initial provider notifications (90-day notice) will be issued in March 2026. Completion Date: June 2026 Responsible Person: Bureau Chief, Provider Enrollment Services Bureau, Medical Assistance Division

Condition: Reports required to be submitted under the Federal Funding Accountability and Transparency Act (FFATA) were not submitted during the year ended June 30, 2024. Management has not made progress on the prior year finding. Criteria: Under the requirements of FFATA (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, the Department is required to submit reports to the Federal Funding Accountability and Transparency Act Subaward Reporting System for any subawards of $30,000 or more. Reports are due by the end of the month following the month in which the prime awardee awards any sub-award equal to or greater than $30,000. Context: FFATA reports were not submitted. Cause: The Department has not implemented the proper controls to ensure all required FFATA reports were submitted to the federal agency. Effect: Reporting requirements were not met for FFATA. Department of Health and Human Services did not receive timely reporting and did not receive all the information as requested from the Department. Questioned Costs: None Repeat Finding: This is a repeat and modified finding (prior year finding 2023-002; original finding 2021-001). Recommendation: We recommend that the Department ensure that adequate controls are in place to ensure that report due dates are met, and that reports are reviewed prior to submission to ensure that all required data is included. We further recommend that the reporting data be reviewed internally by someone other than the person preparing the reports. Current Status/Plan of Action: ASD staff from the Contracts and Procurement and Grant Management Bureau will work together to monitor any new activity that will need to be reported on the Federal Funding Accountability and Transparency Act (FFATA). ASD established and implemented a new contract/agreement system called Bonfire in January 2024. This system is an automated system that includes all the information that was entered on the Contract Request Form (CRF) that was previously used in the Contracts and Procurement Bureau and a copy of the proposed contract/agreement. Now, there is a specific field that can be used to track if any new contact/agreement must be reported on the FFATA. These contracts/agreements are reviewed and pre-approved in Bonfire by many HSD staff which include the Contract and Procurement Bureau Chief and the ASD Director/CFO. We can monitor the FFATA field as we review and provide information to the Grants Management Bureau Chief in real time. We can also run monthly reports to review and track this field to ensure that any new contracts/agreements were not missed to ensure timely FFATA reporting. ASD will ensure that a FFATA sub-award report is submitted by the of the month following the month in which HSD awards any subgrants greater than or equal to $30,000. Responsible Person: Grants Bureau Chief; Contracts and Procurement Bureau Chief

Condition: Required screening and valid license verification for 9 of 40 providers tested was not properly supported by the Department's records. Management has made progress on the prior year finding. A program was implemented to address the transfer of screening records from the legacy system into the current MMIS system and to provide monthly screenings of providers. However, due to the timing of the corrective actions, there are certain providers remaining in the system without the required screening documentation. Criteria: 42 CFR 455.410 states that the Department must require all enrolled providers to be screened. Per 42 CFR 455.412, the Department must verify the provider’s license has not expired and is valid. Context: A sample of 40 out of approximately 23,500 providers who received payment during the year were tested to determine whether a required screening was performed before the provider was enrolled. For 9 of 40 providers tested, the Department was not able to provide documentation that the required screening was performed. Management has made progress on the prior year finding. A program was implemented to address the transfer of screening records from the legacy system into the current MMIS system and to provide monthly screenings of providers. However, due to the timing of the corrective actions, there are certain providers remaining in the system without the required screening documentation. Cause: In certain instances, information from the legacy system was not transferred to the current MMIS. Additionally, certain providers who received single-case approvals were being excluded from the revalidation processes in place. Effect: There is no documentation to show that a provider screening and license verification were conducted to show compliance with Medicaid requirements. Questioned Cost: None. Repeat Finding: This is a repeat finding (prior year finding 2023-001; original finding 2022-003). Recommendation: We recommend that the Department review and update controls to ensure proper screening and license verification is performed for all providers and that documentation of the screening and verification is retained in all cases. Current Status/Plan of Action: The Corrective Action Plan (CAP) is currently in motion with the transition from our previous Legacy enrollment system to the new Benefit Management Services (BMS) System. BMS system will track license and certification expiration dates and will auto terminate accounts with expired date. The BMS system went live on November 8, 2024, and all accounts with an expired license and certification date have been auto terminated. The State and the new vendor will complete an audit on all accounts with a missing license and certification information to ensure correct action is taken for or against the account. The action will be completed by February 1, 2025. Responsible Person: Staff Manager, Policy and Provider Services Bureau, Medical Assistance Division

Condition: Required screening and valid license verification for 4 of 25 providers tested was not properly supported by the Department's records. Management has made progress on the prior year finding. A program was implemented to address the transfer of screening records from the legacy system into the current MMIS system and to provide monthly screenings of providers. However, due to the timing of the corrective actions, there are certain providers remaining in the system without the required screening documentation. Criteria: 42 CFR 455.410 states that the Department must require all enrolled providers to be screened. Per 42 CFR 455.412, the Department must verify the provider’s license has not expired and is valid. Context: A sample of 25 providers who received payment during the year were tested to determine whether a required screening was performed before the provider was enrolled. For 4 of 25 providers tested, the Department was not able to provide documentation that the required screening was performed. Cause: In certain instances, information from the legacy system was not transferred to the current MMIS. Additionally, certain providers who received single-case approvals were being excluded from the revalidation processes in place. Effect: There is no documentation to show that a provider screening and license verification were conducted to show compliance with Medicaid requirements. Questioned Cost: None. Repeat Finding: This is a repeat finding. Recommendation: We recommend that the Department review and update controls to ensure proper screening and license verification is performed for all providers and that documentation of the screening and verification is retained in all cases. Current Status/Plan of Action: MAD successfully provided screening and license verification for all providers, except for MCOR providers. MCOR requests are submitted by MCOs, therefore this process does not require providers to submit license or other credentials to enroll with New Mexico Medicaid. MAD recently changed MCOR approval term to two years from the date of approval, thus MCORs will be excluded from revalidation process. The program is currently working on a system memo to include MCORs to the monthly screening process. Responsible Person: MAD Compliance Officer and PPSB Bureau Chief.

Condition: Reports required to be submitted under the Federal Funding Accountability and Transparency Act (FFATA) were not submitted timely during the year ended June 30, 2023. Management has made progress on the prior year finding. Certain reports were submitted for fiscal year 2023 that were not submitted for the prior year. However, certain reports were not submitted timely during fiscal year 2023 due to the timing of the prior year finding. Criteria: Under the requirements of FFATA (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, the Department is required to submit reports to the Federal Funding Accountability and Transparency Act Subaward Reporting System for any subawards of $30,000 or more. Reports are due by the end of the month following the month in which the prime awardee awards any sub-award equal to or greater than $30,000. Context: FFATA reports were submitted for the programs, however, they were not submitted within their due dates. Cause: The Department has not implemented the proper controls to ensure all required FFATA reports are submitted to the federal agency timely. Effect: FFATA reports were submitted after their due dates. Questioned Costs: None Repeat Finding: This is a repeat and modified finding. Recommendation: We recommend that the Department ensure that adequate controls are in place to ensure that report due dates are met. Current Status/Plan of Action: ASD Staff from the Contracts and Procurement and Grants Management Bureau are working with Division Staff to gather the appropriate data to report and submit the Federal Funding Accountability and Transparency Act (FFATA). ASD did submit the FFATA report, however, we will work to ensure that this report is submitted timely. We will complete resolution of this finding during fiscal year 2024. Responsible Person: Grants Bureau Chief and Procurement Bureau Chief.

Condition/Context: The Department did not meet reporting requirements for Federal Funding Accountability and Transparency Act (FFATA) during the year ended June 30, 2022. No FFATA reporting was submitted during the year ended June 30, 2022. Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, the Department is required to submit reports to the Federal Funding Accountability and Transparency Act Subaward Reporting System for any subawards of $30,000 or more. Cause: The Department has not implemented the proper controls to ensure all required FFATA reports were submitted to the federal agency. Effect: Reporting requirements were not met for FFATA. Department of Health and Human Services did not receive timely reporting and did not receive all the information as requested from the Department. Repeat Finding: This is a repeat finding. Questioned Costs: None. Recommendation: We recommend that the Department ensure that adequate controls are in place to ensure that report due dates are met, and that reports are reviewed prior to submission to ensure that all required data is included. We further recommend that the reporting data be reviewed internally by someone other than the person preparing the reports. Current Status/Plan of Action: The Income Support Division (ISD) will ensure that the appropriate data is gathered and reported on all TANF funded contracts that meet the threshold as required by the Federal Funding Accountability and Transparency Act (FFATA). ISD will identify the individuals who are responsible for gathering the data and will develop a process to ensure complete and timely submission of this requirement. ISD will also ensure that there are adequate controls in place to review all required data and that the data is reviewed prior to submission and by someone other than the person preparing the report. ASD staff from the Compliance and Administration, Contracts and Procurement and Grants Management Bureau are to work with all Division staff to gather the appropriate data to report and submit the Federal Funding Accountability and Transparency Act (FFATA). ASD needed to fill the Grants Management and the Compliance and Administration Bureau Chiefs to begin working on this process to complete the FFATA report by 6/30/22, as indicated in the prior year planned corrective action, however filling these positions took longer than expected and were not filled till the last quarter of fiscal year 2022. The data will be gathered so HSD can complete and submit the FFATA report by the end of fiscal year 2023 (6/30/2023). Responsible Person: Work and Family Support Bureau Chief, Contracts and Procurement Bureau Chief, Grants Bureau Chief, and Compliance and Administration Bureau Chief.

Condition: Required screening and license verification for 10 of 25 providers tested was not properly supported by the Department's records. Criteria: 42 CFR 455.410 states that the State Medicaid agency must require all enrolled providers to be screened. Per 42 CFR 455.412, the agency must verify the provider?s license has not expired and is valid. Context: A sample of 25 out of approximately 25,000 providers who received payment during the year were tested to determine whether required screening was performed before the provider was enrolled. For one provider out of 25 providers tested for compliance, the Department was not able to provide evidence that the provider was properly screened before being enrolled. For one out of 25 providers tested, the Department was not able to provide evidence that the provider?s license was verified. For 8 of 25 providers tested, the Department was not able to provide documentation that the required screening was performed. Cause: Although the Department has policies and procedures in place to ensure the proper forms and documentation is maintained, the Department depends on third-party vendors to perform various provider screenings. The screenings performed by the third-party vendor were not kept by the Department. Effect: There is no documentation to show that a provider screening and license verification was conducted to show compliance with Medicaid requirements. Questioned Cost: Unknown Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Department review and update controls to ensure proper screening and license verification is performed for all providers and that documentation of the screening and verification is retained in all cases. Current Status/Plan of Action: MAD continues to work with its third-party vendor to determine whether the providers? documentation was maintained in the legacy system prior to the transfer of records into the current MMIS system. A corrective action will be developed once the root cause analysis is completed. The Program intends to complete corrective actions by the end of fiscal year 2023. Responsible Person: MAD Compliance Officer, Julie Lovato and PPSB Bureau Chief, Tashi Gyalkhar.

Condition/Context: The Department did not consistently meet reporting requirements for Federal Funding Accountability and Transparency Act (FFATA) during the year ended June 30, 2021. Criteria: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, the Department is required to submit reports to the Federal Funding Accountability and Transparency Act Subaward Reporting System for any subawards of $30,000 or more. Cause: The Department has not implemented the proper controls to ensure all required FFATA reports were submitted to the federal agency. Effect: Reporting requirements were not met for FFATA. Department of Health and Human Services did not receive timely reporting and did not receive all the information as requested from the Department. Repeat Finding: This is not a repeat finding. Questioned Costs: None. Recommendation: We recommend that the Department ensure that adequate controls are in place to ensure that report due dates are met, and that reports are reviewed prior to submission to ensure that all required data is included. We further recommend that the reporting data be reviewed internally by someone other than the person preparing the reports.

Condition/Context: The Department did not have controls in place for meeting earmarking requirements during the year ended June 30, 2021. Criteria: The average monthly number of families that include an adult or minor child head of household, or the spouse of the head of household, who has received assistance under any state program funded by federal TANF funds for more than 60 countable months (whether or not consecutive) may not exceed 20 percent of the average monthly number of all families to which the state provided assistance during the fiscal year or the immediately preceding fiscal year (but not both), as the state may elect. To make this determination for a fiscal year, the average monthly number of families with a head of household or spouse of a head of household who received assistance for more than 60 months would be divided by the average monthly number of families that received assistance in that fiscal year, or, if the state chooses, in the previous fiscal year (42 USC 608(a)(7)(C)(ii); 45 CFR sections 264.1(c) and (e)). Cause: The Department has not implemented the proper controls to ensure that the compliance requirement is met. Effect: The Department could have failed to meet earmarking requirements for the program. Repeat Finding: This is not a repeat finding. Questioned Costs: None. Recommendation: We recommend that the Department ensure that adequate controls are in place to ensure that earmarking requirements are monitored and met.

2020-002 Determination of Modified Adjusted Gross Income (Significant Deficiency in Internal Controls over Compliance) CFDA Number(s) Program Name/Title Federal Agency/ Pass-through Entity Award Number Award Year 93.777/ 93.778 Medical Assistance Program Department of Health and Human Services Multiple Awards 2020 Condition: The Department did not properly calculate total income for two cases, resulting in an incorrect eligibility determination for one of the two cases. Criteria: 42 CFR 435.603 states that the agency must determine financial eligibility for Medicaid-based on "household income", defined as the Modified Adjusted Gross Income (MAGI) of all individuals included in the household. MAGI-based income should be calculated using the same financial methodologies used to determine modified adjusted gross income as defined in section 36B(d)(2)(B) of the Internal Revenue Code. Context: Two cases out of 105 cases tested for compliance were found to have improperly excluded certain types of income from the calculation of MAGI-based income. In one of the two cases, this resulted in an incorrect eligibility determination. Cause: In both cases, income types had been incorrectly categorized by the caseworker. Effect: Certain households received more benefits than what was allowable by law. Questioned Cost: Total overpayment of $6,890.68 was made, calculated based on monthly capitation payments made from October 2018 through February 2021. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Department provide additional training to ensure all case workers are aware of income calculation guidelines. Current Status/Plan of Action: Both cases noted were caseworker data entry errors by the caseworker. In both cases, the coding of income was incorrect resulting in income being excluded from counting in the Medicaid household. Caseworker training regarding correct data entry is required to remedy this. For one of the two cases, the Medicaid Eligibility Chief will contact the applicable Income Support Division (ISD) county director copying the ISD Director's office to enter the RSDI income on the case correctly. As the client receives Medicare the expectation is that the client will transition to a Medicare Savings Program category. As the client had previously been covered under SSI, the Medical Assitance Division (MAD) will evaluate the client for the Disabled Adult Child (DAC) coverage which could provide the client with full Medicaid coverage. MAD will coordinate the transition in coverage with ISD along with notifying the ISD training unit about this case for evaluation of training. For the other case, MAD will contact the applicable ISD county director copying the ISD Director's office to make them aware of the error. The self employment income in this case was identified but was coded incorrectly. Per the case file the coding error has been corrected. In addition to the ISD county director and ISD Director's office, MAD will notify the ISD training unit about this case for evaluation of training. Corrective actions are anticipated to be completed by February 5, 2021. Responsible Person: Medicaid Eligibility Chief

2020-003 Provider Screening (Significant Deficiency in Internal Controls over Compliance) CFDA Number(s) Program Name/Title Federal Agency/ Pass-through Entity Award Number Award Year 93.777/ 93.778 Medical Assistance Program Department of Health and Human Services Multiple Awards 2020 Condition: Required screening and enrollment for one provider was not properly supported by the Department's records. Criteria: 42 CFR 455.410 states that the State Medicaid agency must require all enrolled providers to be screened. Context: For one provider out of 25 providers tested for compliance, the Department was not able to provide evidence that the provider was properly screened before being enrolled. Cause: Although the Department has policies and procedures in place to ensure the proper forms and documentation is maintained, the Department depends on third-party vendors to perform various provider screenings. The screenings performed by the third-party vendor were not kept by the Department. Effect: There is no documentation to show that a provider screening was conducted to show compliance with Medicaid requirements. Questioned Cost: Unknown Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Department review and update controls to ensure proper screening is done for all providers and that documentation of the screening is retained in all cases. Current Status/Plan of Action: Medical Assistance Division Policy & Provider Services Bureau has recommended the following draft language be incorporated as a Contract Amendment for the Fiscal Agent that is responsible for provider screening activity: The CONTRACTOR shall comply with all federal requirements related to provider screening and database checks, except that PROCURING AGENCY will be responsible for the facilitation of Fingerprint Based Criminal Background Checks (FCBC). The CONTRACTOR must be able to produce on request appropriate documentation to support having met each screening and enrollment requirement. In general, a copy of the screening results will be retained as part of the provider file and will be accessible via CONTRACTOR?s EDMS. When relying on Medicare screening, the CONTRACTOR shall document that PECOS was checked and the date. Screening results for moderate- and high-risk providers will be forwarded to the PROCURING AGENCY for review and approval prior to implementing system updates. Each month the CONTRACTOR will submit to PROCURING AGENCY a list of all providers screened during the previous month along with an attestation that the screening results were successfully captured in Intraviewer. The Intraviewer image of the screening results will be included on the monthly list. This report will be due by the 10th of each month for the previous month?s screenings. These actions will be taken by June 30, 2021. Responsible Person: Medical Assistance Division Policy & Provider Services Bureau

2020-004 Reporting (Significant Deficiency in Internal Controls over Compliance, Non Compliance) CFDA Number(s) Program Name/Title Federal Agency/ Pass-through Entity Award Number Award Year 10.551/ 10.561 Supplemental Nutrition Assistance Program U.S. Department of Agriculture Multiple Awards 2020 Condition: The Department did not consistently meet reporting requirements for Emergency Allotment and Pandemic Electronic Benefits Transfer Program (P-EBT) distributions during the year ended June 30, 2020. Criteria: 7 CFR 274.4 requires the Department to review and submit reports to the Food and Nutrition Department (FNS). Per the Emergency Allotment waiver and P-EBT State Plan, the Department is required to submit FNS-292B reports bi-weekly, due within five business days following the bi-weekly period. The P-EBT State Plan also requires the Department to submit distribution data to FNS on a monthly basis, including the number of children receiving benefits, separately identifying those in SNAP and non-SNAP households. Context: The Department did not properly follow the waiver and P-EBT State Plan requirements that indicated that the FNS-292B reports were to be submitted bi-weekly. The FNS-292B was submitted on a monthly basis rather than bi-weekly. The special reports for the months of April 2020 through June 2020 to FNS for P-EBT were not submitted until August 4, 2020, between 40 and 160 days late. We also noted that the P-EBT special reports submitted to FNS for April through June 2020 did not separately identify the number of children receiving benefits between SNAP and non-SNAP households. In discussions with the Department, they did not realize there was missing information as the controls over P-EBT reporting had not been implemented. Cause: The Department indicated that these were new funds received during the year and they had not properly assigned the correct personnel to prepare the reports timely. Due to the emergency timing of the funding, the Department did not have time to establish and implement proper controls. Effect: Reporting requirements were not met for P-EBT and EA distributions. FNS did not receive timely reporting and did not receive all the information as requested from the Department. FNS may reject the reports or require the Department to provide the missing information. Questioned Cost: None Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Department ensure that adequate controls are in place to ensure that report due dates are met, and that reports are reviewed prior to submission to ensure that all required data is included. We further recommend that the reporting data be reviewed internally by someone other than the person preparing the reports. Current Status/Plan of Action: The State of New Mexico Human Services Department Income Support Division (ISD) applies for the Emergency Allotments (EA) on a monthly basis as allowed by the Food and Nutrition Services (FNS). The SNAP Program Manager through the Policy and Program Development Bureau (PPDB) collects the data and the information to apply for and submits the EA request to FNS. FNS reviews and notifies ISD of the decision. Upon approval of the EA, PPDB SNAP Program manager communicates to the Economist at Program Administration Bureau (PAB) and provides the reporting requirements to the Economist to report on the FNS-292 report. ISD PPDB SNAP Program Manager submitted a P-EBT State Plan to distribute the benefit to the eligible students This plan is reviewed by FNS and they approve the disbursement of the monies. Upon approval of the P-EBT plan and issuance of benefits, PPDB, the SNAP Program Manager communicates with the PAB Economist the approval and provides the reporting requirements to report on the FNS-292 report. This action will be taken upon approval and the timeframes to submit the necessary reporting requirements will be taken to ensure that the EA?s and the P-EBT reporting requirements are being fulfilled as required by the FNS. Corrective actions will be taken by June 30, 2021. Responsible Person: SNAP Program Manager, PAB Economist

2019-002 Eligibility (Significant Deficiency) See Schedule of Findings and Questioned Costs for table Condition: The Department did not appropriately verify income sources for one participant, resulting in an incorrect benefit amount calculation in ASPEN, the Department?s eligibility and benefit system. Context: Out of 65 items tested for compliance, one did not have the appropriate income verifications performed. Pay stubs for a contract employee were used rather than obtaining the current contract and averaging the income over a 12-month period. Cause: The Department did not adhere to the NMAC regarding income verification for a contract employee, which resulted in incorrect income used in the eligibility system for SNAP benefit eligibility. Effect: The participant received benefits more than what is allowed by law. Total amount of overpayment was $715. Questioned Cost: Unknown Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Department provide training to ensure all case workers are aware of income verification guidelines.