New Mexico’s Medicaid Malfeasance

As seen in the post from Gov. Lujan Grisham, she blames President Trump and Congress (naturally) for cuts to Medicaid and rising premiums. Instead, the Gov. should look in the mirror and at a bloated and deeply problematic Medicaid program administered by the State. Don’t believe us? Check out the latest Medicaid Accountability Report from the Legislative Finance Committee and the analysis below:

The following is a list of the Ten findings from the report:

1. Medicaid enrollment is down, but program spending is up

New Mexico serves 31,000 fewer Medicaid enrollees than in 2016, yet total spending has nearly doubled to $11 billion. Outcomes on quality, access, and network adequacy are flat or worse.

2. Billions in provider rate increases haven’t improved appointment availability

The state has invested at least $2.2 billion in provider rate adjustments over the last five years—including more than $1 billion for hospitals. The largest increases are scheduled for FY25, but secret shopper surveys show no improvement in appointment availability.

3. NM Medicaid rates are far above Medicare’s and those of neighboring states

New Mexico’s Medicaid rates are consistently higher than Medicare and border states—sometimes dramatically. For behavioral health, one code is reimbursed at $242/hour for family psychotherapy—50% above Medicare and up to 325% higher than Arizona, Colorado, Oklahoma, or Utah. Physical health codes also run 7% to 186% higher than neighboring states, with outpatient visits reimbursed at nearly double Arizona and Utah rates.

4. Costs are rising, but health outcomes remain stagnant

Since FY21, behavioral health per-member costs jumped 97% and long-term services rose 49%, yet outcomes remain stagnant.

5. Cost of the Developmental Disabilities Waiver’s is headed toward $1B

The DD waiver costs per client ran up to 39% higher than projections in FY24. Total spending hit $773M vs. $733M projected, and growth trends show it is on track to become a billion-dollar program within the next budget cycles. A “super allocation” to clear waiting lists risks accelerating costs even faster.

6. Mixed Health Outcomes Despite Spending

• Only 31% of behavioral health ER patients receive a 7-day follow-up, down 16% since 2022.
• Diabetes management has improved somewhat, with poor control falling from 52% to 44%.

7. The Medicaid IT Project is bloated, delayed — and risky

The Medicaid Management Information System replacement has swelled from $221M to $832M and from 8 years to 14 years in duration, making it the largest single-agency IT project in state history. By completion, it could approach $1 billion—and still may not be compliant with future federal reporting requirements, putting both funding and accountability at risk.

8. The behavioral health workforce is shrinking

Between 2022 and 2024, New Mexico lost 1,082 prescribing and 427 non-prescribing behavioral health providers. Most counties saw declines.

9. Secret Shoppers find care is still hard to access

In 2025, patients needed 6–7 calls for a primary care appointment and 14 calls for behavioral health. Average waits were 21 days for primary care and 11 days for behavioral health—both longer than required standards.

10. NM’s Fraud recoveries are among the nation’s worst

New Mexico’s Medicaid Fraud Control Unit recovered just 2 cents per dollar spent, ranking second-to-last nationally. In FY24, 353 investigations yielded only five indictments and two convictions.

Thanks to former New Mexico Health Secretary Duke Rodriguez for his analysis.