News

2018-10-23
Office of the State Auditor to courts: ‘Please let us do our job’

Office of the State Auditor to courts: ‘Please let us do our job’

Auditors seek transparency for public agency that provides health insurance to sick New Mexicans

Santa Fe, NM –State Auditor Wayne Johnson is asking a judge to let his office do its job and audit a government entity that provides health coverage to vulnerable New Mexicans denied coverage by big insurance companies.

Johnson’s office filed a motion for summary judgment asking a judge to forego a trial in the lawsuit filed by the New Mexico Medical Insurance Pool (NMMIP), which is trying to hide its finances and operations from public view. The facts in this case are undisputed, and attorneys with the Auditor’s office say the judge has enough information to make a decision on the law without a prolonged legal process.

The court filing says, “NMMIP is about as far removed as one can get from a private non-profit group of charitably-minded insurance companies.” It goes on to say, “This Court should not permit NMMIP to continue to hide behind a strained interpretation of straightforward statutory language in order to avoid the transparency and accountability to which the public and policymakers are entitled.”

The previous auditor, Tim Keller, started the process of auditing the NMMIP and Johnson continues this process to bring the state entity into compliance with state law. Mysteriously, in June this year, the NMMIP changed its previous position acknowledging its status as a state agency and decided that they are a private organization and refused to cooperate with a state audit. The NMMIP then sued the State Auditor’s office to block any efforts by this or any future auditor from auditing the NMMIP’s operation.

“The insurance pool provides a valuable service to New Mexicans refused coverage by big insurance companies,” says Johnson. “This insurance pool is a basic safety net for people with cancer and other serious illnesses. The insurance industry can’t make a profit insuring people with serious illnesses, so state legislators created a public program so people don’t languish without coverage when denied by these insurance companies. The notion that this is a charity, like the Make-A-Wish Foundation or the United Way, is just silly.”  

OSA attorneys made the following arguments that the NMMIP is a state entity:

  • NMMIP falls clearly within the statutory definition of an “agency” as defined in the Audit Act
  • NMMIP managers asserted that the NMMIP “provides an essential governmental function to its members” and is exempt from federal taxes under Section 115 of the Internal Revenue Code
  • State law provides that the Superintendent of Insurance serves as the NMMIP Board chairman and also appoints six of the ten board members, giving a public official effective control over the Board
  • The Board’s plan of operation must be approved by the Superintendent of Insurance
  • NMMIP was created as a governmental entity to address a need that could not be met by the private sector: to provide health insurance coverage to otherwise uninsurable New Mexicans
  • NMMIP is specifically required to comply with the Per Diem and Mileage Act and the Procurement Code. Private entities are not required to comply with these acts, which regulate operations for state entities and the expenditure of public funds
  • NMMIP complies with the Open Meetings Act and the Inspection of Public Records Act
  • In early 2017, officials with State Records and Archives “confirmed…that NMMIP is indeed a state agency eligible for archiving records with the State Records Center.”
  • NMMIP’s attorney, on March 20, 2017, authored a legal memo to the NMMIP saying that, “Under the Public Records Act, the NMMIP qualifies as a state agency.”

“The Internal Revenue Code, Per Diem and Mileage Act, Procurement Code, Open Meetings Act, Inspection of Public Records Act, and the Public Records Act. These are state and federal laws that apply specifically to government entities, and the NMMIP follows them all,” says Johnson. The only Act they seem determined to dodge is the Audit Act. That begs the question, ‘What are they hiding?’”

The Motion for Summary judgement can be found here: https://www.saonm.org/media/uploads/Motion_for_Summary_Judgment.pdf