Alamogordo mental health facility cleared of fraud

Created: 01/24/2014 10:22 PM
By: Erica Zucco, KOB Eyewitness News 4

The Counseling Center served Alamogordo for 45 years. In June, they and 14 other New Mexico clinics were accused of fraud, overbilling and other business practices. They lost all state and Medicaid income, putting the Counseling Center out of business.

Six months after the original audit was released, the state cleared the center of fraud.

"I knew that we had done nothing wrong. I spent a career being honest, being above the board, making sure my staff understood that we didn't even dally into gray areas, period. The standing rule has always been that we always give the client what they need-- no more and no less," Counseling Center Jim Kerlin said.

Cleared or not, the damage is done. The building the counseling center once worked from now houses "La Frontera," a clinic run by a company from Arizona. Kerlin would have to start from scratch, and to do that, he would need back pay from the state.

The Human Services Department says that "while they werecleared of fraud in overbilling, its still true that they overbilled by hundreds of thousands of dollars that must be repaid to the taxpayers of New Mexico."

So while they say Kerlin didn't commit fraud, they still believe the center overbilled and owes the state money.

Kerlin plans to dispute very claim. 

"What we hope is we will have our day to demonstrate that we're innocent of any overbilling," Kerlin said.

The investigation into questionable business practices is still occurring – the US Attorney, the FBI, and the TRD Tax Fraud Division are all still investigating potential fraud with this agency and their business practices.

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