Legislative analysts: Medicaid costs keep rising as access and data shrink under 'Turquoise Care'

Dr. Allegra Hernandez, a health and human services analyst for the Legislative Finance Committee, told members the LFC’s latest Medicaid accountability review found three main problems: sharply rising costs, mixed quality outcomes despite rate investments, and reduced data access after the state’s managed‑care transition to "Turquoise Care." Hernandez said total Turquoise Care expenditures were $9.9 billion in FY23, $10.96 billion in FY25 and projected to reach $11.4 billion in FY26.

The LFC highlighted particular cost drivers: increases in per‑member‑per‑month rates for long‑term services and behavioral health (behavioral health PMPM rose roughly 97 percent since FY21), and new state investments that raised capitation floors for managed‑care organizations. Hernandez said LFC compared top behavioral‑health billing codes to Medicare and to neighboring states and found large differences in some codes.

But higher payments have not clearly improved timely follow‑up for behavioral‑health emergency visits. Hernandez said the HEDIS behavioral‑health follow‑up within 30 days declined about 6 percentage points since 2022, even after the legislature’s FY24–FY26 rate increases.

The LFC also described access problems revealed in an LFC “secret‑shopper” call survey: an average patient must make six to seven calls to book a primary‑care appointment and about 14 calls to book a behavioral‑health appointment; provider directories are frequently out of date or list inappropriate providers; many numbers did not connect and some practices no longer accepted new patients. "Provider directories are woefully out of date and inadequate," the presenter said.

Legislators asked whether higher Medicaid rates were reaching frontline clinicians. Dana Flannery, Medicaid director for the Health Care Authority, said Turquoise Care launched in July 2024 and HCA has added more than 9,000 providers to the Medicaid registry since launch. She described rate increases and state‑directed payments as intended to expand services and said changes take time to flow through contracts and provider payments. "When you raise the rates from 100% to 150% of Medicare, that changes the total," Flannery said.

Members pressed both agencies on lost utilization detail. LFC staff said that transitions from prior Centennial Care contracts to Centennial Care 2 and then Turquoise Care resulted in less comparable utilization and network adequacy reporting, constraining analysis of whether a few "super‑users" drive cost increases or whether utilization rose broadly. LFC said it is building dashboards and pursuing data access arrangements, with a target of early 2026 for more comparable inpatient/outpatient reporting.

The report also flagged administration and fraud‑recovery problems. LFC noted New Mexico ranks near the bottom nationally for Medicaid fraud recovery and cited the need for statutory change to improve recoveries. The LFC and HCA described MISER, the new Medicaid IT system, as a major upcoming IT cost (LFC reported an approximate MISER budget of about $832 million, with most paid by federal match and an estimated general‑fund share reported in the briefing).

What’s next: LFC and HCA staff said they will continue work on dashboards and data‑sharing and can provide members with targeted 1–2‑page financial impact summaries for upcoming federal rule changes and grant NOFOs. Several legislators urged securing access to all‑payer claims and other person‑level datasets so the legislature can measure who is using services and how funds flow through MCOs to providers.

The committee did not take formal action on the report at the hearing; presenters offered follow‑up meetings and materials.