Health Care Authority warns of large Medicaid churn from HR1 and outlines behavioral-health, rural funding and provider-growth efforts

Carrie Armijo, secretary of the Health Care Authority, and acting Medicaid director Dr. Alana Dances briefed the Legislative Finance Committee on Medicaid coverage, behavioral-health reform and rural-health investments and cautioned that statutory changes will produce near-term churn in enrollment.

LFC deputy director John Courtney opened the session by highlighting New Mexico's high coverage levels (roughly 40% of the population enrolled in Medicaid) and flagged concerning overdose trends: CDC data showed overdose deaths in New Mexico rose 22% while the national rate fell 14% over the same period. Courtney noted the legislature had appropriated more than $141.7 million for behavioral-health reform under the Behavioral Health Reform and Investment Act (SB3).

HCA's updates: Dr. Dances displayed a new agency dashboard showing more than 14,000 net new providers since Turquoise Care began in July 2024, with notable growth among physicians (+3,812) and a 47% increase in behavioral-health provider enrollment. HCA said investments have increased utilization for services where rates rose, creating both more providers and more visits per member.

Rural-fund obligations and procurement: Secretary Armijo described the Rural Health Care Delivery Fund (about $196M awarded since 2023) and a separate $211M federal Rural Health Transformation Program the agency must obligate by the end of September. HCA has issued two RFPs (administrative-services organization and a Rural Health Innovation & Sustainability Center) and plans six more procurements to get money under contract quickly; the agency warned the timeline is aggressive and federal oversight of the cooperative agreement is strict.

HR1 and enrollment churn: HCA warned lawmakers that House Resolution 1 will change Medicaid rules beginning Jan. 1 (work or activity requirements for many adults, more frequent eligibility renewals, reduced retroactive coverage from 90 days to one month). The agency estimated roughly 89,000 adults could be affected by the work requirements and expects a substantial month-to-month turnover due to more frequent verification. HCA also expects approximately 3,000 noncitizen beneficiaries (refugees/asylees) to be disenrolled in October; officials said updated federal guidance and changes in beneficiaries' immigration status have already reduced earlier estimates of those losses.

Behavioral health implementation and accountability: Members pressed HCA on regional behavioral-health plan delays and the risk that appropriations could expire before contracts are in place. HCA said it issued "early access" regional funding to begin priority projects, expects a governance structure for the federal rural program that includes legislative participation, and will provide technical assistance to regional accountable entities. Officials emphasized that while regional plans may list advocacy or broad needs, appropriations will be tied to fundable services that expand capacity (mobile crisis, ACT teams, prenatal substance-use disorder treatment).

Maternal health and neonatal abstinence: Lawmakers raised slipping rankings for maternal mortality and neonatal abstinence syndrome (NAS). HCA said substance use disorder is a leading contributor to maternal mortality, noted many maternal deaths occur postpartum (often around 45 days) and described policy shifts: CARA-related plan-of-safe-care requirements become mandatory July 1 and must include substance-use treatment and early-intervention services in discharge planning.

What's next: Committee members asked HCA to provide detailed charts of FY26/FY27 rate increases by service code, timelines for rural-transformation procurements, and documentation on measures HCA will use to track behavioral-health reform progress. The agency agreed to produce those materials and to share a schedule of upcoming procurements and reporting milestones.