Judge declines to dismiss lawsuit against New Mexico Medical Insurance Pool

A lawsuit that seeks to shed more light on a health coverage expansion program that would serve undocumented immigrants and other New Mexico residents who are otherwise considered uninsurable survived a legal challenge Tuesday.

Second Judicial District Judge Daniel Ramczyk denied a motion to dismiss the lawsuit, which alleges the board of the New Mexico Medical Insurance Pool violated the state's Open Meetings Act and Inspection of Public Records Act.

The suit was filed on behalf of businessman Duke Rodriguez, a former Cabinet secretary who is considering seeking the Republican nomination for governor, and Kristina Caffrey, his chief legal officer at Ultra Health, the state’s largest cannabis operation.

At issue is whether the insurance pool, which the Legislature established in 1987 to provide health coverage for patients with particularly complex and expensive medical needs, is a public body or a nonprofit.

In a motion to dismiss the lawsuit, attorney Carlos Padilla with the Albuquerque-based law firm Cuddy & McCarthy argued the insurance pool is a "nonprofit organization wholly independent of state government."

"No Court has ever held that the NMMIP is subject to either the OMA or the IPRA and there exists no basis to do so now," he wrote. "Indeed, while the NMMIP is committed to transparency, its general voluntary compliance with New Mexico's 'sunshine laws' does not give rise to an actionable obligation. There is a critical and fundamental difference between a highly regulated nonprofit and an arm of the New Mexico state government."

Padilla did not return a message seeking comment.

The case involves a controversial topic: providing health insurance to undocumented immigrants under a new coverage expansion program administered by the medical insurance pool, as well as a $1.75 million contract.

The coverage expansion program was scheduled to launch in July but was derailed in April amid questions about the organization's status.

The New Mexico Health Care Authority handed the insurance pool a no-bid $1.75 million "governmental services agreement" for the "timely and efficient implementation" of the program in February.

The state initially defended the agreement, saying the government-to-government contract was "a permissible contracting and procurement vehicle."

But amid lingering questions, the state abruptly terminated the deal, saying its decision came after learning the insurance pool is neither a governmental nor quasi-governmental agency.

Jacob Candelaria, a former state senator who is representing Rodriguez and Caffrey in the case, called the state agency's reversal "a classic attempt at a movida."

"They got their hands caught in the cookie jar," he said.

The insurance pool's acting executive director is former state Rep. Deborah Armstrong, an Albuquerque Democrat who is a friend and former business partner of Gov. Michelle Lujan Grisham. Armstrong is also the owner of a firm that oversees all of the insurance pool's contractors, who provide the day-to-day work, under a separate executive services contract.

In an interview in April, Armstrong said the Health Care Authority apparently didn't understand the medical insurance pool isn't a government entity.

"We’re a unique organization," she said. "There isn’t anything else quite like it or at all like it, being legislatively created, nonprofit and without hardly anything that would tie us directly to the government. But certainly, they have a governmental interest because they created it legislatively."

Candelaria was skeptical, noting the "governmental services agreement" is between two units of government.

"The lawyers of the pool ... admit that the pool is at the very minimum a quasi-governmental agency so they can enter into this kind of agreement for procurement while at the same time going to court and saying, 'We're not a public body. You can't force IPRA and the OMA,' ” he said.

"So what does the Health Care Authority do?" he added. "The Health Care Authority then turns around and cancels the contract, saying, 'Oh, it looks like you're not actually a public agency.'

"Give me a break," Candelaria said. "Really? These are incredibly highly paid state bureaucrats dealing with public procurement in the millions of dollars. ... So that's what's at stake here. Ultimately, it's money."

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