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New Mexico Corrections Pays $1.4 Million to Settle Whistleblower Complaint Alleging Retaliation for Exposing Deficiencies in Corizon Medical Care

An October 15, 2020 report from the Santa Fe New Mexican revealed that in March 2020, the New Mexico Corrections Department (NMCD) paid $1.4 million to settle a whistleblower complaint that exposed deficiencies of private health-care provider Corizon Correctional Health Care (Corizon) and the NMCD’s failure to audit Corizon and to hold the company accountable.

Dr. Bianca McDermott is a clinical psychologist who was employed as the bureau chief for behavioral health at the NMCD. She filed her complaint in March 2017 under the Whistleblower Protection Act, NMSA 1978, § 10 (WPA) naming NMCD as the sole defendant.

According to the complaint, as early as 2009 McDermott began alerting NMCD officials to problems with its contracted health-care provider — Corizon (then known as CMS) — following an unusually high number of prisoner deaths. The contract between the NMCD and Corizon required the NMCD to audit Corizon’s provision of health care and mental health care to prisoners to verify that all necessary and appropriate care was being provided. By May 2013, it was estimated that NMCD had paid over $200 million to Corizon ($3.125 million per month), yet McDermott was personally aware that not all mental health care required under the contract was being provided to the prisoners, meaning Corizon was receiving money it was not earning.

McDermott reported her concerns to her supervisors. As a result of her own investigation, she discovered the NMCD was not auditing Corizon. She subsequently filed a Qui tam action, prompting the Attorney General of New Mexico to undertake an investigation.

For her efforts, the NMCD accused her of acting with discriminatory intent in making a hiring decision, of HIPAA violations, and of insubordination. Although the NMCD did not follow protocol during the investigation of the allegations against McDermott or even report the results of a hearing through the New Mexico State Personnel Office, she was terminated from her employment. She filed her WPA complaint, alleging the reasons proffered by the NMCD for her termination were pretextual and the actual reason was retaliation for her various whistleblowing activities.

In 2019, District Judge Raymond Z. Ortiz ruled that not only had the NMCD retaliated against McDermott for reporting the problem, but the NMCD had also willfully and intentionally concealed evidence in the case, including its own 2014 report that corroborated her complaints.

The report said, “It is a well-studied conclusion that perception of detection is the best and most cost-effective way to thwart wrongdoing of all kinds, including fraud and abuse. In this case, the perception of detection was zero, and Corizon personnel absolutely knew they were free to do anything without fear of consequences.” The report went on to state that not auditing Corizon was a serious failure of the NMCD’s duty to ensure that prisoners were receiving proper health care.

The NMCD spent three years and paid a private attorney about $270,000 fighting the WPA complaint before agreeing to the settlement. Judge Ortiz said the NMCD’s behavior in this case was among the worst he had seen in his 30-plus-year career.

McDermott said, “My case is a perfect example of why whistleblowers need to be protected. But the biggest tragedy in my eyes is that nothing really has changed. [NMCD] just keeps changing vendors. All of the private prison care vendors are for-profit companies. All of them have lost contracts and been kicked out of states for poor services. At a time when we are talking so much about systemic racism and social justice, it’s ironic that this particular [prison] population [overwhelmingly Hispanic and Indigenous] is being ignored.”

McDermott was represented by attorney Samuel C. Wolf of Jones, Snead, Wertheim & Clifford in Santa Fe. See: McDermott v. New Mexico Corrections Department, Case No. D-101-cv-2017-00871, U.S.D.C. (D.N.M.). 


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Related legal case

McDermott v. New Mexico Corrections Department