Over 100 Behavioral Treatment Centers, Sober Living Homes Accused of Medicaid Fraud

Arizona State officials say dozens of behavioral health and sober living homes have perpetrated a years-long Medicaid fraud scheme.

Gov. Katie Hobbs, Attorney General Kris Mayes, Arizona Health Care Cost Containment System Director Carmen Heredia, Salt River Pima-Maricopa Indian Community President Martin Harvier, and Assistant U.S. Attorney Andy Stone announced the findings Tuesday morning in Phoenix.

Hobbs said the alleged crimes amount to “hundreds of millions of dollars.”

Patients primarily from reservations, she said, were enticed with food and shelter only to be encouraged into continuing their addictions while the facilities billed Medicaid for care that never happened.

“For years, these providers have allegedly defrauded the state of millions of dollars while creating a large-scale humanitarian crisis that disproportionately affects Arizona’s tribal communities,” Hobbs said Monday. “People have had to escape out of windows and jump over fences in the middle of the night just to access a phone to reach the outside world.”

Hobbs said payments to these facilities saw state payments stopped Monday and that she directed AHCCCS to implement additional safeguards.

The alleged fraud took place largely on tribal land to deceive state officials.

“Generally, they began with fraudulent treatment facilities recruiting Native Americans, typically those residing on a reservation or part of the urban homeless population,” Mayes said. “These vulnerable individuals were incentivized to participate in ‘treatment’ at an outpatient clinic with offers of things like free food, cash incentives or free rent.”

Mayes said the facilities would convince AHCCCS that the patient was eligible for benefits, even if they weren’t via a tribal health program.

Officials expect the charges to result in facility closures.

The Arizona Council of Human Service Providers, a provider association representing more than 125 of the type of facilities in question, said in a statement that they’d work with law enforcement and state officials.

“As an association, we are also acutely aware of the impact that this may have on clients who rely on these services for their mental health needs,” the council said. “We understand the importance of continuity of care and are committed to working with our members, as well as government agencies and MCOs, to ensure that all affected clients are able to receive the care they need during this transition.”

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The article was published by The Center Square and is reproduced with permission.