In some cases, patients were plied with alcohol and narcotics while being fraudulently billed for treatment they weren’t receiving. This is resulting in many becoming displaced within the city or losing their lives. Bills were introduced to address the sober living and crack down on their fraudulent practices. FOX 10 obtained records from AHCCCS that show Harbor Health Integrated was paid nearly $20,859,694 in total reimbursements for treatment services.
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Patients continued to die even after Arizona officials in May 2023 announced a sweeping investigation of hundreds of facilities. By then, the fraud was so widespread that officials spent the next year seeking to halt Medicaid reimbursements to behavioral health businesses accused of wrongdoing. Arizona suspended scores of behavioral health providers as authorities investigated them for defrauding the American Indian Health Plan.
I cover housing and transportation, including the companies working in those fields and the regulators overseeing them. I cover health and the environment and the agencies that govern them, including the Environmental Protection Agency. In May, the cap on reimbursement rates went into effect, though it’s not clear what prompted AHCCCS to address vulnerabilities that staff had identified more than a year earlier. “He said, ‘Since they have an alcohol problem, we let them drink a little bit to calm down,’” Anders recalled.
- The state’s swift response left patients homeless, ProPublica and the Arizona Center for Investigative Reporting found.
- Johnwick Nathan was sentenced to four years of probation for illegal control of an enterprise and solicitation to commit money laundering.
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In January, we received a tip from an alleged victim of an unlicensed sober living home. In February, FOX 10 launched its three-part investigative series called „Preying on a People“ revealing how the sober living scheme works, speaking with the FBI, alleged victims, advocates and impacted residents. PHOENIX – Imagine an elaborate scheme targeting Native Americans fighting addictions, promising to get them on a path to sobriety, but instead enticing them with alcohol, drugs and even money. Then, locking vulnerable people up in random homes while defrauding Arizona’s Medicaid system, Arizona Health Care Cost Containment System (AHCCCS). The scandal took off at the start of the COVID-19 pandemic as suspects fraudulently billed for services rarely provided to vulnerable people needing addiction treatment. Several cities and towns across Arizona backed the legislation, citing the urgent need for reform.
- Under the law, DHS will now have enhanced powers to license, oversee, inspect, and penalize sober living homes that fail to comply with state and local regulations.
- The grants are meant to alleviate the harm inflicted upon hundreds of Native Americans who were targeted by Phoenix-area scammers who fraudulently billed AHCCCS, the state’s Medicaid system.
- The team responsible for setting rates had determined that amount was in line with industry standards.
- Adams, who was present for the review, questioned how the provider could collect Medicaid payments without a license that’s required of every health care provider.
- „The ten houses, ten, eleven houses I’ve been to, it was just … the house managers didn’t care,“ Moody said.
Court documents say one alleged broker told investigators he made $40,000 from one outpatient facility in two months for the patients he brought in. These victims are oftentimes from New Mexico, Montana, Alaska, South Dakota, Oklahoma, North Dakota, Florida and Nevada. It’s now a less lucrative option, but as Holyan says, legitimate services never seemed to be provided. „It was pretty easy just to get them in. It was a quick call. Uber would pick us up and drop us off directly at the house.“ Holyan was usually on foot, staying close to light rail stations to find targets.
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The Office of Inspector General undertook a manual review of behavioral health residential facilities’ licenses, Adams said, and Snyder began meeting that spring with AHCCCS’ top managers to identify weaknesses that fraudsters could exploit. In a brief statement, Daniel Scarpinato, a Ducey spokesperson, did not comment on missed opportunities to detect and stop the fraud under his administration. But he said that the former governor went to great lengths to ensure a smooth transition for Hobbs and that members of Ducey’s staff continued to make themselves available to her administration after he left office.
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However, as sober living homes shut down, people are left on the streets. Heredia then briefly blocked another attempt by AHCCCS’s billing experts to cap reimbursement rates, this time at $158, records obtained by AZCIR and ProPublica sober living fraud show. Public responses to the proposed change, including from long-standing community health organization Native American Connections, said capping the existing rate would help curtail massive amounts of fraud and the exploitation of Native Americans.
ProPublica and AZCIR found that officials’ botched response to the crisis resulted in Native Americans losing access to behavioral health services that were being provided to them. In a letter sent the day after Hustito died, officials accused Beyond4Wallz of billing excessively for services that could not have been provided to patients. Magee, the Beyond4Wallz owner, said she tried to address the state’s allegations and stay open, but eventually closed. Despite the timing, there’s no indication the letter was spurred by Hustito’s death.
From 2019 to 2023, AHCCCS was writing huge checks to scammers who were effectively buying and selling patients in need of drug and alcohol treatment, evidence shows. The scammers used taxpayer money to purchase expensive homes, jewelry, clothing and cars for themselves and disproportionately targeted Indigenous people. Arizona’s so-called sober living scandal was announced at a multi-agency news conference on May 16, 2023. The issue quickly gained national attention and by early 2024, the estimated cost of the fraud was up to $2.5 billion agency leaders said. Snyder did not mention the fraudulent facilities several days later when she went before a legislative committee to discuss a recent audit shortly before stepping down as AHCCCS director. The audit, conducted every 10 years, is used by legislators to evaluate the future of state agencies.
He took their information to help get them signed up for AHCCCS insurance. Investigator Justin Lum wants to know how people like Monica are recruited. „Everybody we would interview, they would say, ‘They asked me for my information, signed me up for AHCCCS and food stamps,’“ Gutierrez recalled.
“Although we can never fully make up for the harm this fraud caused, we can make sure justice is served — and that Native Arizonans struggling with addiction have a recovery option they can rely on,” Mayes said in a Thursday news release. Sen. Theresa Hatathlie, a Democrat from Coalmine Mesa on the Navajo Nation, was also critical of the legislation. She voted against it, noting that a bill she sponsored last session would have required more accountability not only from the health department related to its oversight of the homes but also from the Arizona Corporation Commission, where the businesses must be registered. Support Arizona’s only nonprofit newsroom dedicated to statewide investigative journalism. No licensing through Arizona’s Department of Health Services means no oversight and city officials say that leads to unsafe conditions for people in recovery while bringing blight and crime into neighborhoods. It learned a sober living home could profit $180,000 annually from one person on the American Indian Health Plan.
PHOENIX (AZFamily) — A woman has been sentenced for her role in stealing millions of dollars from the Arizona Health Care Cost Containment System (AHCCCS). Arizona Attorney General Kris Mayes announced that 37-year-old Arielle Dix was sentenced to three and a half years in prison for the scheme. Kenneth Chatman further maintained control over patients who attended Reflections and Journey by threats and confiscating their belongings, car keys, telephones, medications, and food stamps, in order to maintain the ability to continue billing their Insurance Plans. According to the state, services were never rendered to at least 10 AHCCCS members, and at the time, AIHP was under far less scrutiny. He authored a self-improvement book to build success, but was caught pushing a behavioral health scam during the pandemic.
Hobbs and Mayes hold a news conference about the scam and say it has bilked “hundreds of millions” from Arizona taxpayers; 102 providers are suspended from AHCCCS. Arizona Attorney General Mark Brnovich indicts 13 people plus various entities on fraud, conspiracy and other related charges that are later connected to the American Indian Health Program. During the COVID-19 pandemic, AHCCCS pauses several administrative requirements, including provider registration fees and onsite visits, that could allow nefarious activity to continue undetected.
Federal officials say it’s the largest case of Medicaid fraud to target a single demographic population in recent U.S. history. Tiffany Copp is the assistant director of community development for the city of Surprise. „Practically they were holding me against my will because they were bribing me with money, telling me that they would give me alcohol as long as they didn’t see it,“ Oldmanchief said to Long. Leigha Oldmanchief, of Blackfeet Nation in Montana, says she was staying at a sober living home in Tucson. Long spoke with someone who claimed to be staying at a sober living home. „The ten houses, ten, eleven houses I’ve been to, it was just … the house managers didn’t care,“ Moody said.
At AHCCCS, staff received news in March of a death inside a residential treatment program, Adams said. In an interview, she could not recall details of the death or the facility where it occurred. But she said a health and safety committee reviewing the death discovered the facility did not have a health department license, a key detail that would repeatedly appear in later investigations. Meanwhile, word spread on social media that white vans were appearing on reservations and people with addiction were disappearing, said state Sen. Theresa Hatathlie, a Democrat from Coalmine Mesa on the Navajo Nation. Hatathlie said the behavioral health facilities’ tactics of sending vans to tribal communities grew increasingly aggressive as they recruited clients with promises of free food, housing and clothing. Police intervened but didn’t yet fully understand what was happening, the state senator said.