Arizona AG still investigating about 200 sober living home fraud cases
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Attorney General Kris Mayes. Photo: Jeremy Duda/Axios
The Arizona Attorney General's Office is still investigating around 200 cases in the massive sober living homes Medicaid fraud scandal targeting Native Americans.
Why it matters: Shady sober living homes serving largely Native American patients promised addiction treatment that was never delivered and exploited people in dire need for profit.
- At least 40 people died in the homes, mostly of drug and alcohol abuse, while the state grappled with the situation, ProPublica and the Arizona Center for Investigative Reporting reported last year.
The big picture: Since 2021, investigators have uncovered about $2.8 billion in fraudulent billing to the Arizona Health Care Cost Containment System (AHCCCS), the state's Medicaid program, for bogus sober living home treatment services. Per the AG's office:
- In some cases, scammers brought people enrolled in the American Indian Health Program to sober living homes and billed AHCCCS for care that was never provided, often trading patients with other collaborators.
- Patients were sometimes plied with drugs and alcohol to keep them longer, and were sometimes prevented from leaving.
- In other cases, entities billed AHCCCS for nonexistent patients, dead people or children.
State of play: The AG's office expects "many more" indictments in the coming months stemming from some of the 200 current investigations of individuals and entities, spokesperson Richie Taylor told Axios.
- "These are sprawling schemes. Some of them are connected. Some of them are not," he said.
Zoom in: There have already been about 140 indictments resulting from AG's office investigations, Taylor said.
- About 89 of those indictments have resulted in convictions or settlements in which charges were dropped and restitution paid.
- Most cases flow through the Arizona AG's office, but there have been more than a dozen federal indictments as well, said Taylor, who added that the FBI and U.S. Department of Justice take the lead on crimes committed on tribal land, where the state lacks jurisdiction.
Catch up quick: A dramatic surge in billing for bogus services began in 2019.
- Then-AG Mark Brnovich secured the first indictments in the fraud epidemic in 2021.
- After AG Kris Mayes took office in early 2023, the state launched a crackdown, to which she attributes a 92% drop in use of the behavioral health billing code used to bilk AHCCCS.
- Taylor told Axios that prosecutions, reforms and increased scrutiny have had a deterrent effect.
What we're watching: In late 2024, attorneys filed a class-action lawsuit against the state on behalf of an estimated 7,000 victims, arguing that the government ignored signs of the massive crisis.