Governor Hobbs and Attorney General Mayes Work to Aid Tribal Communities Combat Medicaid Fraud and Expand Broadband

This last week of May 15, 2023, Arizona Governor Katie Hobbs and Attorney General Kris Mayes teamed up at a press conference with Salt River Pima-Maricopa Indian Community President Martin Harvier, AHCCCS Director Carmen Heredia, representatives from 13 tribal nations, and law enforcement to announce actions against over 100 vendors that have engaged in fraudulent acts on perhaps thousands of vulnerable patients including many members of Tribal Communities and the urban homeless population to the tune of perhaps hundreds of millions of dollars (or higher) in charges to the State Medicaid Program.

During the conference, Governor Hobbs advised anyone that has been a victim of this fraud or knows or suspects a loved one that has been harmed or missing to call 211 to report that alleged incident.

At the beginning of the conference, the Governor announced:

“Today, we are announcing actions against over 100 providers of behavioral health, residential, and outpatient treatment services that we have credible reason to believe have defrauded the state’s medical program of hundreds of millions of dollars. Due to these credible allegations, AHCCCS (the state Medicaid Program) yesterday suspended payments to these  providers.”

“For years (translation for readers: under the previous Republican Governor and Attorney General,) 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. It’s alleged that these providers target the most vulnerable people, offering them the false promise that they will be given food, housing, and access to treatments at a group living home or rehab facility. People are then left in these facilities without proper access to healthcare and treatment services. Instead, they’re allowed and sometimes encouraged to continue using drugs and alcohol. Often, they’re not allowed to leave the facility or contact relatives. Meanwhile, the fraudulent providers bill Medicaid for additional treatments and other health care services…”

“Prior to my administration, AHCCCS had taken a piecemeal approach to targeting these fraudulent providers. The prior administration (Governor Ducey and Attorney General Brnovich) did this on a case-by-case basis, never implementing the systemic order of health necessary to root out this problem and failing to deliver true accountability. Unfortunately, this approach led to fraudulent providers continuing to exploit tribal communities for their own financial gain... Under my administration, this will change…To start, I wanted AHCCCS to make several operational changes including a third-party forensic audit of all claims since 2019… To the individuals and families affected by these suspensions, my heart is broken by the pain that you have been forced to endure. The state of Arizona believes you. We stand with you and we are committed to working with you to solve this problem and get people home safe. Thank you to our law enforcement officials and AHCCCS for taking action, and to our MMIP Task Force for helping bring to light these fraudulent providers and the stories of those who have been affected by them… This is just the first step…we will take the actions necessary to bring an end not just to the fraudulent activity but also to the humanitarian crisis that it has created…”

Attorney General Mayes addressed the event after the Governor and relayed:

“Our administrations are taking aggressive steps to stop fraudulent Medicaid billing practices by scam artists or criminals masquerading as legitimate Behavioral Health Providers…I would like to thank the members of the Indigenous People’s Caucus and our State’s Tribal Leaders for continuing to advocate for changes to a system that allowed these alleged crimes to occur, harming vulnerable individuals, and deceiving taxpayers…”

Like the Governor, the Attorney General took aim at the previous Governor and Attorney General’s commitment to justice, calling their efforts “a game of whack a mole because of the inability and unwillingness of the previous administration to address the structural vulnerabilities inherent in the civil fee for service billing model of AHCCCS in the American Indian Health Plan.”

Mayes, like Hobbs, asserted that the vulnerable victims were conned to participate in these fraudulent services by the promise of free food, cash, or rent. Once the patient joined the fraudulent facility (sometimes overnight on a perpetual basis,) their private information, especially their AHCCCS identification was recorded, saying “the bad actors used these people to egregiously overbill AHCCCS for treatment services they did not render or grossly misrepresented…the fraudsters also controlled the locations of the patients to maximize fraud opportunities and to allow the schemes to continue, even after the facilities were shut down or suspended by AHCCCS…”

The Attorney General also relayed that the fraud was easy to commit as alleged bad actors just purchased lists of names and birthdays to bill AHCCCS. Furthermore, they falsely charged the state Medicaid program for “impossible services” like billings for dead, incarcerated, or out-of-state people and alcohol rehabilitation of 13 hours a day to a four-year-old whose ID they fleeced.

Discussing the human impact of this extensive fraud, Attorney General Mayes said:

“This is the most heartbreaking of all. While these scammers are using random IDs to bill for millions of dollars worth of services, thousands of Arizonans are in real need. Some have been living in these facilities while not being provided the services they need. Some of them…may be considered missing by their families because they may have been unable to contact family members to tell them where they are.”

“The bottom line is this. This never should have been allowed to happen. The previous administrations (Ducey and Brnovich)were asleep at the switch. Asleep at the wheel…In the wake of their ineffectiveness, some of the most vulnerable individuals in our state were harmed and taxpayers paid for it…This was a stunning value of government. There is no other way to say it. But it ends now.”

The Attorney General then relayed the new (and overdue) control mechanisms AHCCCS is instituting to ensure these fraud schemes do not materialize again. She also repeated what Governor Hobbs stated at the beginning of her remarks: that the payments to the fraudulent providers have been suspended.

Mayes concluded by stating:

“Our efforts will strengthen the legitimate Behavioral Health Treatment Centers doing things the right way. Our actions will dramatically protect more of our Medicaid dollars from being stolen by illicit enterprises…(We) will continue our investigations and prosecute those guilty of crimes to the fullest extent of the law…We are conducting thorough criminal investigations and we will aggressively prosecute these cases…”

Later the Governor and Attorney General issued several posts on social media, including:

Former State Representative and advocate for Tribal communities Jennifer Jermaine applauded the actions of those informed in making this action against the fraudsters happen, posting:

The Governor works with Tribal Communities to Expand Broadband.

On May 19, Governor Hobbs met with representatives from the 22 Tribal Nations in Arizona to discuss expanding broadband to their communities.

Funds for this expansion are coming from both federal grants and the recently passed bipartisan state budget.

Commenting on this event, the Governor offered:

“With the collaboration and input from tribal leaders who represent all 22 federally recognized tribes in Arizona, we expect to curate a comprehensive plan that addresses the disparate needs of tribal communities when it comes to broadband. I am committed to using this funding, as well as the additional state funding provided by this year’s budget, to connect Arizona’s diverse communities and build an Arizona for everyone.”

Later, she posted on social media: