Report: Massive Medicaid Fraud Cost Arizonans Hundreds of Millions

Emma Campbell | May 18, 2023
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Arizona Gov. Katie Hobbs and Attorney General Kris Mayes announced Tuesday that a “massive” Medicaid fraud has cost the state hundreds of millions of dollars, blaming the problem on the previous Republican administration.

According to an investigation, illegitimate group homes in the state of Arizona have been billing the state’s Medicaid program for services that were never rendered to people, specifically targeting Native Americans. The homes allegedly also used the names of people who were dead, in jail, or not in Arizona at the time in order to get more money from the state. It is suspected that this fraud scheme took advantage of thousands of individuals.

Fraudulent group homes often gather their patients from vulnerable populations, and upon arrival would pressure them to sign up for the Arizona Health Care Cost Containment System (AHCCCS) to pay for treatment that would either never arrive or be significantly lacking. At least some of these “homes” end up leaving the people they recruit unsupervised in these “treatment centers” to use alcohol and drugs. This “white van syndrome,” as some indigenous leaders are calling it, is a growing problem in the indigenous community, leading to countless overdoses.

Related: Washington State Passes Law Keeping Drug Possession a Crime

When revealing these massive amounts of fraud to Arizonians, the Hobbs administration explicitly passed the blame onto the preceding Republican administration, singling out former Gov. Doug Ducey and former Attorney General Mark Brnovich. Mayes called the Ducey administration “negligent” and “incompetent” and asserted that Brnovich was a poor leader to his staff.

Brnovich and Ducey were quick to respond to the allegations and defend the work their administration had accomplished. Daniel Scarpinato, a spokesman for Ducey and his former chief of staff, noted that the investigation “had been underway for several years, well before the current occupants took office.” He also pointed out that $75 million had been recovered through more than 40 prosecutions in the three years before Hobbs and Mayes took office.

Brnovich asserted that his office had “prosecuted a record amount of healthcare fraud cases” and criticized Hobbs and Mayes for focusing on “scoring partisan political points instead of protecting Arizonians.”

AHCCCS payments to over 100 fraudulent medical providers have been suspended and are awaiting further investigation while AHCCCS conducts a third-party audit of all claims since 2017 to determine the reach of this fraud.

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