A scandal involving fraudulent billing in sober living homes rocked Arizona in 2023, leading to at least 40 deaths and likely many more. Thousands of mostly Native American individuals seeking addiction treatment were exploited by providers who billed Arizona’s Medicaid Program for services they never delivered, amounting to millions of dollars in fraudulent claims.
Reporter Mary Hudetz uncovered this scandal, shedding light on the victims and the negligent role of the state in the class action lawsuit. The victims, often picked up from reservations and taken to supposed sober living homes in the Valley, faced inadequate treatment and sometimes tragic outcomes. One such victim, Jeffrey Hustito, entered treatment for alcoholism in Phoenix in 2021 but ultimately succumbed to the fraudulent practices.
The response from the state, specifically the Hobbs administration, was criticized for its delayed action and failure to set a cap on reimbursement rates, allowing providers to continue fraudulent billing practices. While the state has taken steps to address the issue, such as suspending payments to suspicious providers and conducting investigations, there has been a lack of outreach to victims and their families, leaving many in the dark about the circumstances of their loved ones’ deaths.
AHCCCS, Arizona’s Medicaid agency, has acknowledged the severity of the fraud and their commitment to collaborating with Tribal partners and law enforcement to protect members. Director Heredia’s leadership in combating the fraud has been emphasized, with ongoing efforts to reform and improve program integrity. The state’s response to the scandal remains under scrutiny as more details emerge about the extent of the exploitation and the lives lost as a result.
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