On October 1st, the Arizona Senate Health and Human Services Committee held a hearing to review how the state is handling one of the largest fraud scandals in its history, a scheme involving fake sober living homes that defrauded Arizona’s Medicaid program out of an estimated $2.8 billion.
The massive fraud, uncovered in 2023, involved fraudulent behavioral health operators billing the Arizona Health Care Cost Containment System (AHCCCS) for addiction treatment services that were never provided. Many of the victims were Native American women, recruited from reservations and vulnerable communities under the promise of free care, only to be abandoned in unregulated homes with little or no treatment.
Following the state’s crackdown, hundreds of facilities were shut down and new enforcement rules were enacted through Senate Bill 1308, signed by Governor Katie Hobbs earlier this year. The law requires sober living homes to be licensed, inspected, and held to strict reporting standards…