While Hoffman’s statement mostly focused on the fraud scheme that authorities say cost the state $2 billion, he said he also took issue with other matters within AHCCCS involving long-term care. The director of Arizona’s embattled Medicaid agency resigned this week, just as she was expected to face questions from lawmakers about her handling of a massive fraud scheme that largely targeted Native Americans. State Sen. Theresa Hatathlie, D-Coal Mine Canyon, has said she’s heard multiple reports of deaths connected with sober living homes. Hatathlie is a member of the Navajo Nation, which has reservation land in northern Arizona, and has been in her elected position since January 2021. Hobbs, a Democrat who took office in January 2023, told The Arizona Republic this week that in addition to being about financial fraud, Arizona’s sober living scandal is a humanitarian crisis and “must be” prosecuted as one.
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His family said they sent him money for the game, only for him to learn he was being disciplined and wouldn’t attend the game after all. State records show the business, which received a state health department license in April 2021, was reimbursed $3.5 million from Medicaid that year. The next year, Beyond4Wallz’s Medicaid claims more than tripled, to $11.1 million. Anders Hustito did not yet know about the fraud in Arizona or that the programs might be enabling his son’s drinking, rather than helping him quit. But according to public records, there were signs of trouble within facilities and problems with providers’ licenses.
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Several cities and towns across Arizona backed the legislation, citing the urgent need for reform. Sober living homes have historically played a crucial role in the broader recovery ecosystem, offering safe, drug-free environments to individuals transitioning out of treatment programs. The new measure, SB 1308, strengthens the Department of Health Services’ (DHS) authority over sober living homes — facilities that provide housing for individuals recovering from substance use disorders. Under the law, DHS will now have enhanced powers to license, oversee, inspect, and penalize sober living homes that fail to comply with state and local regulations. She was fully aware of the underhanded practices carried out by these facilities, including the fraudulent billing of AHCCCS using the personal information of dead people. Her late grandfather’s information was also caught up in the fraud, as the homes had been illicitly charging his AHCCCS.
The worst actors were accused of plying their patients with alcohol to keep them in their programs and keep the dollars flowing. In recent years, Arizona has seen a surge in concerns surrounding sober living homes, many of which have operated without formal state oversight. Advocacy groups, city leaders, and recovery organizations have reported instances of fraud and abuse, raising alarms about the safety and wellbeing of vulnerable residents. Critics have also warned that lax oversight has allowed unscrupulous operators to exploit government-funded health care programs, leading to the misuse of taxpayer dollars. The Arizona Center for Investigative Reporting is the state’s only independent, nonpartisan and collaborative nonprofit newsroom dedicated to statewide, data-driven investigative reporting.
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He was taken to another hospital and released to his sober living home. Around February 2022, Hustito called home scared, thirsty and unsure of his whereabouts, she said. His family believed he may have been kicked out of his sober living home, leaving him with no place to stay.
- The Republic discovered Ali’s name as it combed through hundreds of state records from AHCCCS and the state commission that oversees businesses, along with hundreds of pages of court records, looking for connections between those accused of fraud.
- It unleashed a humanitarian crisis that targeted people at their most vulnerable, many of them Native Americans who were far from home.
- The state’s Medicaid agency, the Arizona Health Care Cost Containment System, acknowledged the fraud cost taxpayers as much as $2.5 billion.
He authored a self-improvement book to build success, but was caught pushing a behavioral health scam during the pandemic. He returned to Pakistan in 2014, working for a medical billing company. Corporate records filed in Arizona don’t show Pro MD Solutions organizing until August 2021.
In the last two years, her office has prioritized cases involving fraudulent sober living homes. Under the bill, the health department’s director will set standards and requirements for sober living homes to maintain a drug- and alcohol-free environment and promote health and addiction recovery. Health officials could revoke or suspend licenses depending on the severity of a violation or issue fines of up to $1,000 for each day that a violation goes unaddressed.
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As she attends the inauguration ceremonies for Gov. Katie Hobbs, Carmen Heredia, the newly appointed leader of AHCCCS, hears about the sober living scam from Diana “Dede” Yazzie Devine, CEO of Native American Connections. Arizona Attorney General Mark Brnovich indicts 13 people plus various entities on fraud, conspiracy and other related charges that are later connected to the American Indian Health Program. During the COVID-19 pandemic, AHCCCS pauses several administrative requirements, including provider registration fees and onsite visits, that could allow nefarious activity to continue undetected. Through watchdog reporting, local commentary & expert analysis, the Sentinel inspires residents to be meaningfully engaged with our community, promotes transparency & understanding, seeks solutions that empower, & holds the powerful accountable.
According to police, Jeffrey Hustito checked into another sober living home on Dec. 26, this one in the suburb of Glendale. He later smoked fentanyl with another resident and laid down to sleep around 1 a.m. People in the house found him unresponsive 45 minutes later, police said. But he was anticipating another California trip with his treatment program, she said. The place where he stayed in Phoenix, a two-story house with a hot tub and swimming pool, looked like a mansion in the photos that Jeffrey Hustito shared in text messages, his sister, Katherine Hustito, said.
She also had a more hands-off approach to agency operations, including fraud prevention, than her predecessors, according to former AHCCCS employees. The Arizona Center for Investigative Reporting is the state’s only independent, nonpartisan and collaborative nonprofit newsroom dedicated to statewide, data-driven investigative reporting. As Arizona officials crack down on fraudulent behavioral health providers, suspending payments to hundreds of them in a sweeping statewide response, those in need of treatment were caught in the middle, often left on their own to find a path forward. Arizona suspended scores of behavioral health providers as authorities investigated them for defrauding the American Indian Health Plan. There’s a rise in people reported missing from tribal communities who are being found at drug and alcohol treatment centers in Phoenix, a legislative committee is told. The state also launched a hotline for people impacted, implemented stricter provider enrollment and rolled out a humanitarian response to help the victims.
- People reported that they were bribed or given things to keep them there, ensuring continued payments from state agencies as scammers billed for treatment.
- It was the beginning of Mariano’s 10-month ordeal, one that would become wrapped up in a sprawling scam that has exploited tribal members from communities across Arizona and in neighboring states.
- While AHCCCS has suspended the business, law enforcement authorities have filed no criminal or civil actions against Ali or Pro MD Solutions.
- She built her clientele by asking people on the street and at her salon if they needed help recovering from addiction.
Federal officials say it’s the largest case of Medicaid fraud to target a single demographic population in recent U.S. history. Our pioneering effort to rebuild local news will only work if enough people join our Watchdog Club community of paying members. The first person convicted in connection with the fraudulent schemes was sentenced arizona sober living fraud to 3½ years in prison in May 2024. He was able to find a legitimate sober living home that helped him immensely, and after finishing with that program he was able to find another legitimate facility where he continued to receive the help to stay on the right path.
When he awoke, he found himself in an unfamiliar house called Johann and Company, dressed in clothes he didn’t remember putting on. Months of investigation have highlighted the loopholes in the Arizona Health Care Cost Containment System American Indian Health Program, loopholes that have cost the state about $2.3 billion, according to Arizona Attorney General Kris Mayes. It has also left vulnerable tribal members like Mariano on the streets and in need of help. It was the beginning of Mariano’s 10-month ordeal, one that would become wrapped up in a sprawling scam that has exploited tribal members from communities across Arizona and in neighboring states.
They said they’re rooting out bad actors, but legitimate providers said their claims are being flagged, too. Patients need to have a diagnosed mental health condition along with substance abuse problems. During a meeting at the Arizona Legislature, one lawmaker says the fraud may have cost taxpayers more than $2 billion.
As of Feb. 8, officials said they were still checking with their legal department about what they could say “due to this being an investigation led by the FBI.” The Arizona AG’s office says Nathan ran the Medicaid fraud scheme from March 2020 to August 2021. PHOENIX – The sober living scheme ravaged the Arizona Health Care Cost Containment System (AHCCCS) for an estimated $2.5 billion in fraud, costing taxpayers. Clinics billing through that plan had no dollar limit on the amounts charged for services.
Starting around 2019, people were lured into substance abuse treatment programs and housed in sober living homes where operators often allowed patients to continue using drugs and alcohol, according to officials. Meanwhile, many providers excessively billed the state’s American Indian Health Program, Medicaid insurance available to tribal citizens, for treatment they did not deliver. A class-action lawsuit filed last month by families who allege the state’s inaction harmed or killed loved ones seeking addiction treatment names three people who died outside of sober living homes or treatment programs. Their deaths are not among the 40 fatalities tied directly to the facilities in medical examiner records. As a way to help the tribal communities impacted by the fraudulent sober living home practices, the attorney general’s office launched a $6 million grant program for tribal nations and non-profits. The Hobbs administration began to grasp the scope of the fraud scheme in the weeks that followed, said Christian Slater, the governor’s spokesperson.
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Legislation increasing oversight of sober living homes in Arizona has been signed by Gov. Katie Hobbs, two years after state officials announced that a Medicaid fraud scheme had targeted Native Americans seeking drug and alcohol treatment. Meanwhile, Native Health and Native American Connections, two well-established providers in Phoenix, pressed authorities to do more. As Hobbs took office in January 2023, the organizations held a meeting with other community health centers, law enforcement, AHCCCS and state health officials to discuss human trafficking and Medicaid fraud. Meanwhile, word spread on social media that white vans were appearing on reservations and people with addiction were disappearing, said state Sen. Theresa Hatathlie, a Democrat from Coalmine Mesa on the Navajo Nation.
There are many similar cases involving criminals who stole taxpayer dollars under the guise of helping Native Americans with substance use disorder being, authorities said. PHOENIX — Eleven Tribal nations and community members hurt by Arizona’s sober living home fraud scandal will benefit from a new wave of grants. If anything, we need to be more aggressive in cutting off these bad actors and prosecuting these bad actors. Hoffman also criticized Heredia for the way AHCCCS cracked down on Medicaid fraud.