A massive Medicaid scam has caused a humanitarian crisis in Arizona, impacting thousands of Native Americans from multiple tribes and states. They were lured to sober living homes by people pretending to be legitimate behavioral health providers. The fake providers then billed Arizona’s Medicaid Agency for services that were never provided.
Thousands Impacted by “Biggest Scandal” in Arizona History
At a press conference, Arizona Governor Katie Hobbs explained that Arizona is assessing the number of people affected. However, she admitted “it may be in the thousands.” Arizona Attorney General Kris Mayes joined the Governor at the press conference. The Director of Arizona Health Care Cost Containment System (AHCCCS), Carmen Heredia, also attended.
The Navajo Nation also estimates the number of people impacted being in the thousands. Navajo Nation President Buu Nygren sign an Emergency Declaration in June. According to the Declaration, there are “significant concerns about the impacts to Navajo lives from abrupt displacement that have affected an estimated 5,000 – 8,000 Navajo individuals.”
Arizona Attorney General Mayes said, “I don’t think it is too much to say that this is … one of the biggest scandals in the history of the state of Arizona when it comes to our government.” No other state has experienced this level of Medicaid fraud in an American Indian fee-for-service program, according to Mayes.
Mayes also provided a breakdown of the charged to AHCCCS since 2019, involving the American Indian fee-for-service program. In 2019, Mayes said, AHCCCS was billed $53.5 million under the outpatient behavioral health clinic code. Then, in 2020, those billings more than doubled to $132.6 million and continued to increase. By 2021, it hit $291 million; by 2022, it had skyrocketed to $668 million.
How the Medicaid Scam Worked
According to Attorney General Mayes, the scheme began with providers setting up fraudulent treatment facilities. These facilities then focused on “recruiting” Indigenous people. These were typically people residing within tribal nations. Indigenous people who were part of the urban homeless population in the Phoenix area were also recruited. Mayes said that the Indigenous people targeted may have been in crisis and were extremely vulnerable. Claiming to be legitimate healthcare providers, the facility recruiters then lured victims into vehicles. To get them into the vehicles, the traffickers made promises of free food, cash incentives, or rent.
They then trafficked the tribal people to supposed treatment facilities and obtained their personal information or AHCCCS card. If a potential patient was not enrolled, that did not stop the fraudulent behavioral health facilities. Mayes said the facilities would contact AHCCCS by phone to obtain eligibility. They claimed that the patient was eligible for the plan simply by being Native American. Then, the recruiters allegedly billed the state’s Medicaid system for rehabilitation services that were never provided.
“The bad actors used these people to egregiously overbill AHCCCS for treatment services,” Attorney General Mayes said at the news conference in May. Arizona has lost hundreds of millions of dollars to these fraudulent schemes, according to Attorney General Mayes. However, she conducted that the total amount could be a lot higher.
Arizona Responses to the Medicaid Scam
Since the news conference, AHCCCS changed its enrollment procedures for the American Indian Health Program. The agency no longer accepts requests for enrollment into the AIHP over the phone. Instead, new enrollees need to submit requests in writing to AHCCCS by fax or email by an Indian Health Service (IHS), Tribally owned/and or operated 638 facility, or Urban Indian Health Organization on behalf of a member.
In addition to updating its enrollment process, Arizona has suspended payments to over 100 behavioral health providers. The suspensions are based on credible allegations of fraud. “The State of Arizona is taking swift action to stop a humanitarian crisis, root out waste, fraud and abuse, and crack down on bad actors exploiting Tribal communities,” said Governor Katie Hobbs. “I’m proud of our law enforcement officials and AHCCCS for taking action to hold fraudulent billers accountable and protect some of our state’s most vulnerable communities.”
Further, continued access to health care services for impacted tribal members is also a top priority any time a CAF payment suspension is issued, so AHCCCS is working with its network of health plans, tribes, behavioral health partners, and other state agencies to contact and connect impacted tribal members with the resources they may need, such as:
- A hotline at 2-1-1 (press 7) for people impacted by the closure of a sober living home or residential facility,
- Mobile crisis teams ready to deploy when members need hands-on, immediate behavioral health services, transportation, or care coordination, and
- Coordination of immediate housing, transportation, and health services related to a provider closure.
Navajo Nation Response
The Navajo Nation has also taken steps to address the crisis, including declaring an emergency declaration, setting up a new operation to mobilize resources, and sending police to search for displaced tribal members.
The Emergency Declaration authorizes mobilization of resources to protect the health, safety, and welfare of the citizens of the Navajo through acquisition of additional personnel, travel resources, medical supplies, equipment, and contracting support and services.
Navajo Nation President Buu Nygren stood up Operation Rainbow Bridge to mobilize the Navajo Nation’s response to the displacement of thousands of Navajo Tribal members. Operation Rainbow Bridge expanded collaborative partnerships with the State of Arizona, Governor’s office, Arizona’s Office of Attorney General, AHCCCS, Navajo Area Indian Health Service (NAIHS), Phoenix Indian Health Service, the Phoenix Indian Center, and others to coordinate response activities in addressing the crisis and to prevent further detrimental risks and harm to overall human health and safety of affected individuals.
The Navajo Police Department has also taken important steps, including collaborating with various law enforcement agencies, victim advocacy groups, and a search and rescue groups regarding missing persons, including those thought to have fallen victim to the Medicaid scam. Additionally, a team of Navajo Nation police officers have been in the Phoenix area, searching for Indigenous people impacted by the closure of the fraudulent rehabilitation facilities.
In terms of a federal response, the U.S. Department of Health and Human Services (HHS) Office of Inspector General issued a consumer alert. Another HHS agency, the Indian Health Service, issued a letter to Tribal leaders and urban Indian organizations, notifying them of the fraudulent tactics targeting Native American communities in Behavioral Health Treatment Centers.
Learn More
To learn more about the crisis, visit the website of the Navajo Nation’s Operation Rainbow Bridge.
