Hobbs and Mayes allege massive billing fraud in Arizona health plan

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PHOENIX Arizona is the victim of massive fraud in its health care program, Gov. Katie Hobbs and Attorney General Kris Mayes said Tuesday, and they blamed their Republican predecessors for ignoring it.

The program involves sober living houses enrolling Native Americans, often on the streets, with the promise of treatment, the Democratic governor and attorney general, who took office in January, said at a news conference.

But they said when patients arrived home there was no treatment and, according to Hobbs, some had to escape through windows and jump over fences in the middle of the night just to get to a phone to reach the outside world.

Hobbs said Arizona’s health care cost containment system, the state’s Medicaid program, was billed for the services.

Mayes said the scammers used the names of Native Americans, some of whom had died, to charge for services never provided.

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This, the two say, happened because the AHCCCS, under an appointee by former Governor Doug Ducey, and the Attorney General’s Office previously headed by Mark Brnovich, failed to solve problems appropriately.

That’s what you get when you have a governor who doesn’t care about governing, Mayes said.

Rebuttal by former officials

This drew scathing responses from a spokesperson for Ducey and Brnovich.

The investigations revealed today had been ongoing for several years, long before the current occupiers took office, said Daniel Scarpinato, who was Duceys’ chief of staff.

He pointed out that even Mayes acknowledged there had been more than 40 lawsuits and $75 million recovered in the past three years, long before Hobbs and Mayes took office in January.

Scarpinato called the Democrats’ press conference grandstanding.

Brnovich had a similar reaction. Our office has prosecuted a record number of health care fraud cases, he said. It’s sad that the governor and current attorney general are more focused on scoring partisan political points instead of protecting Arizonans.

But Mayes said past lawsuits amounted to a heavy-handed approach of going after individual fraudsters but never acknowledging or solving the problem.

The alleged schemes

Every case of fraudulent claims cited by Hobbs and Mayes involved care for Native Americans.

Most of the more than 2.4 million registered residents are in health care plans paid through a federal and state dollar flat fee for all care.

But under federal law, services to Native Americans are provided on a fee-for-service basis. Mayes said that makes it attractive for sober households to seek them out and register them for care.

Mayes said that was only part of the scam.

They simply bought lists of people’s names and birthdates and used them to bill AHCCCS, she said.

There have even been instances where the state has been billed for services it has declared impossible to perform, such as 13 hours a day of rehab services for a 4-year-old child for whom they had the ID. Child’s AHCCCS.

This poor child was not in one of the facilities and did not need alcohol rehabilitation, Mayes said.

She said there were similar billings, like $1 million for treating a woman and her children over the course of a year.

There were also services for patients who were dead, in jail, or obviously not in Arizona at the time.

Estimate: Hundreds of millions lost

Most of these incidents went unnoticed and not prosecuted, Mayes said, despite what she said were complaints logged by AHCCCS investigators and within the office she had. inherited from Brnovich.

It should never have happened, she said.

Mayes estimated that over the past three years hundreds of millions of dollars have been lost to fraud. But she declined to give a specific figure on this.

I wish I could be more specific about that, Mayes said. I don’t think it’s an overstatement to say that this is one of the biggest scandals in the history of the State of Arizona as far as our government is concerned.

Previous administrations were asleep at the switch, asleep at the wheel, Mayes said. The Ducey administration has been, at best, negligent in allowing crooks and fraudsters to take advantage of AHCCCS’ outdated, outdated systems and incompetent management.

She said Brnovich failed to provide leadership from his staff now his staff to pursue the matter.

He and Governor Ducey should have done what Governor Hobbs and I are doing today: take aggressive action to stop the money supply to these fraudulent actors and work to ensure that we eliminate fraud and abuse in our state’s Medicaid program, Mayes said. .

Carmen Heredia, chosen by Hobbs to lead the AHCCCS, said the first part of this is happening now.

We have suspended payments to approximately 100 Medicaid providers based on credible allegations of fraud, the first step in what is required under federal law, she said.

It’s suspicious

Mayes said the alarms should have gone off in the administration of the AHCCCS under someone named Ducey.

In 2019, she said, $53.5 million was billed to AHCCCS under the Ambulatory Behavioral Health Services Code. This amount more than doubled to $132.6 million the following year, increased to $291 million in 2021, and reached $668 million in fiscal 2022.

I can’t sit here and tell you how much of that growth is fraud, Mayes said. But our agents will tell you, it’s extraordinary growth. It’s unusual, it’s suspicious.

Gov. Katie Hobbs says the state has been the victim of massive fraud caused by sober shelter operators registering Native Americans for needed or unnecessary care and then not providing services.

Howard Fischer, Capitol Media Services

Mayes made it clear there were efforts to resolve the issue before he took office in January. In fact, she’s the one who admitted that more than 40 people have been charged in the past three years and the state has recovered $75 million.

But the problem, she said, is that no one at AHCCCS or the Attorney General’s Office has undertaken a systemic review.

She and Hobbs claimed that failure starts at the top.

Mayes said prosecutors and investigators in what is now his office have been shouting from the rooftops for some time now, trying to get the leadership of the attorney general’s office and the leadership of AHCCCS to shut down the money so to solve the problem. Similar alarms were raised by AHCCCS investigators, she said.

Instead, she said, Brnovich and the AHCCCS prosecuted offenders as they were discovered. According to Mayes, all of this resulted in these people simply forming a new social entity to resume their activities.

You can’t go your way out of this problem, she said.

There is another side to the problem. Several tribal leaders said the possibly not entirely voluntary recruitment has led to questions about whether some missing tribal members are being held against their will in sober houses.

About 15 million Americans who rely on Medicaid coverage are at risk of losing it as a pandemic policy expires.

Howard Fischer is a veteran journalist who has reported since 1970 and has covered state politics and the Legislature since 1982. Follow him on Twitter at @azcapmedia or email [email protected].

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