AHCCCS Makes Strides, Reforms Agency in Response to Sober-Living Fraud

Ensuring member safety and access to needed health care services is top priority as agency evolves to prevent fraud

PHOENIX -- Today, the Arizona Health Care Cost Containment System (AHCCCS) detailed agency progress in response to member exploitation and fraud committed by bad actors across the state.

In May 2023, AHCCCS announced its initial findings of credible and willful fraud by sober-living providers across the state. Those findings pointed to blatant and intentional exploitation of members and government programs and resulted in more than 100 suspensions. Since then, AHCCCS has suspended an additional 200 providers, totaling more than 300 suspensions over the past year. Along with the Arizona Attorney General and other law enforcement agencies, AHCCCS has dedicated significant resources to respond to this issue and create a proactive plan to ensure that it does not happen again.

“Our top priority is ensuring AHCCCS members are safe,” said Carmen Heredia, AHCCCS cabinet executive officer. “While focusing on member impact and humanitarian response efforts, terminations and exclusions of bad actors have been at the forefront of agency changes. With support from the Governor’s Office, Tribal Leaders, providers, and sister state agencies, AHCCCS has made great progress through agency reforms.”

Updates on the continuing fraud detection and response shared during today’s media briefing call included:

• Working with its network of health plans, Tribes, behavioral health partners, and other state agencies, AHCCCS immediately established a dedicated hotline for members impacted by sober-living home or residential facility closures.
• Since May 2023, more than 30,000 calls were received through the 211, Press 7 helpline and over 10,000 members directly received support in the form of lodging, food, transportation, and other needs.
• With Arizona’s Tribal Nations disproportionately impacted by the behavioral health fraud, they have been highly engaged with the State’s response. AHCCCS transformed the way it conducts Tribal Consultation and is working with tribes to build a more robust American Indian Health Program (AIHP), including the development of Tribal membership verification criteria for enrollment into AIHP.
• Over the last year, AHCCCS made systemic changes, updated IT systems, implemented better and additional reviews and audits, and hired additional staff. To date, AHCCCS staff made more than 29 policy/process changes with another 10 expected to be completed by year-end, including increased scrutiny of claims, and new identification verification.
• Additionally, AHCCCS recognized a need for change to the AHCCCS Division of Fee for Service Management (DFSM) to ensure appropriate staffing and proper structure to oversee AIHP providers. AHCCCS changed the DFSM organizational structure, and added more than 80 full-time positions in the past year.

“We are committed to evolving this agency to meet the needs of the more than two million Arizonans we serve, and our priority remains on health equity, access to care, quality care and the elimination of fraud in our program,” Heredia said.

A public video of CEO Heredia highlighting the agency’s year in review efforts is available on the AHCCCS YouTube channel.

Please visit azahcccs.gov/soberlivingfraud for the content covered during today’s press call as well as resources and more information.