PHOENIX — Three years after Arizona launched investigations into Medicaid fraud that preyed on Native Americans and cost taxpayers an estimated $2.8 billion, a Navajo small-business owner says nothing has really changed.
Fraudsters targeted tribal members, promising substance-abuse treatment in sober-living homes in the metro Phoenix area that was never delivered. The schemes billed the Arizona Health Care Cost Containment System, the state’s Medicaid agency, through the American Indian Health Plan.
Reva Stewart, the owner of Shush Diné and founder of the nonprofit Turtle Island Women Warriors, said she still sees people trying to recruit tribal members. On Saturday, two women with business cards from a Gilbert group home approached her outside her Phoenix store.
“And they said, ‘Well, we're here to help your kind,’” she told ABC15. “And I said, ‘Excuse me?’ She says, ‘Well, we're looking to help your kind.’”
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Stewart later saw the women talking to unhoused Native Americans sitting at a bus stop near the Phoenix Indian Medical Center, she said. The tribal members told Stewart the women asked if they needed a place to go but they declined.
“I said, ‘Thank you. Thank you for saying that, because if you go into these homes, you will end up dead,’” Stewart said. “I said, ‘These people are not here to take care of you.’”
AHCCCS to use AI tool to fight fraud
Billing for behavioral-health services through the American Indian Health Plan, a fee-for-service system, is down 92% since the state cracked down on fraud, Attorney General Kris Mayes said last week. And staff in the Governor’s Office have told ABC15 massive fraud is not currently occurring, saying data and referrals do not support allegations of widespread fraud.
“This kind of fraud is not going to happen under my watch, and we're going to take the action we need to stop bad actors,” Gov. Katie Hobbs said in Tucson, where she discussed a new AI tool to detect fraud in AHCCCS.
The Medicaid claims prepayment review system, which launches in July, will use AI to rank claims by fraud, waste and abuse risk before payment is made and flag the highest-risk claims for human review.
But Stewart said she has not seen a change since the fraud was uncovered three years ago.
“It’s still happening,” she said. “And it’s going to continue to happen if everybody keeps pointing fingers.”
Stewart reported the Gilbert home she saw on Saturday and has gone “anywhere that anybody would listen” to report other instances.
“At this point, it's like, fix it. Quit messing around and fix this, because you're hurting our people, you're hurting families, grandparents, mothers,” she said.
Republicans say fraud is still a problem
State Sen. Carine Werner is sounding the alarm about a provider now operating on tribal land, saying the schemes seen in Phoenix are now being duplicated on reservations.
“So they're opening up a facility on tribal land, which requires no licensing and very little oversight,” she said. “They're using different billing codes.”
The FBI is investigating the individual, according to Mayes’ office.
The person “fleeced our taxpayer system for hundreds of millions of dollars” and has previous enforcement actions against them, Werner said, and is now skirting the law by moving to tribal land.
Werner last week said Mayes had failed to seize assets to prevent such repeat offenders.
Mayes said Thursday the Legislature in 2021 curtailed the ability of prosecutors to seize assets in such cases by requiring a conviction in Racketeer Influenced and Corrupt Organizations, or RICO, cases.
Mayes’ office has indicted 140 people and businesses and secured 41 convictions, including a nurse practitioner who was sentenced to 3.5 years in prison this month after pleading guilty.
“I know that no number of indictments or convictions or amount paid back in restitution can undo the pain and heartbreak and suffering caused by this scandal,” she said. “But please know that we have heard your stories, and we have seen the damage that has been done. And bringing justice to those accountable is what drives the work at my office every day, and we will not quit until this justice is done.”
