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Hacienda Healthcare also at center of financial investigation

Posted at 6:39 PM, Jan 07, 2019
and last updated 2019-01-09 14:42:20-05

PHOENIX — The healthcare company at the center of a national scandal for a incapacitated woman who became impregnated in its care is also under investigation for possibly obtaining millions of dollars from the state improperly, court records show.

In July 2017, the Arizona Health Care Cost Containment System, or AHCCCS, subpoenaed Hacienda Healthcare as part of a financial investigation.

But Hacienda refused to comply with the subpoena, causing AHCCCS to file a lawsuit in September of 2017.

"The basis for the investigation was a referral from the Department of Economic Security (DES), Division of Developmental Disabilities (DDD) regarding possible over-payments made to Hacienda Healthcare by AHCCCS and identifying $3.4 million in questionable direct and indirect costs for the period of July 1, 2013 through June 30, 2014,” according to an affidavit filed in the lawsuit.

In late 2017, a judge ordered Hacienda to comply with the subpoena. But the company again refused to provide documents and appealed the judge’s decision. The appeal process is still ongoing.

State officials declined to comment on the case and lawsuit.

In a statement Hacienda Healthcare said it “strenuously” denied allegations of overpayment. [Read full statement at the bottom of the page]

Hacienda officials have vowed to fully cooperate with Phoenix police’s investigation into a patient in a vegetative state who became pregnant and gave birth.

However, the company has vigorously fought against the AHCCCS investigation since the subpoena was issued in 2017.

The AHCCCS investigation sought all financial documents relating to Hacienda Healthcare and its subsidiaries. Specific information about the type and nature of the questionable costs was not outlined in court documents reviewed by ABC15.


The ongoing lawsuit in question concerns an investigation into payments to Hacienda Healthcare’s ICF-ID program. AHCCCS has not alleged that Hacienda was overpaid in the past. Rather, the question of potential overpayment is being investigated by the agency. Hacienda has strenuously denied these allegations. In cooperation with the investigation, Hacienda has produced records to the investigating agency meant to prove that no such overpayments occurred. Most importantly, this lawsuit has nothing to do with quality of care issues.

Contact ABC15 Investigator Dave Biscobing at