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Arizona committee hears agency account of widespread behavioral-health billing fraud and state response
Summary
State Medicaid officials told legislators that a large-scale "sober living" billing fraud inflated spending in the American Indian Health Program and prompted hundreds of payment suspensions, while the Attorney General's office described criminal prosecutions and asset seizures. Lawmakers pressed agencies for data and follow-up.
Chairwoman Warner convened the Senate Health and Human Services Committee to examine what witnesses called a large, multi-year fraud scheme that funneled Medicaid dollars through behavioral-health providers and unlicensed facilities.
Marcus Johnson, deputy director at Access, told the committee that fraudulent activity produced dramatic spikes in spending and enrollment in the program often referred to in testimony as the American Indian Health Program (AIHP). "The fraud we have seen right through the behavioral health landscape is staggering," Johnson said, and he described examples he said his agency saw: ghost billing, duplicate claims, patient brokering and providers moving members into AIHP without authorization.
Johnson said the agency is the payer for roughly 2,000,000 Arizonans, with roughly 110,000 members in the AIHP. He told the committee that between April 2020 and March 2023 AIHP paid amounts…
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