Arizona Moves to Tighten Oversight of Rehab Programs After Fraudulent Activities


On Friday, a Navajo state senator said she hopes her bill to tighten rules on rehab centers gets final approval. This is because of widespread fraud that has stolen hundreds of millions of dollars from Arizona Medicaid and tricked hundreds of Native Americans who were looking for help with their problems.

This week, the Senate unanimously passed Senate Bill 1655, which was introduced by Sen. Theresa Hatathlie. It was then sent to the House, where it got its first reading and was sent to the Health and Human Services Committee.

In an interview, Hathalie said she thinks the full House could vote as soon as Thursday. She also asked her constituents to back the bill.

“This bill will make sure there are checks and balances.” Hatathlie, a Democrat from Coal Mine Mesa on the Navajo Nation and representative for Arizona’s 6th District, said, “This problem has been going on for a long time, and Native people have been hit the hardest.” “If Senate Bill 1655 is passed, it will help people get stronger and heal. Most importantly, it will let thieves know they are not welcome in Arizona!”

This bill comes at the same time that the families of two Native American men who died while in rehab programs in Phoenix sued Arizona’s Medicaid program and Department of Health Services, saying they didn’t have enough control.

The Attorney General’s Office said it wouldn’t say anything about the ongoing civil suit because it is still going after a lot of other cases against those programs.

In May, Arizona’s Gov. Katie Hobbs and Attorney General Kris Mayes said they were opening a new investigation into Medicaid billing theft that started before they took office in 2023.

Most of the bills were sent through the American Indian Health Program, a Medicaid health plan that lets doctors bill directly for services provided to Native Americans and Alaska Natives.

In a report this year, Mayes told Navajo leaders that 72 people and groups had been charged so far, 44 of them since she took office, and that over $90 million worth of goods and cars related to those cases had been seized.

The Arizona Health Care Cost Containment System has put in place stricter rules, such as not letting any new mental health hospitals bill Medicaid for six months. It became more well known about how bad the scams were when state and local governments outside of Arizona issued warnings.

Hatathlie’s suggested law would raise the civil penalty for rehab centers that don’t follow the rules from up to $500 per incident to at least $1,500 per day.

It would also say that family members of patients must be told when they come to a center for an evaluation. People who work in residential homes would have to go through background checks and fingerprinting.

The leader of the Navajo Nation Council, Crystalline Curley, backed Hatathlie’s bill the day it was passed by the Senate.

As a Navajo activist in Phoenix, Reva Stewart helps Native Americans go back to their tribes after leaving fake rehab programs. She is worried that the law might not go far enough to shut down the worst unlicensed facilities because it mostly targets licensed ones.

Stewart said, “We all want a way out of this mess.” I want to be sure that this answer works.

At the start of the Senate hearings, people from nursing homes, assisted living facilities, and other places that might be touched were worried that the penalties might be too harsh for smaller businesses.

Hatathlie said that sites will have 30 days to fix any problems and get back into compliance. The law has been changed a lot in the past few weeks, and she said that more changes could be made.

“This is a big deal; this is a big problem in Arizona,” said Warren Petersen, the Republican leader of the Senate, after the vote on Tuesday. “Don’t mess with Senator Hatathlie if you work for the state and you’re doing something wrong.”

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