Arizona Medicaid fraud exposed a year ago; what’s changed?

A humanitarian crisis in Arizona caused by massive Medicaid fraud was announced to the public one year ago and state officials plan to provide an update on the scandal Thursday.

Carmen Heredia, cabinet executive officer for the state’s Medicaid agency, is expected to speak with reporters Thursday morning. Heredia on May 16, 2023, joined Arizona Gov. Katie Hobbs, Arizona Attorney General Kris Mayes, plus multiple other state, federal and tribal agencies to announce they were investigating what’s believed to be the largest Medicaid fraud in state history.

Investigators have said the fraud primarily targeted vulnerable people enrolled in Medicaid who were seeking help for drug and alcohol dependence. In many cases the people needing help either didn’t get the treatment they needed or worse, they were plied with drugs and alcohol so that fraudsters could keep them housed in sober living facilities and continue billing Medicaid.

Indigenous people enrolled in the agency’s American Indian Health Program were disproportionately affected, state officials have said.

Tribal leaders and members of the Phoenix group Stolen People Stolen Benefits have described disturbing scenes connected with the fraud, of vulnerable people getting lured and enticed into white vans to get purported treatment for drug and alcohol dependence. Some Native Americans went missing from their families because white vans took them to the Phoenix area, away from their homes, and also took away their phones and identification, group members have said.

The state’s Medicaid program is called the Arizona Health Care Cost Containment System (AHCCCS). Mayes initially estimated the fraud had amounted to “hundreds of millions” of dollars, the estimate has since grown to $2 billion or more. The state also is facing wrongful death lawsuits filed by families who say their loved ones were victimized by the schemes.

The Arizona Attorney General’s Office has issued more than 70 indictments connected with the fraud and there have been federal indictments, too. Prosecutors say some of the fraudsters were billing AHCCCS upwards of $1,000 per patient per day.

In one of the more recent indictments, federal prosecutors say Kenneth Harrison and Courtney Haywood, who both live in Nevada, targeted the American Indian Health Program and bilked AHCCCS of more than $9.4 million in under two years. Harrison and Haywood operated a Mesa-based company called Aurtism, which according to the indictment is a combination of the words autism and art and the company was created to provide art therapy.

Federal investigators say Harrison and Haywood “grossly” overbilled AHCCCS for patients they treated, and billed for patients who were getting treatment from other providers. They also billed AHCCCS for patients they didn’t treat, including patients who were in prison, jail or who were dead, prosecutors allege. The pair spent the taxpayer money they received from AHCCCS on real estate, luxury cars, retail purchases and travel, a news release from U.S. Attorney’s Office for the District of Arizona says.

In another federal case, Thvoughn Lynden Curry and his wife, Alexis Daneen Curry of New River were arrested Nov. 2 on wire fraud and money laundering charges connected with an outpatient behavioral health clinic they operated in Mesa. An indictment says that between Feb. 1, 2021, and March 31, 2023, the couple submitted claims for reimbursement to AHCCCS totaling more than $12.5 million for services purportedly provided to about 185 individuals, 163 of whom were insured through the American Indian Health Program.

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