Hannah Bassett

Arizona Has Recovered Just 5% of Taxpayer Dollars Lost in a $2.5 Billion Medicaid Fraud Scheme The state has so far indicted more than 100 individuals and recouped $125 million. But despite state and federal efforts, it’s likely that most of the stolen taxpayer money won’t be recovered,…

Arizona has so far indicted more than 100 individuals involved in the Medicaid fraud scheme and recouped $125 million — just 5% of the funds the state estimates it paid to bad actors.

By @jasminedemers.bsky.social, with @azcir.org

It is such a public service to have newsrooms like @azcir.org on the story for its entirety—and of course to have a partner like @propublica.org and the difference they've made.

I'm no longer with AZCIR (I moved out of state, sad!), but I know they'll stay on the story for as long as it takes.

Arizona's Medicaid fraud crisis is not only one of the largest in Arizona's state history but also the largest of its kind in modern US history, so it's no surprise there have been many developments over the past two years. But the last few weeks have felt markedly different.

Arizona has recovered 5% of taxpayer dollars lost in $2.5 billion Medicaid fraud scheme The state has so far indicted more than 100 individuals and recouped $125 million. But despite state and federal efforts, it’s likely that most of the stolen taxpayer money won’t be recovered, officia...

And out today from @azcir.org's Jasmine Demers: a hard-hitting piece detailing how Arizona's has recovered just 5% of taxpayer dollars lost in the $2.5B medicaid fraud scheme, with reporting contributions from me & @clomahqu.bsky.social. Co-published with @propublica.org
azcir.org/news/2025/05...

Dozens died in sober living homes as Arizona fumbled fraud response Arizona officials acknowledged that a fraud scheme targeting Indigenous people with addictions cost taxpayers $2.5 billion, but haven't accounted publicly for the deaths tied to the scheme.

While much of the fraud occurred prior to Heredia taking helm of the agency, my public records requests with @azcir.org—obtained with invaluable assistance from @rcfp.org—found Heredia also stalled a key reform the agency would later credit with helping to stem the fraud.
azcir.org/news/2025/01...

Director of Arizona Medicaid agency resigns following fraud scheme response Under Carmen Heredia’s leadership, the agency withheld payment to more than 300 businesses as it investigated fraud allegations. The state’s swift response left patients homeless, AZCIR and ProPublica...

And last week, Medicaid agency director Carmen Heredia resigned—just as she was expected to face questions from state lawmakers about her handling of the Medicaid fraud crisis and the agency's response.
azcir.org/news/2025/05...

New law increases oversight of Arizona sober living homes The legislation follows an AZCIR and ProPublica investigation on a $2 billion Medicaid fraud scheme that targeted Native Americans seeking drug and alcohol treatment.

Since then, a lot has happened!

In April, Arizona passed a new law increasing oversight of sober living homes. The law, which received bipartisan support, creates new inspection and reporting requirements, among other reforms. azcir.org/news/2025/04...

Dozens died in sober living homes as Arizona fumbled fraud response Arizona officials acknowledged that a fraud scheme targeting Indigenous people with addictions cost taxpayers $2.5 billion, but haven't accounted publicly for the deaths tied to the scheme.

But we found the human cost ultimately was far greater.

At least 40 Native American residents of sober living homes and treatment facilities in the Phoenix area died as Arizona officials fumbled their response to Medicaid fraud targeting Indigenous people.
azcir.org/news/2025/01...

Arizona’s medicaid fraud crackdown hurt Native American patients Arizona suspended scores of behavioral health providers as authorities investigated them for defrauding the American Indian Health Program. The state’s actions left patients homeless and without treat...

The experience of one bright young girl, Rainy, and her behavioral health provider highlighted what the human cost of interrupted behavioral health care looked like more than a year on.

Reported w/ @maryhudetz.bsky.social in collaboration w/ @azcir.org & @propublica.org
azcir.org/news/2024/09...

AHCCCS alerted to ‘predictable’ homelessness surge in 2022 The embattled state agency at the center of Arizona’s ongoing behavioral health crisis knew its proposed billing reforms could trigger a surge in homelessness nearly a year before enacting the changes...

Through public records requests, I found the Medicaid agency had been warned a crackdown on fraudulent sober living homes could trigger a surge in homelessness. Yet the agency still failed to adequately prepare for the fallout, or adjust its response to the following crisis azcir.org/news/2023/12...

State response to medicaid fraud creates ‘pure chaos’ for patients Arizona's failure to anticipate the impact of suspensions among behavioral health providers suspected of medicare fraud put patients at risk of further harm.

In May 2023, the state announced it would crack down on bad actors and help victims, many of whom were facing homelessness. But advocates helping people impacted by the fraud told me and @mpolletta.bsky.social that the state’s response was “pure chaos.” For @azcir.org: azcir.org/news/2023/11...

Brief background: Between 2019-2023, fraudulent sober living homes lured 1000s of patients into facilities that would bill the Medicaid agency (AHCCCS) for services never provided. Officials estimated the fraud cost $2.5 billion. But the human toll largely went uncounted.

Major developments recently to Arizona's Medicaid agency, several closely tied to my reporting with @azcir.org & @propublica.org on the devastating fraud scheme that left many patients—disproportionately Native American—without access to drug and alcohol treatment.

🧵A quick recap and round-up

Impact from my reporting with Mary Hudetz for @azcir.org and @propublica.org, and the ongoing work of so many to push for increased accountability and oversight ⤵️

New Law Increases Oversight of Arizona Sober Living Homes The legislation follows a ProPublica and Arizona Center for Investigative Reporting investigation on a $2 billion Medicaid fraud scheme that targeted Native Americans seeking drug and alcohol treatmen...

🚨IMPACT alert: A new Arizona law increases oversight of sober living homes. The legislation follows a @propublica.org and @azcir.org investigation on a $2 billion Medicaid fraud scheme that targeted Native Americans seeking drug and alcohol treatment. @maryhudetz.bsky.social

Dozens of People Died in Arizona Sober Living Homes as State Officials Fumbled Medicaid Fraud Response Arizona officials acknowledged that a fraud scheme targeting Indigenous people with addictions cost taxpayers $2.5 billion. But they haven’t accounted publicly for the number of deaths tied to the sch...

At least 40 Native residents of Phoenix-area sober living and treatment facilities died between spring 2022 and summer 2024, amid a Medicaid fraud crisis. Most of their families have received little explanation of how loved ones were preyed on. Via @maryhudetz.bsky.social @hannahbassett.bsky.social

Thank you for reading the article and sharing your kind words

Dozens of People Died in Arizona Sober Living Homes as State Officials Fumbled Medicaid Fraud Response Arizona officials acknowledged that a fraud scheme targeting Indigenous people with addictions cost taxpayers $2.5 billion. But they haven’t accounted publicly for the number of deaths tied to the sch...

New from @propublica.org: At least 40 Native residents of Phoenix-area sober living homes and treatment facilities died between the spring of 2022 and summer of 2024, amid a Medicaid fraud crisis.

@maryhudetz.bsky.social @hannahbassett.bsky.social, photography by @adrianazehbrauskas.bsky.social

Dozens of People Died in Arizona Sober Living Homes as State Officials Fumbled Medicaid Fraud Response Arizona officials acknowledged that a fraud scheme targeting Indigenous people with addictions cost taxpayers $2.5 billion. But they haven’t accounted publicly for the number of deaths tied to the sch...

Important story: Dozens Died in Sober Living Homes as Arizona Fumbled Fraud Response @maryhudetz.bsky.social and @hannahbassett.bsky.social @azcir.org

Grateful for @maryhudetz.bsky.social; our editors @bquester.bsky.social, @mgsquires.bsky.social, @charlesornstein.bsky.social; support from Report for America and Carter Center; and research and reporting contributions from @propublica.org's @mariamelba.bsky.social and @nicolesantacruz.bsky.social.

Thank you to the numerous sources who helped make it possible by sharing their time and trust.

We also reviewed hundreds of page of court documents, medical examiner reports, and agency records—many of which we obtained with the help of @reporterscommittee.bsky.social.

Dozens died in sober living homes as Arizona fumbled fraud response Arizona officials acknowledged that a fraud scheme targeting Indigenous people with addictions cost taxpayers $2.5 billion, but haven't accounted publicly for the deaths tied to the scheme.

Read the full story to learn more about Jeffrey and the decision making among Arizona’s leaders as they fumbled their response to what is now recognized as one of the largest fraud schemes of its kind in US history. ⤵️
azcir.org/news/2025/01...

“The state of Arizona owes our tribal nations an apology,” AZ AG Kris Mayes said in May 2023.

Jeffrey’s family never received an apology or acknowledgement of their loss. They continue to grieve.
📸 @adrianazehbrauskas.bsky.social

The Medicaid leader Gov. Hobbs appointed also stalled a key reform, before state officials ultimately announced a sweeping crackdown in May 2023, nearly five months after Jeffrey had died.

During the Duchy admin., spending on the American Indian Health Program skyrocketed from roughly $690 million to nearly $1 billion. The Medicaid agency knew its members were being targeted but scrapped a reform that would later help curtail rampant fraud.

Behavioral health fraud — and the targeting of Native Americans — grew during the administrations of both Republican Gov. Doug Ducey and Democratic Gov. Katie Hobbs, despite repeated warnings, our reporting found.

Around the time of Jeffrey's death, some behavioral health providers were increasingly exploiting the state Medicaid agency's American Indian Health Program, an insurance option for tribal citizens.

As Jeffrey moved from one sober living home to another for more than a year, state leaders failed to act on growing evidence that rampant fraud was imperiling Native Americans insured by the state Medicaid program.

Jeffrey died in a sober living home on Dec. 27, 2022.

Jeffrey’s family was hopeful he would get better. Instead, he got worse, his family said, as he got caught up in a murky network of treatment programs in the Phoenix area.

Jeffrey Hustito is among the victims. From Zuni Pueblo in New Mexico, Jeffrey traveled to Arizona in 2021 to seek treatment for alcoholism.
📸 @adrianazehbrauskas.bsky.social