Gov. Hobbs: Arizonans should be ‘outraged’ at the sober living home scandal

Gov. Katie Hobbs delivers her State of the State address on Jan. 8. (Photo/Gloria Rebecca Gomez, Arizona Mirror)

Gov. Katie Hobbs delivers her State of the State address on Jan. 8. (Photo/Gloria Rebecca Gomez, Arizona Mirror)

PHOENIX — Gov. Katie Hobbs said that Arizonans should be “outraged” by the sober living scandal that continues to victimize people across the state, particularly Native Americans.

The massive fraud scandal has ruined countless lives, Hobbs said, and cost taxpayers hundreds of millions of dollars.

“I’m proud we have taken action to crack down on this fraud, and I commend Attorney General (Kris) Mayes for investigating those who are exploiting some of our most vulnerable residents,” she added in her State of the State speech Jan. 8.

This is the first time that Hobbs has talked publicly about the continued impacts of the sober living scandal since addressing the issue in May 2023, when she and Mayes called it a “humanitarian crisis” and a “stunning failure of the government.”

For years, hundreds of facilities had recruited Indigenous Arizonans with the promise of providing treatment for substance abuse, but they instead bilked the state’s Medicaid program for hundreds of millions of dollars in services they never provided.

Since May 2023, the state has shut down hundreds of providers for behavioral health, residential, and outpatient treatment services.

The most recent case from Mayes’ office involving fraudulent facilities was announced on Dec. 6, when a grand jury indicted 10 people on charges of illegal control of an enterprise and other charges related to patient brokering.

The defendants allegedly ran unlicensed sober living or transitional living homes around the Valley. Those 10 people are accused of agreeing to send 75 patients, many of whom were on the American Indian Health Plan administered by AHCCCS, the state’s Medicaid program, to a fake behavioral health care facility.

The scam primarily targets Indigenous people who are enrolled in the American Indian Health Program as part of Medicaid so that the healthcare provider can bill the program, often for services they never provided.

“The individuals behind these scandals will be held accountable, but it is also apparent we need to provide additional tools to go after bad actors who take advantage of those in need.

Hobbs called on Arizona legislators to strengthen state standards for sober living homes and long-term care facilities and significantly increase penalties for bad actors.

Hobbs said she will put forward a “package of bills” that she hopes will ensure facilities cannot hide or erase their violation history, increase fines, standardize inspections, empower Adult Protective Services to seek emergency protection orders and establish standardized credentials for Alzheimer’s, dementia, and memory care.

“Protecting Arizonans in long-term care and sober living facilities shouldn’t be a partisan issue,” she said. “Let’s work together to support this legislation and continue to seek solutions so we can ensure every resident can live in safety, free from neglect and abuse.

Indigenous grassroots advocates have criticized the state’s lack of urgency and resources available for the people whom the sober living homes crisis has impacted.

When StolenPeoplesStolenBenefits Advocate Reva Stewart remembers local, state, federal, and tribal leaders making their public statements in May 2023, they said they would help the Indigenous people left on the streets after a sweeping crackdown on the fraudulent rehabilitation facilities in May 2023. But nothing has changed.

“You want accountability almost a year in, yet so many lives are we still being lost,” she said of Hobbs’ commitments made during her speech to address the sober living home fraud.

Stewart said the shutdowns are still happening, the recruiting of Indigenous people is still happening, and the deaths caused by the crisis are still happening.

She has been an advocate for Indigenous people being impacted by the sober living home crisis for over two years. She provides on-the-ground efforts with a handful of volunteers almost daily.

Her team does outreach by providing care packages, food, water, and transportation home or to a legitimate rehab facility in the area.

Hearing Hobbs call for legislative support on the sober living homes fraud does not surprise Stewart. Still, she said she feels that it won’t make a difference until local, state, federal, and tribal leaders all understand the issue is beyond fraud.

“Our Native people are going through genocide,” Stewart said. “They were targeted because they were Indigenous and brought into these homes because there was a loophole in that American Indian program.”

Stewart said she invites any of the leaders to come out and help with any of their outreach efforts because they’ll see firsthand the impacts the crisis has had on Indigenous people across the state.

“All we ever asked for is help,” she said.

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