The state of Arizona is facing a legal battle regarding a Medicaid fraud scam that targeted approximately 7,000 Native Americans and left possibly 2,000 dead or missing.
A lawsuit accuses the state of enabling the fraud linked to licensed group homes that were supposed to help patients suffering from addiction and behavioral health issues, News Nation reported Thursday.
The state’s American Indian Health Program allowed registered providers to bill Medicaid for services to Native Americans. But according to attorneys John Brewer and Dane Wood, fraudsters exploited the system to target victims in Arizona, Utah, Idaho, New Mexico, Montana, and the Dakotas.
The fraudsters, according to the attorneys, took those individuals to the facilities and billed Medicaid for their treatment. However, the victims rarely received any treatment.
Brewer told News Nation, “It clearly is a human trafficking [scheme] and not just a Medicaid fraud scheme. They were held against their will, they were given drugs, they were given alcohol… their phones were taken away.”
The Associated Press (AP) in 2023 reported authorities said the fraudsters used the money for lavish lifestyles:
The scams’ far-reaching consequences are now becoming known as warnings are sounded by state and tribal governments outside Arizona, as well as Montana’s U.S. Sen. Jon Tester, a Democrat, and Gov. Greg Gianfonte, a Republican.
Arizona Gov. Katie Hobbs and Attorney General Kris Mayes — who has said authorities believe a Nevada-based criminal syndicate launched the first scams — in May announced they were stepping up an investigation on fraudulent Medicaid billing begun before they took office in January.
The article noted the scams proliferated amid the Chinese coronavirus lockdowns when many rules were relaxed, placing communities at risk.
Fraudsters allegedly approached victims in public areas such as gas stations, grocery stores, and bus stops, according to News Nation. Those individuals promised their targets they would give them food, shelter, and treatment before placing them inside unmarked vans.
Some victims left the facilities addicted to more substances because their dependency meant more money for the fraudsters, the outlet continued:
The lawsuit alleges AHCCCS, Arizona’s Medicaid agency, first learned of the fraud in July 2019, when a whistleblower reported irregular billing tied to a company called Henson Family Services. By 2020, unlawful payments tied to the scheme totaled about $43 million, according to the complaint.
Despite the 2022 warning memo, the state took no immediate action, the lawsuit alleges, and fraudulent payments ultimately ballooned to roughly $2.8 billion by 2023.
Brewer and Wood have since claimed no suspects have been charged with negligent homicide or manslaughter regarding victims who died.
In 2023, the National Indian Council on Aging, Inc. said some of the victims taken to the facilities jumped out of windows and climbed over walls to escape.
Navajo advocate Reva Stewart, whose cousin was also reportedly a victim of the scam, recently told News Nation white vans had been observed driving around tribal communities.
She also said some of the facilities housing the victims were locked from the outside, adding, “They weren’t treatment homes. They were traps.”
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