Fraudulent Sober Homes Exploited Native Americans, Say Authorities

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For months, state and federal law-enforcement officials have been investigating a Medicaid scam in which hundreds of fraudulent sober-living homes in the Phoenix area have recruited Native Americans from across the West. Working with rehab facilities, the businesses charged the state millions of dollars for addiction services they didn’t provide, according to authorities.

Several thousand Native Americans, some from as far away as Montana, might have been lured to the Arizona homes, according to officials. Instead of getting help, some reported rampant drug use and drinking in the homes and little in the way of rehab.

Others told authorities that they were barred from contacting friends or relatives, some of whom had no idea where they were. Several tribal members told The Wall Street Journal they were offered payment by the operators of the homes to recruit other Native Americans.

According to Arizona Attorney General Kris Mayes, the amount of Medicaid reimbursement money the state paid out to facilities under the billing code used for substance-abuse treatment jumped from $53 million in fiscal year 2019 to $668 million in fiscal year 2022. While those totals include payments to legitimate operators, Mayes said it was the extreme growth that signaled to authorities something was amiss.

About 250 rehab providers in Arizona have been suspended from the state’s Medicaid program this year while investigators assess whether they defrauded the government. The list includes at least one of the places where Anagal sought treatment.

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