The state of Arizona is battling with a devastating sober living crisis, where $2.8 billion was stolen from the state’s Medicaid system through fraudulent billing for behavioral health services. A class action complaint has been filed against Arizona’s Medicaid agency (AHCCCS) and the Department of Health, accusing them of gross negligence and wrongful death. The fraud, which grew from $43 million to $2.8 billion, primarily impacted Native Americans, leading to homelessness, addiction, and in some cases death. Lawyers argue the state was aware of the problem since 2019 but failed to act, allowing the crisis to worsen.
Fraudulent operations exploited vulnerable individuals across Arizona and New Mexico, with many victims lured across state lines to take advantage of Medicaid benefits. The plaintiffs are each seeking over $300,000 in damages, blaming the state for not addressing the fraud sooner and failing to protect its citizens. While Arizona has taken steps to address the issue and crack down on fraudulent providers, critics argue more should have been done to prevent the harm caused.
The complaint highlights the state’s systemic failure to prevent the crisis, with advocates continuing to help displaced individuals. Despite some action, the scale of the disaster remains a pressing issue for the state to resolve.
This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.
