The director of Arizona’s embattled Medicaid company resigned this week, simply as she was anticipated to face questions from lawmakers about her dealing with of a large fraud scheme that largely focused Native Individuals.
Gov. Katie Hobbs, a Democrat, introduced Wednesday that she had accepted the resignation of Carmen Heredia, director of the Arizona Well being Care Price Containment System. The governor lauded Heredia’s management of the company whereas blaming Republican lawmakers for politicizing the affirmation course of, saying it had change into clear they’d not verify Heredia’s nomination.
Sen. Jake Hoffman, a Republican and chair of the Senate’s Committee on Director Nominations, mentioned in an announcement that in responding to the fraud scheme, Heredia had “poorly executed” the suspensions of lots of of behavioral well being suppliers. Heredia had served as the top of AHCCCS with out Senate affirmation since early 2023, a number of years after officers say the fraud possible started throughout the Republican administration of former Gov. Doug Ducey. Within the yr earlier than Heredia turned director, information present that officers had been warned that the fraud was harming sufferers, however they struggled to reply and didn’t alert the general public, which Heredia did together with different state leaders in Might 2023.
(Earlier this yr, a spokesperson for Ducey didn’t touch upon missed alternatives to cease the fraud however mentioned that the previous governor went to nice lengths to help in Hobbs’ transition.)
Below Heredia’s management, AHCCCS withheld cost to greater than 300 companies because the company investigated allegations that they had been fraudulently billing Medicaid for therapy companies. Usually, the companies had not been supplied, and enterprise house owners had been accused of permitting sufferers to proceed the substance use that they had hoped to beat via therapy.
In an announcement, Heredia mentioned she submitted her resignation with a heavy coronary heart and expressed concern {that a} partisan agenda had resulted in professionals being dragged “via profession damaging hearings.” Two years in the past, Senate Republicans derailed the nomination of one in every of Hobbs’ earlier picks to guide the well being division.
Final September, greater than a yr after the crackdown started, the Arizona Heart for Investigative Reporting and ProPublica reported that the suspensions had rendered sufferers homeless. Victims of the scheme, some from different states, had been additionally left with out entry to the drug and alcohol therapy they had been in search of.
Over a number of years, companies throughout a lot of Arizona, however largely in Phoenix, reaped large Medicaid reimbursements by enrolling Native Individuals of their applications and billing the state’s American Indian Well being Program at exorbitant charges for companies, like counseling periods. (The AIHP is a Medicaid insurance coverage choice that, till the fraud was found, had no set restrict on the sum of money suppliers might invoice for companies.)
At a information convention Thursday, Lawyer Normal Kris Mayes, a Democrat, mentioned there had been greater than 100 indictments and 25 convictions up to now associated to the scheme. She additionally mentioned she anticipated extra indictments to return.
AHCCCS mentioned over the previous two years that officers’ prime precedence was affected person security, and in Might 2023, the company arrange a hotline for victims. It supplied transient resort stays for folks displaced from shuttered amenities. Nonetheless, AHCCCS mentioned final yr that it had no report of what occurred to a majority of the hotline’s then 11,400 callers, largely as a result of after six months it had stopped monitoring outcomes for individuals who didn’t keep in a resort. In line with accessible knowledge, greater than 575 folks ended up with out housing as of final September. AZCIR and ProPublica additionally discovered that not less than 40 Indigenous residents of sober dwelling houses and therapy amenities within the Phoenix space died because the state fumbled its response.
A handful of the suspended suppliers, out of lots of investigated, had been allowed to renew billing Medicaid after clearing allegations with the state. However they mentioned the suspensions nonetheless pushed them to the brink financially and upended their sufferers’ care, AZCIR and ProPublica discovered. Consequently, Heredia’s swift and aggressive response to the disaster — which authorities mentioned was wanted to root out fraud and save lives — induced issues that behavioral well being care, particularly for Native Individuals, was more and more tough to entry.
“Below Katie Hobbs’ management, Heredia’s response has been extremely disturbing, to say the least,” Hoffman mentioned. “We’re left with a damaged system as a consequence of Heredia’s mismanagement, and our susceptible populations are caught up on this collapse.”
A spokesperson for Senate Republicans declined a request for an interview with Hoffman.
Whereas Hoffman’s assertion largely targeted on the fraud scheme that authorities say value the state $2 billion, he mentioned he additionally took concern with different issues inside AHCCCS involving long-term care.
Along with Heredia’s resignation, Jennifer Cunico, the director of the Arizona Division of Well being Companies, additionally stepped down this week. Like Heredia, Cunico was set to look earlier than lawmakers for a affirmation listening to. Cunico mentioned she was happy with her work on the division however made the tough choice to withdraw her nomination after it turned clear she wouldn’t be confirmed both. Her resignation comes two years after Hobbs’ earlier decide to guide the well being division withdrew her nomination following a heated affirmation listening to.
Hoffman mentioned Cunico had defended public well being officers’ pandemic response throughout conferences with lawmakers however didn’t present particulars. Hoffman beforehand sponsored laws that prohibited state and native businesses from enacting vaccine mandates.
The governor defended Heredia’s response to the fraud disaster and mentioned each Heredia and Cunico had labored on a variety of initiatives, together with bettering entry to maternal well being care.
“Carmen Heredia helped root out a multi-billion greenback wave of Medicaid fraud and the associated humanitarian fallout which the earlier administration ignored,” Hobbs mentioned in an announcement. “Her work to remove waste, fraud, and abuse in our healthcare system is a mannequin for the nation, and he or she all the time ensured individuals who wanted assist continued to get it.”
She added, “The Senate’s unprecedented politicization of the director affirmation course of has ended the directorship of two healthcare professionals who’ve made our state authorities run extra effectively and extra successfully.”
Christopher Lomahquahu, an investigative reporter and Roy W. Howard fellow for AZCIR, contributed reporting.
