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 an enormous fraud scheme that largely focused Native People.
Gov. Katie Hobbs, a Democrat, introduced Wednesday that she had accepted the resignation of Carmen Heredia, director of the Arizona Well being Care Value Containment System. The governor lauded Heredia’s management of the company whereas blaming Republican lawmakers for politicizing the affirmation course of, saying it had turn out to be 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 tons of of behavioral well being suppliers. Heredia had served as the pinnacle 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 12 months earlier than Heredia grew to become director, data 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 12 months, 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.)
Beneath Heredia’s management, AHCCCS withheld fee to greater than 300 companies because the company investigated allegations that they had been fraudulently billing Medicaid for therapy providers. Usually, the providers had not been supplied, and enterprise homeowners had been accused of permitting sufferers to proceed the substance use that they had hoped to beat by way of 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 “by way of profession damaging hearings.” Two years in the past, Senate Republicans derailed the nomination of one among Hobbs’ earlier picks to steer the well being division.
Final September, greater than a 12 months 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 searching for.
Over a number of years, companies throughout a lot of Arizona, however largely in Phoenix, reaped big Medicaid reimbursements by enrolling Native People of their packages and billing the state’s American Indian Well being Program at exorbitant charges for providers, like counseling periods. (The AIHP is a Medicaid insurance coverage choice that, till the fraud was found, had no set restrict on the amount of cash suppliers may invoice for providers.)
At a information convention Thursday, Legal professional Common Kris Mayes, a Democrat, mentioned there had been greater than 100 indictments and 25 convictions thus far associated to the scheme. She additionally mentioned she anticipated extra indictments to come back.
AHCCCS mentioned over the previous two years that officers’ high precedence was affected person security, and in Might 2023, the company arrange a hotline for victims. It supplied temporary resort stays for individuals displaced from shuttered services. Nonetheless, AHCCCS mentioned final 12 months 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 accordance with accessible knowledge, greater than 575 individuals ended up with out housing as of final September. AZCIR and ProPublica additionally discovered that at the least 40 Indigenous residents of sober dwelling properties and therapy services within the Phoenix space died because the state fumbled its response.
A handful of the suspended suppliers, out of tons 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 — triggered considerations that behavioral well being care, particularly for Native People, was more and more tough to entry.
“Beneath Katie Hobbs’ management, Heredia’s response has been extremely disturbing, to say the least,” Hoffman mentioned. “We’re left with a damaged system resulting from Heredia’s mismanagement, and our weak 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 price the state $2 billion, he mentioned he additionally took difficulty 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 pleased with her work on the division however made the tough determination to withdraw her nomination after it grew to become clear she wouldn’t be confirmed both. Her resignation comes two years after Hobbs’ earlier choose to steer 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 companies 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 enhancing 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 she or he at all times 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.
