Arizona AHCCCS (Medicaid) · October 24, 2026 · Primary source
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Summary
On May 16, 2023, Arizona Governor Katie Hobbs, Attorney General Kris Mayes, and the AHCCCS Office of Inspector General announced payment suspensions against more than 100 registered behavioral health Medicaid providers based on credible allegations of fraudulent billing, with parallel investigations by the Arizona AG's Healthcare Fraud and Abuse Section, FBI, HHS, USAO, and IRS. The suspected fraud involved significant increases in outpatient behavioral health service billing connected to alleged criminal activity targeting tribal communities and sober living home residents. Under federal regulations, AHCCCS is required to suspend all payments to a provider upon a credible allegation of fraud determination, with withheld reimbursements held pending investigation outcomes. AHCCCS simultaneously announced system-wide reforms including reclassification of three behavioral health provider types to high-risk status.
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