In Arizona, a class action lawsuit alleging Medicaid fraud and corruption within state agencies is advancing, as victims seek justice and accountability.
The fraudulent activities, which began in 2019, have reportedly led to a staggering loss of $2.8 billion from the state’s Medicaid system. This was achieved by billing for rehabilitation services that were never provided.
The fraud predominantly affected Native Americans under the American Indian Health Plan fee for service program managed by the Arizona Health Care Cost Containment System (AHCCCS).
The state has sought to dismiss the lawsuit, which was initiated in 2024.
According to attorney Dane Wood, around 2,000 individuals died in fraudulent sober living homes.
In May, the state Supreme Court denied the latest attempt to have the case dismissed.
Attorneys Dane Wood and John Brewer have criticized state officials’ claims of significant progress in addressing fraud, pointing out the limited number of prosecutions and convictions.
They described the state’s media releases and events as “political infomercials.”
“Billions lost and only a handful go to prison, thousands injured and again only a small handful go to prison, there’s something wrong with that,” Wood said Friday.
The legal team contends there is undeniable proof of corruption within AHCCCS and the Arizona Department of Health and Human Services (ADHS).
“We have crystal clear evidence of corruption within AHCCCS. From the application process, to the inspections, and also within DHS, to the payment process. Without question,” Brewer stated.
Brewer also claims that other state officials are aware of this corruption.
“The people that we know that were corrupt are still employed at AHCCCS. They’re still there. And they’re still conducting their jobs. And I believe that the state, sorry, I got to speak up, I believe that the state knows this,” Brewer said.
A spokesperson for the Attorney General’s Office declined to comment on those claims.
The attorneys highlighted the ongoing case of LaRoie Davis, a former DHS employee, who was charged in 2024 with theft, forgery, money laundering, conspiracy, and other crimes.
They also mentioned Farrukh Ali, who is accused of defrauding Medicaid of $650 million. Ali is believed to have left the country, potentially avoiding trial.
“How can this one man rip off AHCCCS $650 million without somebody having oversight of the checks that are going out the door every day, every week, every month, and then it builds up into years of activity?” Brewer asked.
Brewer and Wood are collaborating with victim advocate Reva Stewart, who has long supported victims of Medicaid fraud. Stewart hopes the lawsuit will compel the state to take responsibility.
“In this case, every person who has dealt in AHCCCS and ADHS is wrong because nobody wants to actually say, ‘I was wrong. I did it. It’s my fault,’” Stewart expressed.
