Facing Rejection, Hobbs Accepts Resignations of AHCCCS Director, ADHS Director

Governor Katie Hobbs has withdraw her nominees to oversee the Arizona Health Care Cost Containment System (AHCCCS) and Arizona Department of Health Services (ADHS).

According to Hobbs’ office, “AHCCCS Director Carmen Heredia and ADHS Director Jennie Cunico resigned after it became clear to the Governor’s Office that the Senate Majority will refuse to confirm their nominations.” 

“Today’s announcement is a testament to the important work being conducted on behalf of the citizens of Arizona by the Senate Committee on Director Nominations. I’m pleased Katie Hobbs saved herself, and AHCCCS Director Nominee Carmen Heredia, from the embarrassment of advancing her through the scheduled hearing this week,” said Senate Director Nominations Committee Chair Jake Hoffman. “Under Heredia’s direction, AHCCCS mismanaged the procurement process and improperly awarded contracts for healthcare services for thousands of elderly and physically disabled individuals enrolled in the Arizona Long Term Care System. A judge described the process as ‘arbitrary and capricious’ and recommended a full reset. Instead of responding to the feedback appropriately, Heredia basically told the judicial system to pound sand and moved forward with the contracts. Her refusal to provide transparency in this matter displayed nothing more than arrogance.”

“What’s even worse, Arizona is in the middle of a monumental Medicaid fraud crisis with a loss of more than $2 billion in taxpayer dollars,” continued Hoffman. “Under Katie Hobbs’ leadership, Heredia’s response has been incredibly disturbing, to say the least. Patients in sober living homes were evicted from facilities overnight after AHCCCS poorly executed suspensions of more than 300 providers. Many of these patients were mid-treatment, detoxing, or severely mentally ill and were dropped off on the streets with no identification or transportation. Legitimate providers were caught up in the mess without AHCCCS providing explanations or due process. Some are still waiting to be reinstated or reimbursed. We are left with a broken system due to Heredia’s mismanagement, and our vulnerable populations are caught up in this collapse.”

“Since its inception, the Committee on Director Nominations has been committed to honestly, thoroughly, and accurately vetting Katie Hobbs’ nominees. We have served as Arizonans’ last line of defense against incompetent, unqualified, and highly partisan picks to lead state agencies. We will continue to do the hard work the citizens of Arizona expect of us and will only approve competent, non-partisan individuals to serve in these critical roles,” stated Hoffman. “We look forward to Katie Hobbs sending us a sensible leader that will be able to rein in the abuse that has occurred at AHCCCS.”

“Unfortunately, the Senate’s unprecedented politicization of the director confirmation process has ended the directorship of two healthcare professionals who have made our state government run more efficiently and more effectively,” said Hobbs. “The people of Arizona are tired of the relentless politics that has undermined good governance in the name of partisan retribution. It should not matter whether the leaders of our state government are Democrats or Republicans; it should matter that our state is run by public servants who do what’s right for everyday people. That is the leadership that Carmen Heredia and Jennie Cunico showed. But that is not what the people of our state can expect from the Senate majority.”

Hobbs accused Hoffman of engaging in a “partisan witch hunt prior to the nominees’ hearings, requesting public records dating back to 2020.”

“It is with a heavy heart that I tender my resignation as Director of the Arizona Health Care Cost Containment System (AHCCCS),” said Carmen Heredia. “Serving the people of Arizona — especially our most vulnerable — has been one of the greatest honors of my professional life. However, it has become increasingly difficult to carry out this mission in good faith under the current political climate. I am deeply concerned about the escalating politicization of state agency leadership roles under the Republican-led Legislature. The intrusion of partisan agendas that drag professionals through career damaging hearings is not an effective way to attract and retain qualified people in these critical roles and has made it increasingly challenging to serve Arizona agencies effectively.

“I believe public service should be about people — not politics. When political theater begins to outweigh sound policy and when governance is shaped more by ideology than by data and facts, outcomes suffer. And those who suffer most are the individuals and families who rely on Medicaid for essential health care services,” concluded Heredia.

“The decision has been a difficult one for me to make, as I am extremely proud of the work that has occurred during my tenure and the relationships I’ve built during my time as Director,” said Jennie Cunico. “However, it is clear to me that there is no path forward to confirmation. I want to express my appreciation for your trust in naming me to the Director position, and for the opportunities I’ve had to grow professionally over the past two years. It has been an honor to serve the State in this capacity and to work with the team at ADHS who consistently demonstrate an unwavering dedication, brilliance, and compassion each day to promote and protect the health and wellbeing of all Arizonans.”