Arizona Senate Set To Study Medicaid Fraud And Abuse

The Senate Health & Human Services Committee will hold a special hearing to address the rise in Medicaid fraud, abuse, and waste across the state.

Arizona Health Care Cost Containment System (AHCCCS), Arizona’s Medicaid agency, has been racked with scandal.

Arizona State Senator Janae Shamp supports the hearing, but said that she had hoped they would have held it prior to passing a budget this legislative session.

This is very necessary.  I wish it had taken place when we first raised concerns and brought the matter to the public’s attention, and it should have happened before the budget process, but better late than never.  The fraud we’re talking about is costing Arizona BILLIONS and it… https://t.co/GzGnCbVukt

— AZ Senator Formerly Known as Majority Leader (@AZSenatorShamp) July 11, 2025

The special hearing comes in response to the growing reports of fraudulent billing, unnecessary treatment claims, and corrupt referral practices within AHCCCS.

Many of the fraud claims are tied to Residential Treatment Facilities, also known as “sober living homes.” One particularly egregious case involved Farukh Jara Ali, owner of ProMD, a company operating out of Pakistan. Ali was recently indicted for $650 million in fake Medicaid claims. Additionally, reports regarding Residential Treatment Facilities schemes allege patients were bribed and directed to specific facilities or providers who, in turn, those fraudulently billed Medicaid for services that were either not provided or medically unnecessary. Particularly troubling is the pattern of targeting Native American patients who are promised treatment under but are exploited in schemes that prioritize kickbacks over care.

7 Defendants In Arizona Cases Charged In National Health Care Fraud Takedown

Congress recently passed the “One Big Beautiful Bill,” aimed at protecting and strengthening Medicaid for those who rely on it — pregnant women, children, seniors, people with disabilities, and low-income families—while eliminating waste, fraud, and abuse. The One Big Beautiful Bill’s proponents argue that it will protect and strengthen Medicaid by removing individuals not legally eligible for the program, enforcing work requirements for able-bodied adults, and eliminating waste, fraud, and abuse.

The bill includes measures such as pausing the implementation of certain Biden-era rules related to eligibility and enrollment to re-assess program integrity concerns, tightening eligibility redetermination rules, and requiring enhanced data matching to reduce duplicate enrollments and identify deceased individuals on the rolls. The bill also aims to curb state financing abuses, referred to as “Medicaid money laundering,” by implementing stricter rules on provider taxes and phasing down the hold-harmless threshold in Medicaid expansion states.