by Hannah Bassett, Arizona Center for Investigative Reporting, and Mary Hudetz, ProPublica, photography by Adriana Zehbrauskas, special to ProPublica
ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.
Reporting Highlights
- A Medicaid Crisis: A probe of substance treatment programs prompted Arizona authorities to end contracts with hundreds of clinics. This, in turn, left some patients without treatment.
- Unsheltered Patients: Data from a state hotline for displaced patients shows more than 575 callers ended up unsheltered, which further increased their chances of relapse or even death.
- Providers’ Struggles: Some clinics that were eventually cleared by the state tried to continue treating patients without compensation but said it pushed them to the brink financially.
These highlights were written by the reporters and editors who worked on this story.
Before her fifth birthday, Rainy had experienced a lifetime of trauma. As an infant, she witnessed violence at home before child welfare authorities intervened and her parents were incarcerated. Night terrors followed. Then, she endured the death of her great uncle who had taken on the role of dad.
She didn’t speak until she was nearly 5. Any separation from her great aunt-turned-adoptive mother, Lisa Enas, triggered panic attacks, and reminders of her great uncle’s death left her nearly inconsolable.
With counseling, however, Rainy, now age 7, with a long, thick braid and a bright smile, grew more joyful and independent. She could hold conversations and spend time away from Enas without panicking. She was selected for her school’s gifted and talented program. Home life on the Gila River Indian Community in Arizona, where her bedroom walls were lined with stuffed animals and family photos, steadied.
But that progress came to a halt last October, after a spiraling Medicaid scandal that targeted thousands of Native Americans exploded into public view.
Arizona officials announced they were investigating a massive fraud scheme in which people had been lured into fake substance abuse treatment programs, where providers exorbitantly billed Medicaid for treatments they did not deliver. Some were alleged to have kidnapped patients and held them against their will. The fraud has cost the state as much as $2.5 billion since 2019, state officials said.
In response, the Arizona Health Care Cost Containment System, or AHCCCS, terminated contracts with scores of facilities as authorities investigated them. The agency also swiftly suspended Medicaid reimbursements to hundreds of other providers that it accused mostly of overbilling or paperwork errors. Among those suspended was Desert Rain Behavioral Health Services, the Tempe provider that was treating Rainy and 260 other patients, all insured by the state Medicaid agency’s American Indian Health Program.
AHCCCS accused Desert Rain of overbilling and failing to have the license needed to treat children — allegations that the clinic would eventually resolve, but not before its ability to care for patients was disrupted.
When AHCCCS launched its investigation, officials said their top priority was the safety of patients like Rainy. Yet even as the agency says it considered whether people would lose behavioral health services before it took action, its efforts left hundreds without treatment or counseling, the Arizona Center for Investigative Reporting and ProPublica have found.
The agency told the very behavioral health providers it accused of fraud that it was their responsibility to ensure patients continued to receive treatment, despite halting their reimbursements. Some closed. Others scaled back services or paid out of their own pocket while they challenged the allegations against them.
For patients, the state established a hotline to connect them to treatment, housing or transportation back to their communities. But it too has fallen short in addressing the fallout from the crisis.
AHCCCS said it had no record of what happened to the majority of the hotline’s 11,400 callers, largely because after six months it stopped tracking outcomes for people who did not stay in a hotel at the state’s expense. Of 4,100 people who received temporary lodging after calling the hotline, the state said only about 150 requested referrals to behavioral health centers. According to call data obtained by the news organizations, more than 575 ended up unsheltered, increasing their chances of relapse or even death.
In an interview, Marcus Johnson, AHCCCS’ deputy director of community engagement and regulatory affairs, said AHCCCS conducted outreach to make sure patients knew about the hotline. Yet advocates say far more people were unaware of the hotline or could not call it because they did not have phones.
“There’s always opportunity for us as an agency to improve,” Johnson said. “But like I said, we’ve done a great amount of outreach to try to get the word out as much as possible, not only to victims and our members, but also to all of the providers.”
Enas, Rainy’s adoptive mother, said no one ever told her about it as she struggled to find counseling for her daughter. (AZCIR and ProPublica are identifying Rainy, who does not share a last name with Enas, by her nickname to protect her privacy.)
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