Quarles & Brady Partner Kirti Reddy’s article for the American Health Law Association addressed Arizona’s uncovering of one of the largest behavioral health fraud schemes in the United States. The scheme specifically targeted homeless individuals and/or Native Americans for fraudulent substance use treatment. Reddy, who co-chairs the firm’s Government Enforcement Defense and Investigations team, outlined that the fraud encompassed two major categories: fraudulent billings by behavioral health treatment providers and patient brokering.
In 2023, Arizona exposed the extensive behavioral health fraud scheme that preyed on homeless individuals and/or Native Americans by offering them fraudulent substance use treatment. The organizers of the scheme enticed victims with bribes such as providing them housing in unlicensed “sober living” homes and enrolling them into Arizona’s American Indian Health Program, even if they were not Native Americans. The victims were then sent to behavioral health treatment centers, not for the purpose of receiving proper treatment, but simply so that the treatment centers could bill for services to the Arizona Health Care Cost Containment System (AHCCCS).
Reddy’s article shed light on the two major categories of fraud that the scheme fell into. Firstly, there were fraudulent billings by behavioral health treatment providers, where the treatment centers billed for services to AHCCCS without providing proper treatment to the victims. Secondly, there was patient brokering, where individuals were referred to addiction treatment providers in exchange for payment. These revelations about the fraudulent scheme in Arizona are significant, as they highlight the extent to which vulnerable populations were targeted for financial gain.