Protecting the integrity of our healthcare system requires a proactive, coordinated approach to preventing, detecting, and addressing Fraud, Waste, and Abuse (FWA).
The work AHCCCS does in this area spans the full continuum of program integrity, beginning with efforts that mitigate risk before issues occur, such as robust reporting channels, audits, prior authorization, data analytics, policy changes, and provider training. When concerns do arise, AHCCCS takes decisive action through targeted interventions including Corrective Action Plans (CAPs), prepayment reviews, utilization management, humanitarian response strategies, and advanced analytical tools that identify patterns requiring deeper attention. When Credible Allegations of Fraud (CAF) are identified and confirmed as a final investigative outcome, a provider may face financial penalties, Medicaid exclusion, and be suspended or terminated.
Together, these efforts strengthen the Medicaid ecosystem, uphold accountability, and ensure resources are directed to the individuals and communities who need them most.
AHCCCS takes all forms of potential fraud, waste and abuse seriously, and its Office of the Inspector General (OIG) is now recognized as a national leader in addressing and preventing fraud. Below is a selection of accomplishments from 2025.
The AHCCCS sober living fraud scheme was an organized Medicaid fraud operation in Arizona that primarily targeted Native American individuals struggling with addiction. Since announcing the scale of the fraud in May 2023, AHCCCS has taken multiple decisive actions to protect members, restore trust, and strengthen oversight.
AHCCCS remains committed to transparency, accountability, and the well-being of our members. AHCCCS will continue working with Tribal Partners, law enforcement, and oversight agencies to ensure impacted individuals receive the care and justice they deserve.
Many of AHCCCS’ efforts to combat and prevent sober living fraud can be found in the presentations below which were developed for a series of special hearings hosted by the Arizona Senate’s Health & Human Services Committee.
Featured below are high-level trends depicting the trajectory of the sober living fraud crisis over time. The positive impact of the state’s actions beginning in 2023 is evident. While bad actors will inevitably continue searching for ways to exploit Medicaid, Arizona’s sober living fraud crisis has effectively ended. State spending on the American Indian Health Program, along with the number of behavioral health cases stemming from fraud referrals, have returned to pre-crisis levels.
In the wake of the fraud crisis, AHCCCS continues to engage with its providers to offer technical assistance, ensure proper payments, and promote an understanding of how to properly submit documentation to receive reimbursement for medically-necessary services. The agency also offers numerous training resources to ensure providers are fully informed about how to work with AHCCCS. As seen in the graphic below, the vast majority of behavioral health claims received by AHCCCS’ Fee-for-Service program are now able to be approved (87%, as of December 2025), with an average turn-around-time of 10.2 days.
Knowing fraudulent providers may not uphold their member continuity of care obligations, the State stood up a member/victims response effort including the creation of a hotline to assist victims affected by fraudulent providers.
Services include referral assistance, crisis response and assessment, temporary lodging, basic hygiene supplies, food (breakfast, lunch, dinner, snacks), and transportation to hotel lodging, medical appointments, school, and home, including out-of-state airfare and bus transport if required.
| Total Members Assisted | |
|---|---|
| Phone calls to 211*7 hotline for resources | 34,977 |
| Total Members Served | 11,557 |
| Hotel - Temporary Lodging | 4,147 |
| Out-of-state Transports | 125 |
A “Credible Allegation of Fraud” (CAF) payment suspension means that both AHCCCS and law enforcement have reviewed a provider’s billing records and have determined that, based on the evidence available, it is likely that the provider has engaged in intentionally deceptive practices for their own gain.
AHCCCS is required to stop paying a provider and to refer the case to law enforcement for a full investigation as soon as a CAF suspension is issued. Payment suspensions are temporary actions intended to protect public funds while a full investigation is ongoing.
The Current Providers Suspension List does not contain every provider who has been suspended. It only contains providers who are currently suspended. Providers are removed from the list when their suspensions are resolved.
A CAF Suspension may be “rescinded” if:
Review the Rescinding a Credible Allegation of Fraud one-pager for an overview of this process.
AHCCCS’ ability to issue suspensions is regulated under 42 C.F.R. § 455.23 and the terms of the Provider Participation Agreement, which indicate that AHCCCS may suspend payments to a provider if a Credible Allegation of Fraud (CAF) has been identified. Providers are informed of the reason for their suspension in a Notice of CAF Suspension. CAF suspensions are based on preliminary findings of reliable indicia of fraud and may be lifted if AHCCCS determines there is no fraud occurring and/or good cause has been established under 42 C.F.R. § 455.23. Because AHCCCS providers may serve both members and non-members, any concerns about quality of care are referred to the appropriate health care licensing and oversight boards.
See the Fact Sheet: AHCCCS Provider Payment Suspension for details of the provider payment suspensions announced in 2023.
See the Medicaid Fraud Allegations Process flier to learn more about steps involved in a Credible Allegation of Fraud payment suspension.
When a provider is suspended from Medicaid payment or terminated as a Medicaid provider (among other actions), they have due process rights to appeal the action. Learn more about the provider appeals due process in the Provider Termination Due Process Procedures flier.
The 4 Steps to Review Provider Credibility flier provides tools to check on provider registration and licensure. First check the AHCCCS Provider Listing tool for registered Medicaid providers. Then check the AHCCCS Provider Suspension list. If the provider is registered and not suspended, check for a license, deficiencies, and corrective actions at www.azcarecheck.com. You can also search for a provider’s professional license with the appropriate organization: Arizona Board of Nursing, Arizona Board of Behavioral Health Examiners, Arizona Medical Board (for doctors and physician assistants), or Arizona Board of Psychologist Examiners.
The Rescinding a Credible Allegation of Fraud one-pager is an overview of the process and the ways in which providers can have their payment suspension lifted.
| Status of Recommendations | ||
|---|---|---|
| Implemented | Implementing | |
| Member Recommendations: 2, 3, 4, and 5 | Member Recommendation: 1 | |
| Post-Payment Recommendations: 2, 3 ,4, 5, 6, 7, 8, 10, 11, 12*, 13, 15*, 16*, 17*, 18, 20 | Post-Payment Recommendations: 1, 9, 14, 19 | |
| Broad Initiative Recommendations: 1* | Broad Initiative Recommendations: 2*, 3* | |
For more information, review the official audit report.
In April 2023, AHCCCS contracted with an external auditor, Berry Dunn, to analyze AHCCCS data, identify trends, and make recommendations on how the agency can prevent fraud, waste, and abuse moving forward. This comprehensive audit reviewed both the agency’s claims and enrollment processes to ensure bad actors were prevented from entering the system or billing fraudulently.
As a result of the forensic audit, Berry Dunn made 25 programmatic recommendations to the agency, as well as three recommendations for broad initiatives. Of the 25 programmatic recommendations, AHCCCS has implemented 20, and is in the process of implementing another five (as of May 2024). AHCCCS is also implementing the three recommendations for broad initiatives through internal operational and staffing enhancements. Overall, the findings reinforced and provided external validation for the approach AHCCCS has taken to combat fraud and protect members from bad actors.
AHCCCS appreciates the role of journalists in upholding the public’s interest and right to be informed of the government's use of taxpayer dollars. We strive to be transparent, responsive, and informative, and to ensure that facts are delivered accurately and in a timely fashion.
Legal Actions:
Bad Actor Scheme:
Response Coverage:
In May 2024, AHCCCS launched a public awareness campaign that includes digital toolkits for Tribal members and leaders, and for frontline workers, that includes social media posts, influencer scripts, fliers, infographics, web banners, and wallet card.
Toolkits:
Tribal Outreach Toolkit
Frontline Worker Toolkit
In addition, AHCCCS launched a new Tribal Resources web page to help educate members, providers, and others about the red flags when it comes to fraudulent providers, and to provide valuable resources to empower Tribal members. Visit www.azahcccs.gov/TribalResources for more information.
The AHCCCS Virtual Assistant (AVA), is a chatbot on the AHCCCS website and AHCCCS Online portal, has expanded capabilities to answer common provider questions on enrollment, Fee-for-Service (FFS) claims, and FFS prior authorization, as well as transfer to a live agent during business hours (Monday - Friday, 8 a.m. - 4:30 p.m., excluding state holidays).
AHCCCS Provider ConnectAHCCCS Provider Connect is a tool that can text and email providers or the credentialing representative at important enrollment points, including revalidation and license expiration.
AHCCCS has published the Covered Behavioral Health Services Guide (CBHSG) with an effective date of 10/1/2024.
Please submit all questions via email to CBHSGCodingQuestions@azahcccs.gov. Questions will only be gathered via this email box.
The guide has been published to the Medical Coding Resources web page and can be found under the Behavioral Health Service Matrix and Guide drop down menu.
