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Estimated $650 million stolen through Medicaid in sober living home fraud schemes targeted at native tribes

The City of Tempe provided an update on the ongoing sober living fraud crackdown related to claims by Native American leaders alleging individuals were being forcefully taken to sober living facilities against their will to take advantage of Medicaid benefits.

The allegations stem back to 2019. 

The update was presented at the Human Services and Community Safety Committee Meeting on Oct. 4.

Director of Community Health and Community Services Tim Birch presented new statistics that estimated $650 million in fraud came from a scheme at various facilities last year. 

Birch also revealed that of the over 5,000 victims that have been identified so far, 50% of the victims were affiliated with tribes. 

While recognizing that many facilities have participated, Birch specifically said Newfound Hope Wellness & Detox Center committed sober living fraud.

Councilmember Doreen Garlid, the council’s lone Native American member, expressed her support for the crackdown. “These are hazardous facilities, the ones that are not legal, and that does make us concerned,” she said.

Garlid even referred to cases of fraud involving children: “One of the billings that is being sent into the Native American Health Service is where they listed and found a 4-year-old child in a sober living facility for alcoholism,” she said. “They’re just using people that have census numbers.”

Councilmember Joel Navarro also voiced his support for the crackdown. “I'm not trying to say that sober living is bad. We just need to ensure they're good neighbors,” Navarro said. “What has been highlighted is how we navigate the bad players and how we start to eliminate those practices from our city and state.” 

Despite this, Birch also recognized many sober living homes are doing good work in Arizona. “So often we shorthand this on sober living, and I just want to make sure that we mention that there are some good providers in the region and our community.” 

Birch also referenced ongoing efforts from the Community Health and Community Services office to increase awareness of the issue by contacting local schools and meeting with students to identify their needs and to help ensure they do not become victims. 

Newfound Hope Wellness & Detox Center did not respond to a request for comment.

The City of Tempe will continue to update the city council and the public as ongoing investigations from the FBI and Arizona Attorney General’s Office continue. 

People who have been taken advantage of by a sober living facility that hasn’t provided the needed treatment can dial 2-1-1 and select option seven to find help.

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