By Matthew Holloway |
Arizona House Republicans are calling on Gov. Katie Hobbs to pursue a federal data-sharing agreement intended to help investigators identify Medicaid and other public-benefit fraud by finding connections between government benefit payments and complex business records.
House Majority Leader Michael Carbone (R-LD25) and House Health and Human Services Committee Chairman Selina Bliss (R-LD1) issued the request Monday following the Justice Department’s announcement of new cooperation agreements with several southeastern states.
The Justice Department’s National Fraud Enforcement Division announced the agreements July 30 as part of a wider federal-state initiative involving Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina.
Secretaries of state from Alabama, Florida, Georgia, Louisiana, Mississippi, and South Carolina entered data-sharing agreements giving the division access to publicly available corporate-registration and public-benefit payment information held by their agencies. State treasurers from Florida, Mississippi, and South Carolina also joined the agreements.
Federal investigators plan to use the data to identify patterns connecting business entities with public-benefit payments and trace financial activity through shell companies, layered business structures, and related entities. The department encouraged other states to pursue similar partnerships.
“Arizona families work hard and pay their taxes, and they have every right to expect that not one dollar of their money ends up in the pocket of a fraudster,” Carbone said. “Six states have already signed up to help catch the criminals stealing from taxpayers and from the people these programs are supposed to serve. There is no good reason Arizona should not be next, and no good reason for Governor Hobbs to wait.”
“Arizona’s most vulnerable families should not pay the price for fraud and inaction,” he added. “Arizona taxpayers have already lost billions of dollars, and the Justice Department has given states a practical way to identify suspicious payments and business connections earlier. Governor Hobbs should begin the process today.”
Carbone proposed that Arizona begin with a two- or three-year memorandum of understanding that would preserve state control over the information and allow officials to evaluate the partnership’s results.
“Every dollar siphoned off by fraudsters is a dollar that does not reach an Arizona family who needs it,” Bliss said. “We have seen billions lost to sober living scams and phantom behavioral health clinics right here in our state, and Arizona has been named one of the riskiest states in the country for this kind of abuse.”
The Republican lawmakers did not specify which Arizona agencies would enter the agreement or which categories of public-benefit information would be shared.
Unlike the participating states, Arizona’s Secretary of State’s Office does not register corporations or limited liability companies. Those records are maintained by the independently elected Arizona Corporation Commission, while public-benefit payment information is held by executive agencies including AHCCCS and the Department of Economic Security.
The request comes as Hobbs remains under investigation over allegations involving Sunshine Residential Homes, a Department of Child Safety (DCS) contractor. Sunshine donated $300,000 to the Arizona Democratic Party and $100,000 to Hobbs’ inaugural fund before DCS approved a 30% rate increase, though no other group homes received rate increases and over a dozen contracts were terminated.
Attorney General Kris Mayes’ office has sought an interview with Hobbs as part of its ongoing criminal investigation, while the Arizona House has retained outside counsel to conduct a separate inquiry. Hobbs has denied wrongdoing and maintained that she did not influence the contracting decision. As of July 30, no date had been set for her interview with investigators. KJZZ reported that Mayes expects to make an announcement regarding the investigation before the November 3 election.
The Justice Department established a West Coast Health Care Fraud Strike Force in April covering Arizona, Nevada, and the Northern District of California. U.S. Attorney Timothy Courchaine said federal investigators and prosecutors had disrupted fraud schemes representing more than $1 billion in Arizona alone.
In announcing the strike force, the Justice Department cited the prosecution of two wound-graft company owners in a $1.2 billion Medicare and Medicaid fraud scheme and the indictment of Farrukh Jarar Ali, a Pakistani national accused of directing an approximately $650 million fraud operation involving at least 41 Arizona substance-abuse treatment clinics.
Federal prosecutors allege Ali’s company helped enroll clinics as providers with AHCCCS before submitting approximately $650 million in fraudulent claims for services that were unnecessary, substandard, or never provided. AHCCCS paid approximately $564 million on the claims, according to the Justice Department.
Hobbs’ administration has separately promoted Arizona’s existing efforts to prevent Medicaid fraud. In May, the governor’s office said the state’s enforcement campaign had targeted as much as $2.5 billion in suspected fraud, produced more than 364 payment suspensions based on credible allegations, and contributed to more than 100 indictments. AHCCCS also began deploying the Alivia 360 analytics platform this summer to identify potential improper claims before payment.
Carbone said the federal agreement could add another investigative tool by allowing authorities to identify suspicious connections between public payments and corporate records earlier.
“Arizona has already paid an enormous price for fraud,” Carbone said. “Governor Hobbs can act now to help prevent the next scandal. If she chooses to leave Arizona on the sidelines, she should explain why.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
