by Jonathan Eberle | May 9, 2025 | News
By Jonathan Eberle |
A bill aimed at increasing transparency and accountability in Arizona’s Medicaid contracting process has been vetoed by Governor Katie Hobbs, prompting strong criticism from Republican lawmakers who say the governor is shielding her administration from scrutiny.
The legislation, SB 1612, was sponsored by Senate President Pro Tempore T.J. Shope and would have implemented a series of oversight measures affecting how the Arizona Health Care Cost Containment System (AHCCCS) — the state’s Medicaid agency — awards contracts and handles procurement.
In a statement released late Friday, Hobbs vetoed the bill without an accompanying public explanation, though her office has generally opposed what it characterizes as politically motivated legislation. Shope, however, called the veto “an alarming example of the fox guarding the henhouse.”
“I drafted this legislation in response to potential wrongdoing revealed from a probe on how the Hobbs administration provided an unfair advantage when awarding $15 billion worth of state Medicaid contracts,” Shope said. “She appears to be providing favoritism to her friends, allies, and donors using taxpayer dollars.”
The legislation comes in the wake of a 2023 ruling by an administrative law judge that found AHCCCS had improperly awarded contracts related to the Arizona Long Term Care System (ALTCS), which provides care for roughly 26,000 elderly and disabled Arizonans. The judge cited violations of procurement statutes, flawed bid evaluations, and evidence that contract decisions were made based on the interests of the agency rather than the public. Compounding concerns, a June 2023 local media investigation revealed that Sunshine Residential Homes, a state-licensed group home with a record of deficiencies, received millions in contracts from the Arizona Department of Child Safety (DCS) after making campaign donations to Governor Hobbs and the Arizona Democratic Party.
SB 1612 would have removed a statutory exemption allowing AHCCCS to use its own procurement code, requiring adherence to statewide rules; prohibited destruction of internal documentation during request-for-proposal (RFP) evaluations; and required vendors responding to RFPs or applying for state-administered grants to disclose political donations made to the governor or associated campaign committees.
Critics of Hobbs say these measures were a direct response to growing concerns about transparency in her administration. “Had she signed this bill into law, she would have given the citizens of Arizona greater confidence in state government acting in their best interests — not the best interests of political campaign coffers,” Shope said.
Hobbs’ veto is one of more than 100 since taking office in 2023. With Republicans controlling both chambers of the Arizona Legislature and Democrats holding the governorship, partisan tensions over issues like procurement, immigration, and education have dominated the political landscape.
Supporters of SB 1612 say it was a common-sense effort to address documented problems in contract awards that affect the lives of thousands of vulnerable Arizonans. As scrutiny intensifies over both AHCCCS and DCS procurement decisions, it remains to be seen whether lawmakers will revisit the bill in another form or pursue an independent investigation into the allegations.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
by Jonathan Eberle | May 3, 2025 | News
By Jonathan Eberle |
Arizona Governor Katie Hobbs announced Wednesday that two of her top health officials, AHCCCS Director Carmen Heredia and Department of Health Services Director Jennie Cunico, have resigned after it became apparent that the Republican-controlled state Senate would not confirm their appointments.
The resignations come amid a broader struggle between the governor’s office and the state Senate’s Director Nominations Committee, chaired by Republican Senator Jake Hoffman. The committee has become increasingly assertive in vetting Hobbs’ executive agency nominees, and in recent weeks signaled it would reject both Heredia and Cunico. Hobbs’ office said the resignations were necessary due to the Senate Majority’s unwillingness to confirm them.
“Today’s announcement is a testament to the important work being conducted on behalf of the citizens of Arizona by the Senate Committee on Director Nominations. I’m pleased Katie Hobbs saved herself, and AHCCCS Director Nominee Carmen Heredia, from the embarrassment of advancing her through the scheduled hearing this week,” said Senate Director Nominations Committee Chair Jake Hoffman. “Under Heredia’s direction, AHCCCS mismanaged the procurement process and improperly awarded contracts for healthcare services for thousands of elderly and physically disabled individuals enrolled in the Arizona Long Term Care System. A judge described the process as ‘arbitrary and capricious’ and recommended a full reset. Instead of responding to the feedback appropriately, Heredia basically told the judicial system to pound sand and moved forward with the contracts. Her refusal to provide transparency in this matter displayed nothing more than arrogance.”
“What’s even worse, Arizona is in the middle of a monumental Medicaid fraud crisis with a loss of more than $2 billion in taxpayer dollars,” continued Hoffman. “Under Katie Hobbs’ leadership, Heredia’s response has been incredibly disturbing, to say the least. Patients in sober living homes were evicted from facilities overnight after AHCCCS poorly executed suspensions of more than 300 providers. Many of these patients were mid-treatment, detoxing, or severely mentally ill and were dropped off on the streets with no identification or transportation. Legitimate providers were caught up in the mess without AHCCCS providing explanations or due process. Some are still waiting to be reinstated or reimbursed. We are left with a broken system due to Heredia’s mismanagement, and our vulnerable populations are caught up in this collapse.”
“Since its inception, the Committee on Director Nominations has been committed to honestly, thoroughly, and accurately vetting Katie Hobbs’ nominees. We have served as Arizonans’ last line of defense against incompetent, unqualified, and highly partisan picks to lead state agencies. We will continue to do the hard work the citizens of Arizona expect of us and will only approve competent, non-partisan individuals to serve in these critical roles,” stated Hoffman. “We look forward to Katie Hobbs sending us a sensible leader that will be able to rein in the abuse that has occurred at AHCCCS.”
Heredia, who led the Arizona Health Care Cost Containment System (AHCCCS) since early 2023, was credited by Hobbs with implementing sweeping reforms that led to nearly $1 billion in Medicaid fraud recoveries and savings over three years. She expanded access to care for working-class children, oversaw transitions to employer-sponsored insurance, and spearheaded behavioral health initiatives such as the Housing and Health Opportunities program.
However, Heredia’s leadership was the subject of fierce criticism from Senate Republicans. Senator Hoffman accused her of mismanaging Medicaid contracts and overseeing what he called a “broken system” during Arizona’s recent Medicaid fraud crisis. The Senate committee never formally held a confirmation hearing for Heredia, but it became clear she lacked the votes needed.
In her resignation letter, Heredia said, “It has become increasingly difficult to carry out this mission in good faith under the current political climate… Political theater has begun to outweigh sound policy.”
Cunico, a career public servant who transitioned from the Ducey administration also became ensnared in the Senate’s broader dispute over executive appointments. “It is clear to me that there is no path forward to confirmation,” Cunico said in her statement.
The latest resignations reflect a deepening power struggle between the Democratic governor and the Republican-led Legislature. Hobbs condemned what she called an “unprecedented politicization” of the confirmation process, warning that the climate in the Capitol is deterring qualified public servants.
“These resignations were not due to a failure in governance, but a failure in politics,” Hobbs said. “The people of Arizona deserve leaders who are judged by their performance, not their party.”
As the governor seeks replacements for both roles, it remains unclear how future nominees will fare in a process increasingly shaped by ideological divisions.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
by Daniel Stefanski | Feb 7, 2025 | News
By Daniel Stefanski |
A powerful Arizona legislator is continuing to shine the light on the governor’s reported shenanigans with the state’s finances.
Earlier this week, Arizona State Senator T.J. Shope introduced SB 1612 “to hold the Executive Branch accountable and prevent any future conflicts of interest from arising within the state procurement process” by “remov[ing] an exemption allowing the Arizona Health Care Cost Containment System (AHCCCS) to create their own procurement code.” The bill would also “prohibit an agency and state employees from destroying notes and documents created during a request for proposal (RFP) [and] require anyone responding to a state issued RFP or applying for a state administered grant to disclose any donations made to the Governor and campaign affiliates.”
Arizona Senate President Warren Petersen is a cosponsor of the legislation.
The need for this bill, according to Shope’s press release, became heightened after “an administrative law judge concluded AHCCCS improperly awarded contracts for healthcare services for 26,000 elderly and physically disabled individuals enrolled in the Arizona Long Term Care System…based on several factors, including violations of statutes and rules by AHCCCS, prejudice, a lack of transparency, contract awards based on best interests of the agency and not the state, an arbitrary and flawed ranking system of bid proposals, as well as deceptive criteria provided by AHCCS to health care companies on the evaluations of their bid proposals.”
In a statement accompanying the announcement of his bill, Senator Shope said, “The Hobbs Administration has a track record of engaging in questionable and unethical practices where favoritism is given, using taxpayer dollars, to those who are close to or have provided benefits to the Governor, her cabinet, and her allies. This legislation should help address these scandals and prevent future unfair advantages from being provided. Arizonans expect their elected officials to make decisions based on what’s best for the state and its citizens; not what’s best for their own personal agendas and political bank accounts.”
Last year, The Arizona Republic broke a story about the Arizona Department of Child Safety “approv[ing] what amounts to a nearly 60% increase in the rate that Sunshine Residential Homes Inc. charges to care for a child for a day.” The alleged action to approve the rate increase for the one organization was made while “DCS has denied pay increases to home operators and cut loose 16 providers during the contract renewal process.” The Republic also asserted that “no other standard group home provider was approved for any rate increase during Hobbs’ tenure.”
After the story ran in the Republic, Shope sent a letter on June 5 to both Attorney General Kris Mayes and Maricopa County Attorney Rachel Mitchell, asking both officials to “examine the facts surrounding the Department of Child Safety’s alleged decision to approve a nearly 60% rate increase for Sunshine Residential Homes and determine if conduct by any of the involved parties warrants a criminal or civil investigation.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by Staff Reporter | Nov 16, 2024 | Education, News
By Staff Reporter |
Arizona schools will be receiving a supply of overdose kits to address the increased impact of drugs on students.
The Arizona Department of Emergency & Military Affairs (DEMA) began delivering over 16,000 Narcan anti-overdose kits to schools on Wednesday. The Arizona Department of Education (AZED) oversaw the initial deliveries across all 15 counties.
In a press release, Superintendent Tom Horne said these kits were a lifesaving preventative to the increased presence of illicit substances in the state.
“Lives will be saved because these kits will be in schools throughout Arizona,” said Horne. “The STOP-IT Task Force has done incredible work to address the Fentanyl crisis among school-aged children and this is a major step to protecting the lives of students and raising awareness of this terrible scourge.”
The Narcan kit deliveries are part of AZED’s Overdose Preparedness & Intelligence Taskforce (STOP-IT), a new task force established this year to address the growing opioid epidemic. The idea for placing kits in schools came out of a meeting back in May.
The Arizona Department of Health Services (AZDHS) provided the Narcan kits at no cost to the state, and the Arizona Health Care Cost Containment System (AHCCCS) will provide training.
The kits come with flyers on training resources, information on county health agency partners, an announcement of an upcoming comprehensive STOP-IT Toolkit release, and a QR code taking the user to real-time training on Naloxone Resources from AHCCCS.
STOP-IT co-chairs are Holly Geyer from the Mayo Clinic and Mike Kurtenbach with AZED, leading over 60 representatives across various government agencies, schools, healthcare entities, law enforcement, and other organizations.
Geyer credited the initiative’s success to the collaborative strengths of Arizona agencies in Thursday’s press release.
“The STOP-IT naloxone distribution initiative could not have materialized without the unprecedented collaboration between the Department of Education, the Department of Health, AHCCCS and the National Guard,” said Geyer. “The representatives appointed through these agencies proved themselves strategic problem solvers who prioritized the mission and produced outcomes that far exceeded the taskforce’s original targets. Because of their resolve, we are proud to offer schools more than just naloxone. We can offer confidence in the safety of our school campuses and parental peace of mind.”
DEMA director Kerry Muehlenbeck said that their team’s logistical support for tackling drug overdose incidents ensured a better approach to their ultimate goal of reducing drug demand.
“Through this multi-agency initiative, we build stronger communities and support wellness in our future generations,” said Muehlenbeck.
Schools signed up for Narcan kits through the AZED’s online form, with the permission of their district or charter approval first. Further information about the kit distribution and application was submitted in a memo sent to schools across the state last month.
Per AZED, these overdose kits will be continually replenished to ensure schools’ continued ability to handle opioid emergencies.
Arizona reported over 1,900 opioid-related deaths and over 4,000 overdoses last year. 26 of those opioid-related deaths were among minors (those under the age of 17).
So far this year, AZDHS has recorded over 3,200 non-fatal opioid overdoses and over 1,000 confirmed opioid deaths. The total deaths among minors for this year amount to less than 10.
AZ Free News is your #1 source for Arizona news and politics. You can send us news tips using this link.
by Daniel Stefanski | Sep 28, 2024 | News
By Daniel Stefanski |
The Hobbs Administration is again under political fire for alleged conflicts of interest.
This week, Arizona State Senator T.J. Shope, the Senate President Pro Tempore, issued a statement to announce the recent conclusion of an administrative law judge that “the Arizona Health Care Cost Containment System (AHCCS) improperly awarded contracts for healthcare services for 26,000 elderly and physically disabled individuals enrolled in the Arizona Long Term Care System.” According to the release from Senator Shope, the “determination was based on several factors, including violations of statutes and rules by AHCCCS, prejudice, a lack of transparency, contract awards based on best interests of the agency and not the state, an arbitrary and flawed ranking system of bid proposals, as well as deceptive criteria provided by AHCCCS to health care companies on the evaluations of their bid proposals.”
Shope revealed that “while the judge recommended cancellation of the procurement and issuance of a new request for bid proposals, AHCCCS announced this month it would not do so, and instead, would delay the transition to the newly awarded health plans by one year, commencing in October of 2025.”
In a statement, Shope said, “I’m deeply disturbed by what’s transpired under the Hobbs Administration, from the Sunshine Residential pay-for-play scheme, to now this procurement scandal. The integrity of state government and its spending practices have been compromised. As chairman of the Senate Health & Human Services Committee, it’s my goal to get to the bottom of these disputes and determine whether in fact preferential treatment is being provided using the tax dollars of hardworking Arizonans, and whether our citizens who rely on these critical services are being protected.”
The Senate Republican leader added, “I will be on a fact-finding mission in the coming months and will determine the best course of action to address these cases, whether through legislation, or other legal avenues.”
Earlier this year, The Arizona Republic broke a story about the Arizona Department of Child Safety “approv[ing] what amounts to a nearly 60% increase in the rate that Sunshine Residential Homes Inc. charges to care for a child for a day.” The alleged action to approve the rate increase for the one organization was made while “DCS has denied pay increases to home operators and cut loose 16 providers during the contract renewal process.” The Republic also asserted that “no other standard group home provider was approved for any rate increase during Hobbs’ tenure.”
After the story ran in the Republic, Shope sent a letter on June 5 to both Attorney General Kris Mayes and Maricopa County Attorney Rachel Mitchell, asking both officials to “examine the facts surrounding the Department of Child Safety’s alleged decision to approve a nearly 60% rate increase for Sunshine Residential Homes and determine if conduct by any of the involved parties warrants a criminal or civil investigation.”
State Representative Matt Gress followed up with a letter on June 6 to Mitchell, letting her know that “the Auditor General’s Office stands ready to partner with you in getting the facts about this troubling matter,” and that the Joint Legislative Audit Committee “will allocate the resources the Auditor General needs to help restore what appears to be a major breach of trust in our government.”
That day (June 7), Mayes fired off two letters to both Mitchell and the Arizona Auditor General, Lindsey Perry, over the investigation. Mayes told County Attorney Mitchell that “it would not be appropriate or in the best interest of the state to conduct parallel investigations into the same matter,” and that “a separate process conducted by the MCAO could jeopardize the integrity of the criminal investigation that my office will now proceed with.”
Mayes similarly told Auditor General Perry that “while [the Auditor General’s] office is statutorily authorized to examine records and conduct audits at the direction of the Joint Legislative Audit Committee, at this time, the assistance of [her] office is not needed by the Attorney General’s Office for our investigation.”
After the letters from Mayes, Arizona State Treasurer Kimberly Yee sent a letter to Maricopa County Attorney Rachel Mitchell, requesting “that [she] investigate the allegations that have occurred in [her] jurisdiction.” Yee also delivered a letter to Arizona Attorney General Kris Mayes, highlighting that the state’s top cop’s assertion that her office had singular control over any investigation “is not appropriate or authorized by law, as those entities have separate jurisdiction to investigate this matter.”
After receiving the letters from Senator T.J. Shope and Gress, County Attorney Mitchell informed them that her office was “contacted by the Arizona Auditor General asking that the Maricopa County Attorney’s Office serve as the prosecution office that will work with them while they conduct an investigation into this matter.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
