In the wake of a multibillion-dollar scheme involving sober living homes, Arizona Attorney General Kris Mayes announced Thursday that her office’s crackdown on Medicaid fraud is working.
The scheme defrauded Arizona’s Medicaid agency, Arizona Health Care Cost Containment System, out of an estimated $2.8 billion. Bad actors running the fraudulent homes targeted Native Americans, charged the agency for addiction treatment services they never provided and held victims against their will.
Shortly after Mayes and Gov. Katie Hobbs took office, they pledged to put a stop to fraud and go after those bad actors.
On Thursday, Mayes announced billing under the behavioral health code has gone down 92% over the last two years.
She blasted her predecessors for not doing more.
“How in the hell did this not ring major alarm bells in Gov. Ducey’s budget office is beyond me,” Mayes said. “How this did not spur more investigations or aggressive investigations and prosecutions by this and other prosecutorial agencies at the same time, is also inexplicable.”
Federal fraud warnings
Mayes’ announcement follows a warning to states from the U.S. Department of Health and Human Services Office of Inspector General that if they aren’t doing enough to aggressively prosecute Medicaid fraud with Medicaid Fraud Control Units (MFCUs), they stand to lose Medicaid funding.
“Noncompliance with your MFCU obligations can take your State’s entire Medicaid program out of compliance. This means your failure to do your job as head of the MFCU has put all of your State’s Medicaid funds in jeopardy,” HHS wrote in a letter to Mayes’ office.
Her spokesperson, Richie Taylor, said the timing of her announcement highlighting Arizona’s work to mitigate Medicaid fraud is a coincidence.
“We did receive a letter, along with all 50 states. That is not the reason for this press conference. It was planned prior to the letter being received to mark the third anniversary of AG Mayes exposing this fraud,” Taylor stated.
Mayes highlighted the fact that her office’s Medicaid Fraud Control Unit received an award from none other than HHS’s Office of Inspector General last summer for fraud mitigation.
“Arizona’s Medicaid fraud control unit MCFU was the only unit nationwide selected for this honor in 2025, chosen from among 53 state and territorial programs,” Mayes said.
“I welcome additional resources that may be provided to our state to continue to go after criminals. Arizona is a national leader in combating Medicaid fraud because we made it a priority,” she added.
Mayes versus Sen. Werner
State Sen. Carine Werner (R-Scottsdale) started hosting legislative hearings on Medicaid fraud a few months ago. The night before Mayes’ press conference, Werner put out a statement alleging whistleblowers have evidence of ongoing Medicaid fraud and accusing Mayes’ office of not doing enough to go after bad actors.
“Attorney General Kris Mayes failed to secure the aggressive prosecutions and asset seizures necessary to stop these repeat offenders from the beginning,” Werner wrote.
Mayes didn’t pull punches with her response.
“Here’s what I would say about Senator Werner: She is a liar, and she is a dumb one at that,” Mayes told reporters.
Mayes said Werner asked her staff to meet last week and provided them whistleblower information about potential fraud, which the AG’s office immediately brought to the FBI.
The FBI told Mayes’ office that they had an open investigation on that matter and would consider the information provided.
“She was grateful and thankful to my agents when they visited her but she turned this into a bullsh-t political attack last night,” Mayes said of Werner.
Mayes then handed out papers showing the emails between Werner and her office.
Mayes versus all other Republican legislators
Republicans in the state Legislature recently proposed a state budget plan which would cut funding for nearly all state agencies by 5%, including Mayes’ office.
However, the budget plan — which was promptly vetoed by Hobbs — would exempt other law enforcement agencies from cuts like the Department of Public Safety.
Mayes scoffed at the idea of Republicans caring about fraud mitigation if they’re willing to cut her budget by that much.
“The Legislature’s budget spares other law enforcement agencies from that 5% percent cut. … I am the top law enforcement office in the state of Arizona,” Mayes said.
She also bashed lawmakers for altering the state Racketeer Influenced and Corrupt Organizations (RICO) Act under former Gov. Doug Ducey’s administration, restricting her office’s ability to seize assets in criminal cases.
That bill passed with bipartisan support.
Mayes argued that makes it harder for the AG's office to deal with fraud cases like these.
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