Painful Patient Stories Emerge After Arizona Crackdown on Fraudulent Rehab Facilities

As the state crackdown on fraudulent Medicaid-funded substance abuse recovery homes across Arizona continues, stories of patients impacted by the programs are emerging.

The facilities would operate under generic names like “Healing Fountain,” “Happy Valley,” or “Angelic Behavioral Health,” and registered with the state as counseling centers and behavioral health rehabilitation facilities, the New York Times reports. They then would charge the state for thousands of dollars, which was paid out through the Arizona Health Care Cost Containment System (AHCCCS). The widespread fraud ballooned the costs of the program, which paid out $53 million in 2019 and increased to $688 million in 2022.

Once the state intervened, it moved quickly — perhaps too quickly for ill-equipped advocacy groups and former patients left to deal with the aftermath. The Arizona Center for Investigative Reporting explains that in the months since the announcement of the state investigation, patients, advocates and providers have raised alarms about the short-notice given to relevant tribal authorities, difficulties with the crisis response hotline, inadequate oversight for new facilities that are supposed to serve the unhoused patients, and even allegations that the people affiliated with suspended facilities have been allowed to open new businesses.

Some patients have relapsed and even died since the suspension of the facilities. One now-closed location, the Pathfinders Recovery Center, counts two former patients that died of drug overdose since the facility closed. Family members of the deceased told 12News that the program failed to meet its advertised expectations in both facility maintenance and therapy services.

The Arizona Attorney Generals Office has continued to announce new charges against facilities and co-conspirators who assisted in keeping the recovery centers in business. Arizona Public Radio reports that a state grand jury indicted a man named Corey Beckhum on charges of conspiracy and unlawful consideration for the referral of patients. The indictment says Beckhum kept prospective patients in unlicensed sober living homes and shopped them to behavioral health facilities on “per-person, per-day payment.”

Another conspirator, Ariell Olivia Dix, was charged in 2021 and earlier this year on two separate cases of defrauding AHCCCS, for which she and other defendants billed the program for more than $20 million in mental health and drug or alcohol rehabilitation services that were never provided. According to the Arizona Republic, Dix did not own or operate a fraudulent center in Arizona, but is accused of assisting others in defrauding AHCCCS. She was convicted in Nevada on similar charges in 2020.