AZ GOP Senators Allege Medicaid Fraud Plagues Tribal Communities Despite State Crackdown

Arizona lawmakers, tribal advocates, behavioral health providers, and survivors gathered at the Arizona Capitol on Monday to allege that Medicaid fraud targeting Native Americans continues despite years of state crackdowns, intensifying a growing dispute between Republican lawmakers and Attorney General Kris Mayes over Arizona’s response to the crisis.

The press conference, led by State Sen. Carine Werner (R-LD4), followed Werner’s recent call for federal intervention, previously reported by California Globe, and allegations that whistleblower evidence points to continuing fraud schemes involving behavioral health and sober living operations serving tribal communities.

The event also came days after Mayes publicly defended her office’s Medicaid fraud enforcement efforts and sharply criticized Werner following the senator’s allegations of continued criminal activity.

During a May 14 press conference, Mayes rejected Werner’s claims and defended the state’s response, stating, “Here’s what I would say about Senator Werner: She is a liar, and she is a dumb one at that.” Mayes said the information Werner had recently brought forward had already been referred to federal authorities, and that the FBI informed state officials that an investigation was already underway.

Werner did not directly address Mayes’ remarks during Monday’s event. Instead, she outlined what she described as a multi-stage evolution of Arizona’s Medicaid fraud crisis and argued criminal operators continue adapting despite prior enforcement efforts. 

“This is an absolutely tragic story,” Werner said. “Arizona became the gold rush for bad actors.” 

Werner described what she called “Fraud 1.0” as a period in which weak licensing requirements allowed behavioral health and substance abuse providers to obtain state approval through self-attestation, enabling fraudulent operators to enter Arizona’s Medicaid system. Werner alleged that billions of dollars left Arizona through fraudulent operations during that period, including payments involving overseas actors. 

According to Werner, “Fraud 2.0” began with the state’s 2023 payment moratorium targeting fraudulent providers. While acknowledging that bad actors needed to be removed, Werner argued the response also swept up legitimate providers and displaced vulnerable patients.

“There’s a big difference between the crackdown in Minnesota and Arizona,” Werner said. “In Minnesota, they had empty buildings. In Arizona, they were full of human beings.” 

Werner then described what she labeled “Fraud 3.0,” alleging that fraudulent operators have reorganized and shifted operations onto tribal lands where state oversight is weaker.

“We have all heard the horror stories about the notorious white vans driving from Phoenix to tribal lands, sometimes out of state, to coerce indigenous people with promises of housing, food, and treatment,” Werner said, alleging vulnerable Native Americans continue to be recruited with promises of housing and treatment before being placed into unsafe conditions while providers bill for services allegedly never rendered. 

“Instead, they were shoved into unsafe flop houses, given drugs and alcohol, exposed to violence, and harbored there while fraudulent providers billed our state services that were never provided.”

Werner further alleged that two Native American whistleblowers recently brought evidence to her office that has since been turned over to the Arizona Attorney General’s Office, the U.S. Department of Justice, and the FBI. She alleged the evidence involved an operator already known to state authorities.

“The perpetrator… is a known entity to AHCCCS and the attorney general’s office,” Werner said. “According to billing records… this individual fleeced our taxpayer system for hundreds of millions of dollars.” 

Much of the press conference focused on testimony from tribal advocates and survivors who argued that exploitation continues within Native communities.

Rea Stewart of Turtle Island Women Warriors alleged recruitment activity remains ongoing.

“On Saturday… we witnessed a couple of ladies blatantly recruiting,” Stewart said. She added the alleged recruiters “came to my store and mentioned that ‘We are here to help your kind,’ describing encounters at bus stops involving unhoused Native individuals. “One lady stood up for the group and said, ‘No, we don’t need your help.’ I thanked her and I said that if they had gone into one of these homes, they would end up dead.”

“So yes, it’s still happening.” Stewart said. 

“We stand here because our native communities are hurting and because the sober living fraud has devastated lives, families, and trust within our community for years. From the beginning of this fraud, native people sounded the alarm. We asked for help. We asked for accountability.

And many of our relatives were still left trapped in the systems that profited from their pain instead of helping them heal. This is not just fraud. This is exploitation of vulnerable human beings.

Our people were treated like numbers and dollar signs instead of relatives deserving dignity, care, and recovery.”

Raquel Moody of the White Mountain Apache community spoke as both a survivor and a family member affected by fraudulent treatment housing.

“In 2022, I came here with my brother seeking real help,” Moody said. “They called it sober living and treatment, but what I found was the opposite.” 

“For six months, I searched for somebody who was already gone,” Moody said. She had spent months searching for her brother before learning he had died shortly after she was removed from one of the facilities. 

“I testify today for him and for all our native families who have been preyed upon today,” Moody said. 

Behavioral health providers and legal representatives also criticized the state’s response.

Attorney Heather Dukes, speaking on behalf of providers, argued that AHCCCS’ response to fraud evolved into an overcorrection that harmed legitimate treatment organizations.

“We support aggressive prosecutions and strong oversight,” Dukes said. “But it was outdated systems and oversight failures that allowed this fraud to explode on AHCCCS’ watch, not the providers.” She argued providers continue facing delayed reimbursements, stagnant payment rates, and administrative burdens that threaten continued operations. 

Dukes noted that inpatient behavioral health reimbursement rates have remained unchanged since 2015, despite a 2023 state-commissioned study recommending substantial increases. Dukes said AHCCCS adopted none of the study’s recommendations. 

Werner said testimony gathered during five Health and Human Services Committee hearings influenced legislation she introduced this session, including SB1171, which would require fingerprint clearance cards for behavioral health facility owners and controlling persons, and SB1494 targeting patient brokering practices. 

Other Republican lawmakers joined Werner at the event.

Sen. Hildy Angius (R-LD30) said committee hearings revealed widespread problems affecting Native American behavioral health services and argued many providers faced closure because of reimbursement failures. Angius said, “Although we met with dozens of people, including clients, providers, and AHCCCS employees, nothing really happened except for the replacement of two AHCCCS directors.”

Referring to AG Mayes’ comments, Angius said, “We learned on Friday that progress has been made, and I am pleased that Senator Werner’s hard work has perhaps pushed this to the forefront of the Attorney General’s office.” 

Sen. Wendy Rogers (R-LD7) described the issue as deeply personal, given the large tribal populations in her district, and called for greater coordination among tribal leaders, law enforcement, and government agencies. 

AZ state medicaid (AHCCCS) is rife w/ fraud & corruption. Legitimate providers can’t get paid. Rural Native American victims suffer. AZ Senate led b/c governor & AG are AWOL, defaming Senator @carinewerner who brought them the evidence! pic.twitter.com/OGPAfAfhGM

— Wendy Rogers (@WendyRogersAZ) May 18, 2026

Arizona Senate President Warren Petersen criticized the governor’s office and the attorney general for leadership failures and praised Werner’s work investigating the issue. 

🚨While Attorney General Kris Mayes attacks lawmakers and takes victory laps, Native families and victims are still warning that fraud and exploitation are happening on tribal lands.

Senate Republicans are listening to victims.
We're working with whistleblowers and tribal… pic.twitter.com/JUiOl0flBc

— AZSenateRepublicans (@AZSenateGOP) May 19, 2026

Werner said her committee intends to continue oversight hearings and encouraged current or former AHCCCS employees with relevant information to contact her office.

“My responsibility as chair of this committee is to investigate problems, protect access to care, and drive reforms,” Werner said. “And that is precisely what we will continue to do.” 

Werner concluded her remarks saying, “Those who cannot remember the past are condemned to repeat it, and we will not allow that to happen here in Arizona.”