Sober living crackdown sparks local backlash

Sep. 25—The state crackdown on fraudulent and excessive billing for outpatient behavioral health services has not waivered since its May announcement.

If anything, the Arizona Heath Care Cost Containment System's actions under the American Indian Health Program has accelerated.

The agency added 64 providers to its list of suspension last month alone — bringing the total number of suspensions since May to 226.

Eight of the latest suspensions are in Mesa.

Providers placed on the list are cut off from receiving AHCCCS payments until the suspension is lifted, following a hearing or a determination that no fraud occurred.

But providers and clients receiving treatment and housing arranged by behavioral health clinics are starting to push back.

A group critical of AHCCCS' approach is planning to picket the Arizona Department of Health Services on Tuesday, Sept. 26, with several Mesa clinics joining the protest.

"I think the crackdown is needed, but I think the way they're going about it is not the right way," said Dr. Dwayne McIntosh, a psychiatric nurse practitioner in Mesa who serves about 10 clients with AHCCCS coverage.

McIntosh is not on the suspension list, but he said payments to behavioral health providers are arriving later and the billing process has become harder to navigate.

He said AHCCCS should be doing more to help providers get into compliance rather than take a punitive approach.

"There is another way of trying to weed people out," McIntosh said. "They're weeding out the good people along with the fraud."

Rev. Andre Miller, pastor of the New Beginnings Church in Mesa, has been speaking with many providers and clients affected by the crackdown.

The state's actions are "bleeding out many businesses and that's not OK," he said.

Miller has been working with suspended providers to try to find new housing for people facing displacement from sober living homes.

He believes the state was unprepared to handle the surge of people displaced from housing connected with suspended behavioral health clinics.

In announcing the crackdown in May, Gov. Katie Hobbs and state Attorney General Kris Mayes said they were responding to a meteoric rise in payments for outpatient behavioral services over the past three years.

Medicaid payments for the services rose from $53 million in 2019 to $668 million last year.

Officials also pointed to reports of human trafficking of Native Americans by bad actors, who used tribal members as pawns for collecting payments without providing treatment.

State leaders said a larger number of providers were not engaged in egregious offenses like trafficking but were exploiting policies that made it easy for clinics to get payments through the fee-for-service setup of the American Indian Health Program.

AHCCCS says providers are suspended when "indicia of fraud" are detected, such as billing for more hours a day than a facility is open or billing for multiple services for the same person at the same time.

Attorney Ashley Adams represents 16 providers placed on the suspension list and has participated in AHCCCS hearings.

"I think AHCCCS has shut down a number of innocent providers without doing any due diligence," she said. "They aren't doing any investigations.

"They're looking at billing records and I don't know what else and suspending people for things that don't equate to fraud, in my view."

She agrees action was needed to stop rampant abuse, but said the scale and speed of the agency's actions are compromising due process for providers.

The state's crackdown is also disrupting the system of free housing that outpatient behavioral health care clinics have provided some Native Americans.

Housing is not a covered service under Medicaid, but many Native Americans receiving behavioral health treatments are referred to free shelter through their clinics.

McIntosh said housing is an important part of recovery, especially for Native Americans who are coming off a reservation and don't have connections in the Phoenix-metro area.

"You can't expect people to get well if you're going to put them on the streets," he said "You gotta give them something to get on their feet."

The housing providers can't be reimbursed by AHCCCS directly. Instead, the supportive housing appears to be funded with outpatient clinics' "donations," as one suspended provider called the payments.

AHCCCS has deemed the offer of housing to outpatient behavioral health patients an inducement for service, "and thus an illegal kickback," Adams said.

But Adams argues that the agency did not explicitly forbid these practices, saying the department has "known about these providers providing supportive housing for years."

When AHCCCS announced its crackdown in May, officials said they were prepared to assist people displaced as a result of clinic closures.

It created a dedicated hotline at 211 (press 7) for sober living patients impacted by the actions, and the department said it was coordinating with social service organizations to provide shelter for displaced people.

In August, AHCCCS reported fielding 11,000 calls on the hotline since its inception and said its nonprofit partners Solari and Community Bridges had provided 13,000 nights of temporary lodging and served more than 4,000 individuals.

But Miller and Adams say the response to displacements has not been adequate.

Miller said the hotline has been slow and cumbersome for many providers scrambling to find new housing for their clients.

He also doesn't think there are enough people on staff to handle the volume of requests.

Adams said in her experience the emergency shelter available is a far cry from what the patients had prior.

Adams said patients served by one of her clients were offered emergency shelter in a "known drugged-infested hotel."

"All that does is put them back in a situation where they're tempted to use again," she said.

Adams wants to see a less adversarial stance with the community of providers "who are doing good work and have good ideas about how to keep providing services. There's a great need for these services."