Southwest Valley cities crack down on 100s of sober living homes amid Medicaid fraud. How?

Three southwest Valley cities are using city codes to find, regulate and crack down on sober living homes caught up in the Medicaid fraud scandal that ripped off taxpayers for around $2 billion, and counting.

Goodyear currently has five licensed group homes in the city, although officials know of a total of 156, said Goodyear Police Officer Scott Daniel, who has been working to combat the issue since 2019. The other 155 group homes remain unlicensed.

The Buckeye code enforcement team, meanwhile, has shut down 22 out of the 24 unlicensed sober living homes that were operating in 2023, said Buckeye Police Department spokesperson Carissa Planalp.

And Avondale police have gone out to dozens of sober living homes as the city has enacted new registration laws that the city says have slowed the proliferation of disruptive or fraudulent homes.

But cities are hamstrung by state laws that keep the exact locations of sober living homes secret. On top of that, scores of homes across the Valley are not licensed by the state, so cities typically only become aware of them when neighbors complain about crime, noise, fights or overdoses.

Many unscrupulous homes exist largely to warehouse people for bogus therapy companies involved in the Medicaid scam. State and federal prosecutors have indicted six dozen therapy firms or owners, but scores of sober living homes have avoided criminal penalties.

Even when cities do use new regulations to crack down or close the bogus homes, police are discovering they pop back up under a new name or company, sometimes reorganized as a behavioral health facility. Often with the same clients that went untreated, and sometimes plied with drugs or alcohol, when they were fraudulently denied rehab services.

It's a grim and tragic game of Whack-a-Mole playing out in streets and neighborhoods across the Valley. And it's not going away.

State prosecutors have alleged in court that dozens of people and companies fraudulently posed as addiction counseling services, bilking the state Medicaid program out of $1.5 billion to $2.5 billion for services never provided. They targeted Native Americans who needed help. Some were kidnapped off the streets from the Four Corners area and other parts of the U.S. West and taken to metro Phoenix.

Goodyear's response to sober living homes

In 2019, Daniel said police frequently started getting calls to the same addresses with predominantly Native American people, although no one was aware of what a sober living home was at the time. Sometimes the department would get called 11 times in a single week.

Every time police responded, they came across people who were intoxicated and passed out in the home's yard or other nearby yards.

Daniel said the people in the group homes are coming from all over the state and the rest of the country. Some were paid to stay in the homes, he said.

When Daniel started doing further research, he was surprised to learn no one could help.

"It just felt like there was no accountability. Who do we contact to take care of this issue?" Daniel said.

It makes the job more difficult for police officers when they don't have any patient information. Daniel said he's gotten calls for overdoses and, upon showing up, realized that the person running the home didn't even have the person's identity. Those identities are protected under state privacy laws.

Some facilities would say that people were at the group home under court-ordered treatment but could never actually produce a court order, Daniel said.

"You've got all these people that are still under the influence, who are supposed to be getting services and getting better, and they're not. Who do you contact for that?" Daniel said.

Sober living homes fall under the group homes umbrella. So, while sober living homes are specifically housing people with addiction, group homes can also provide assisted living, hospice care and behavioral health services. The majority of the group homes in Goodyear are behavioral health and sober living, Daniel said.

Unlicensed and unscrupulous homes will sometimes flip-flop between offering sober living and behavioral health homes, he added. People with addictions can get treated for mental health issues in a behavioral health facility.

So, when sober living homes start to get flagged by the city or residents, they will temporarily close and come back as a behavioral health facility, having kept the same clients.

Avondale has enacted new regulations

Avondale started tracking group homes and sober living homes in 2023, said Avondale Police Department Lieutenant Manny Rios.

Police responded to 74 calls that involved sober living homes last year, Rios said. Those calls included intoxicated subjects, assaults, trespassing and overdoses. Oftentimes, a call came from inside a sober house, although sometimes neighbors called police.

While the issue peaked last spring and summer, Rios said the department only gets one to two calls per month to sober living facilities these days. During the peak in April through August of last year, the city averaged about 11 calls per month, with the highest number coming in July with 16 calls, Rios said.

Overall, the city responded to 52 residences that were sober living facilities, with 12 of those having multiple calls. 5 residences are thought to be unlicensed, and 5 also had AZDHS contacted by officers, Rios said.

Avondale's planning department now requires all sober living facilities to register with the city and follow specific guidelines, at risk of their license getting taken away. Currently, the city's code allows sober living facilities to house 10 unrelated people and each sober living facility must be at least 600 feet away from the nearest one. The updated ordinance was approved by City Council in August and was effective beginning in September.

But while registering with the city is a deterrent for those operating fraudulent sober living facilities, the police still don't have access to the addresses, meaning they would still be unaware that they are going to a sober living facility upon getting a call to the address.

But the issue wasn't as bad as it was in some other cities, Rios said. Oftentimes, the manager of the home would have the appropriate contact information and certification posted at the door.

Reach the reporter at ahardle@gannett.com or by phone at 480-259-8545. Follow her on X, formerly Twitter: @AlexandraHardle.

This article originally appeared on Arizona Republic: How southwest Valley cities cope with 100s of sober living homes