Arizona Medicaid Fraud Investigation Sparks Public Fight Between GOP Lawmakers and Attorney General Mayes

A heated confrontation unfolded at the Statehouse Monday as Republican lawmakers accused Attorney General Kris Mayes of failing to stop ongoing Medicaid fraud, while Mayes called one of the accusers "a liar and a dumb one at that."

The clash centers on a $2.8 billion Medicaid fraud scheme that began around 2019 under former Gov. Doug Ducey's administration and continues to draw scrutiny nearly seven years later.

"No one is asking the question who at AHCCCS was not paying attention while billions of dollars flew out the door," said State Sen. Carine Werner (R-Scottsdale).

Werner has hosted legislative hearings since last August investigating the fraud, which involved bad actors operating fraudulent sober living homes. Those operators charged Medicaid for addiction treatment services they never provided and allegedly held patients against their will. The fraud largely targeted Native American communities.

Whistleblower evidence and competing press conferences

On May 13, Werner announced she would host a press conference demanding "Immediate Action on New Whistleblower Evidence of Medicaid Fraud and Patient Exploitation on Tribal Lands."

But before Werner's event, Attorney General Kris Mayes held her own press conference to counter the accusations. Mayes said Werner's office had provided whistleblower information to the AG's office, which immediately referred it to the FBI.

The FBI told Mayes' office it already 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 political attack last night," Mayes said of Werner.

Mayes distributed papers showing emails between Werner and her office to support her claim. She then escalated her language significantly.

"She is a liar and a dumb one at that," Mayes said.

Senate President joins the fight

Senate President Warren Petersen (R-Gilbert) also spoke at Werner's event. Petersen took direct aim at Mayes, calling her "petulant and incompetent."

"One of our smartest and most honest members was insulted because she was doing the job that should have been getting done and stepping into the void," Petersen said of Werner.

Petersen placed blame for the Medicaid fraud squarely on Mayes and Gov. Katie Hobbs. Petersen is running for attorney general and hopes to unseat Mayes in the November election.

What the state has done so far

Hobbs and Mayes took office in 2023 and announced plans to crack down on the fraud. Their efforts included a partial moratorium on payments to providers. Some legitimate providers say the moratorium made it harder for them to deal with AHCCCS, leaving some people in need of treatment without care.

Hobbs held her own press conference on Monday detailing how her administration is going after Medicaid fraud. She also announced last week that AHCCCS is using artificial intelligence to help detect fraud.

Werner is pushing a bill this session to require fingerprint clearance at behavioral health facilities. Lawmakers have passed multiple bills in recent years aimed at mitigating Medicaid fraud.

Federal pressure mounts

The political fight comes as the federal government threatens all 50 states with loss of federal funding if they are not doing enough to prevent Medicaid fraud.

When asked whether she plans to interview former Gov. Doug Ducey or former AHCCCS head Jami Snyder as part of her investigation, Werner said she has not "gotten that far" and does not want to sit and "point fingers" about who is to blame.

The confrontation highlights the deep political divisions over how to handle the ongoing Medicaid fraud crisis and sets up a potentially contentious attorney general race this fall.