Arizona Medicaid Fraud Crackdown Results in 92% Decline in Mental Health Billings

May 19, 2026

Arizona officials say a sweeping crackdown on Medicaid fraud has led to a staggering 92% drop in behavioral health billing through the American Indian Health Plan since 2023 — a dramatic sign of how deeply fraudulent operators had infiltrated the system. According to the Arizona Attorney General’s Office, billing under the plan fell from more than $3.1 billion between 2021 and 2023 to roughly $230 million from 2024 through 2026 after the state began aggressively targeting scams tied to sober living homes and behavioral health providers.

Attorney General Kris Mayes announced the figures while revealing the sentencing of Rita Anagho, a nurse practitioner accused of participating in fraudulent Medicaid billing schemes. Prosecutors said Anagho billed Arizona’s Medicaid system for services never provided, including claims involving minors, incarcerated people, and deceased patients, while targeting Native Americans seeking addiction treatment. She was sentenced to 3.5 years in prison and ordered to pay $55 million in restitution in a related federal case.

Investigators say many Native Americans were recruited from tribal communities across the Southwest with promises of treatment, only to end up in unsafe or unlicensed sober living homes while providers billed Medicaid for nonexistent or exploitative care. Arizona officials have described the scandal as one of the largest fraud schemes in state history. Since the crackdown began, authorities say they have indicted 140 individuals and entities, secured 41 convictions, and recovered or seized more than $139 million in assets.

While state officials argue the sharp billing decline proves the crackdown is working, some legitimate treatment providers have warned that aggressive enforcement actions have also slowed payments for real patient care. Even so, Arizona leaders say the massive collapse in billing suggests billions of dollars may previously have flowed through fraudulent or abusive operations that exploited vulnerable people struggling with addiction.

(Source: Arizona AG press release, May 14, 2026)