Arizona behavioral health clinic suspended for allegations of Medicaid fraud, ties to terminated provider
AI used in alleged Medicaid fraud scheme
An Arizona behavioral health provider is accused of using artificial intelligence to fake clinical documents while billing the state. FOX 10 Investigator Justin Lum reports.
PHOENIX - Just weeks after FOX 10's initial reporting, a behavioral health provider located on tribal land has been suspended by AHCCCS over credible allegations of fraud.
The clinic, Sacred Circles of Healing and Wellness, is also under FBI investigation. This comes three years after the state’s crackdown on massive Medicaid fraud targeting Native Americans and costing Arizona $2.8 billion.
FBI investigating AZ behavioral health provider with alleged ties to CEO who ran suspended clinic
Internal emails reveal the FBI is probing Sacred Circles of Healing and Wellness, a provider on tribal land allegedly linked to a previously suspended operator.
What we know:
FOX 10 has previously reported on Denis Artiles, the CEO of a terminated provider called Newfound Hope. Now the FBI and AHCCCS say Artiles involved himself with Sacred Circles of Healing and Wellness, which was just suspended on June 17.
A review of dozens of AHCCCS suspension letters over the last three years shows this one is extensive, listing more than 30 serious allegations.
"There are people that were bad actors before that realized they could find a native to be the front man and move operations to native land because there isn't a license that's needed there," said Republican State Senator Carine Werner on May 18, 2026.
Republican State Senator Carine Werner has raised concerns about the sober living scheme she says is still happening. This was days after the Attorney General’s Office revealed an FBI probe into Sacred Circles of Healing and Wellness, located in Tuba City on the Navajo Nation, a provider that Werner says was brought to her attention by whistleblowers.
Since the clinic operated on tribal land, it didn’t require licensing from the Department of Health, even while being paid by the state’s Medicaid agency, AHCCCS, which reimbursed $294,000 in six months for services provided. But this notice of suspension accuses Sacred Circles of engaging in Medicaid fraud and billing for services that could not have been provided as claimed.
The backstory:
Reporting on Denis Artiles stems back to 2023.
According to the notice of suspension letter to Sacred Circles of Healing and Wellness, Artiles is accused of secretly operating the clinic and using Coleen Chatter to front Sacred Circles while he funded the clinic’s payroll through his company, Mountain Vista Health, and provided transportation vehicles for clients.
Artiles previously owned Newfound Hope, a Tempe detox center that was suspended by AHCCCS, and then terminated. Artiles also agreed to a settlement with the Department of Health, blocking him from applying for any licensing until Dec. 20, 2025, after AHCCCS had already approved Sacred Circles as a provider weeks earlier.
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The AHCCCS Office of Inspector General also describes client bounties, saying Sacred Circles offered a $500 bonus for every client brought to Sacred Circles, going on to say Coleen Chatter was the only one receiving the bonuses paid by Artiles.
"And we're just watching history repeat itself," Werner said in reaction to the suspension. She says she learned about Denis Artiles through those same whistleblowers.
"They were only paid once and then after that it was all paid to Ms. Chatter. I was told the same information. And that is patient brokering, and it should never happen," Werner said.
Chatter is listed as the CEO of Sacred Circles, but she was once an advocate for a grassroots effort known as Stolen People, Stolen Benefits, helping tribal members victimized by the AHCCCS fraud scheme.
Dig deeper:
The suspension letter also says Sacred Circles allowed an intoxicated man to attend classes, and that Chatter allegedly bought drinks for him and engaged in a sexual affair with that man. AHCCCS says once she ended the affair, the man reportedly brought a weapon to the facility.
There’s also mention of artificial intelligence (AI), as the suspension letter accuses Sacred Circles of making staff use ChatGPT to generate clinical notes, then pasting the results into Word documents instead of personally documenting services provided.
"I know that AHCCCS has now taken on some AI to root out fraud, but if the providers are also, or the bad actors are also using AI in order to make a loop around that, that is problematic, and it is something that we are going to have to address and ensure that it's not being improperly used," Werner said.
Sacred Circles allegedly "ghost" billed for members who didn’t attend classes, left early or just stopped coming. Per AHCCCS, the clinic also did urinalysis testing despite not being licensed to provide lab or medical services. Werner believes there are still gaps in the system.
"It's disappointing that we're allowing history to repeat itself, considering how large the Medicaid fraud was over the last several years," Werner said.
What's next:
Sacred Circles of Healing and Wellness can request a state fair hearing if they disagree with the suspension or request an informal settlement conference.