NewFound Hope surrenders licensing after AZDHS probes hotel property used for unauthorized rehab

FOX 10 Investigates has an update on a report we brought you about a Tempe hotel property being used as an unlicensed treatment center for dozens of people battling addictions.

This comes months after revealing how the company running this operation was investigated by multiple state agencies for serious patient concerns.

The company, NewFound Hope, had been one of the more challenging behavioral health providers for Arizona's Department of Health Services (DHS), for a large part of 2023, health officials said.

DHS found several deficiencies leading to seven citations and a costly fine due to a specific hotel not being licensed to provide care for vulnerable people.

FOX 10 learned in December 2023 that NewFound Hope surrendered licenses for two facilities they own.

Last August, FOX 10 Investigator Justin Lum confronted the owner of NewFound Hope, Denis Artiles.

His detox clinic in Tempe is still suspended by AHCCCS, Arizona’s Medicaid agency, over allegations of Medicaid fraud.

Last May, Arizona’s Department of Health Services ordered NewFound Hope to cease and desist from operating a hotel property that housed nearly 100 patients in recovery in Tempe.

Documents obtained from DHS say NewFound Hope operated an unlicensed treatment center, transporting vulnerable people battling addictions to its licensed rehab center.

But, NewFound Hope still occupied the hotel on North Scottsdale Road near Loop 202 in Tempe, appealing the cease and desist.

Facility continued to operate despite order

Denis Artiles, CEO of NewFound Hope, was asked on Aug. 4, 2023, after a private hearing with AHCCCS, "Are you guys still operating right now?"

He responds, "Yes, we are."

He was then asked, "So, despite the cease and desist, you feel like DHS is in the wrong here?"

He answers, "Yes."

At the time, the state had already notified NewFound Hope of the intent to revoke its licensing.

Just days after our conversation with Artiles, NewFound Hope entered settlement negotiations with DHS.

"They were not forthcoming with information when we initiated the investigation, which really caused us to want to look closer at the records," said Katrina Trinchera, Deputy Bureau Chief of Medical Facilities Licensing at DHS.

She visited what her team identified as a "decommissioned Ramada" last May and says NewFound Hope leadership initially denied access for the unannounced inspection.

Trinchera said patients had "documentation of active detox when they were residing at the hotel and patients that were detoxing off of alcohol, other types of substances which could lead to serious injury or death."

That’s a problem.

In FOX 10's previous reporting on NewFound Hope, former employees said people were allowed to drink and there was a lack of supervision in the hotel where kids also lived.

Sources say the facility’s size meant higher volume and more patients to bill AHCCCS for.

FOX 10 obtained financial records from the state’s Medicaid agency, revealing NewFound Hope was paid nearly $13 million from May 2021 until payments were suspended in February 2023.

NewFound Hope is accused of failing to follow medical documentation guidelines, providing services without clinical oversight and excessive billing.

Months after the suspension in July 2023, we watched the activity of the unlicensed hotel facility multiple times. It was clearly still operating while fighting the license revocation process.

"We were just not able to, through those settlement negotiations, confidently understand that this facility was going to be able to continue providing quality care," Trinchera said.

What now?

Recently, NewFound Hope and DHS agreed to a settlement.

NewFound Hope voluntarily surrendered licensing for two locations: the outpatient treatment center and a counseling center owned by the company.

Anyone connected to NewFound Hope’s LLC is now prohibited from applying for a healthcare institution license or sober living home license for two years.

When we returned to the Tempe hotel several months later, we still saw several white vans parked and people who appeared to be staying at the property.

NewFound Hope has not responded to FOX 10's request for a comment.

Last August, after an appeal hearing, an administrative law judge ordered the suspension to remain in effect until AHCCCS determines there is insufficient evidence of fraud.

FOX 10 reached out to the attorney representing NewFound Hope as they are now appealing the suspension in the lower court.

"The agent testified on cross-examination that there was no evidence of intention to defraud, yet the hearing officer still found that there was a credible allegation of fraud, so I don’t see how they can reconcile those two things," said Ashley Adams of Adams & Associates, PLC.

Adams says, from her knowledge, NewFound Hope is no longer operating facilities.

Meantime, Trinchera says her team is actively addressing the issue of unlicensed rehab and treatment facilities across the state.

"We can’t allow this to happen in our community. The department has so much leverage and I do think that with more statutes and more rules and more restrictions in being able to qualify for a license will absolutely help, but those things take time," she remarked.

DHS says there has been an uptick in complaints for unlicensed rehab homes and facilities, even saying NewFound Hope’s case is an example of how providers try to do business on a much larger scale, but again this hotel property was not licensed for treatment.