Sober living crisis: Displaced people remain homeless after AHCCCS scandal
PHOENIX - Two major issues in Arizona have become intertwined since the state’s Medicaid agency cracked down on fraudulent behavioral health facilities in 2023.
Some critics say the suspension of hundreds of providers was an over-correction after Arizona lost more than $2 billion in estimated fraud.
What we know:
Reva Stewart patrols the edge of Cesar Chavez Park in Laveen for those experiencing homelessness.
She leads her team, Stolen People, Stolen Benefits, trying to help these people get through winter, with jackets, snacks and resources to legitimate rehabs.
Some of them have been displaced by sober living homes no longer operating.
Timeline:
The state’s Medicaid agency, Arizona Health Care Cost Containment System (AHCCCS), implemented a moratorium on the enrollment of new providers in May 2023, which included behavioral health outpatient clinics and behavioral health residential facilities.
It cut off new providers while the state cracked down on bad actors.
The moratorium was lifted in December 2024.
Stewart says vulnerable people battling alcohol and drug addiction are being recruited once again.
She says vulnerable people are still being recruited, claiming that sober living homes and intensive outpatient programs that were closed due to the AHCCCS crackdown, are opening back up as behavioral health residential facilities.
Now, new providers must pass heightened screenings by AHCCCS if high risk is identified.
Officials say changes to policies will prevent "bad actors" from fraudulently billing the state for services that were never provided.
What they're saying:
"The majority of the treatment homes right now are not really helping us," said a woman named Chelsea who's been in and out of homes. "I’m not going to lie. I’ve been to over 15 treatments and they’re all different. They’re not all the same."
Suspended providers went from hundreds in 2023 to just 18 in 2024. Allegations of fraud have become more revealing in suspension letters.
For example, there were allegations of paying members in the form of free housing, food and gym memberships, billing for members who are incarcerated or dead, or someone who was receiving services elsewhere.
Stewart's team headed to 51st Avenue and Baseline Road to help those on the street. The busy intersection, where there are four corners and four bus stops, is where drug activity is consistent.
The team is there to help those in need who've been displaced by shut-down sober living homes.
‘They just packed as many people in there as possible’
The team met a man who once lived at Canal on Baseline in Mesa where, in 2023, police said the condo complex contained "numberous sober living organizations, housing numerous clients."
The complex generated constant calls for service.
"Some house managers would even tell you, ‘Hey, come in. We’ll give you a hundred dollars a day,’" he said, adding that drugs and alcohol were provided.
Police reports documented alcohol abuse and assaults.
Eviction filings revealed tenants leasing some units agreed to pay group home or sober home surcharges on top of monthly rent.
"They just packed as many people in there as possible. Some of them went to the clinic. Some of them didn’t go," he said.
He says it was common to be shuffled from unit to unit, as long as you were on the American Indian Health Program.
"They offered to help us. They actually don’t help us. They’re just lining their pockets," he said.
He says he's not a Native American.
By the numbers:
According to the 2024 annual homelessness assessment report released by the U.S. Department of Housing and Urban Development, Arizona saw a 3.5% increase in its homeless population compared to 2023.
Out of 14,737 people experiencing homelessness, around half were unsheltered.
Desbah Reed is staying in a sober living home to avoid the streets.
"I want to move out into an apartment, but I know that I haven’t worked in several years. I deal with being bipolar and then having my addictions at the same time, so it’s kind of hard for me to just get stable. I feel like I’m finally getting it now. I feel like I'm doing a lot better and I wanna go forward, but I feel like as far as the economy goes, there’s nowhere for me to live," Reed explained.
Maricopa County’s annual point-in-time homelessness count wrapped up in January. It helps learn more about the people behind the crisis and what factored into their current situation.
Meanwhile, at 51st Avenue and Baseline Road, people said the sober living scheme is not over.
"Deplorable. It’s awful. People taking advantage of other people. It’s not right," a man said.
Stewart says, "It’s just a revolving door at this point."
Click here for homeless services in the state of Arizona.