"Serious Flaws" with Recently Awarded State Medicaid Contracts Prompt Probe Into Conflict of Interest Concerns Under Hobbs Administration

FOR IMMEDIATE RELEASE                                                                       

Wednesday, September 25, 2024

"Serious Flaws" with Recently Awarded State Medicaid Contracts Prompt Probe Into Conflict of Interest Concerns Under Hobbs Administration

PHOENIX, ARIZONA—Potential conflict of interest concerns under the Hobbs Administration are under a microscope again, after a judge found "serious flaws" with how Arizona's Medicaid program recently awarded $15 billion worth of contracts.

Back in August, an administrative law judge concluded the Arizona Health Care Cost Containment System (AHCCCS) improperly awarded contracts for healthcare services for 26,000 elderly and physically disabled individuals enrolled in the Arizona Long Term Care System. The determination was based on several factors, including violations of statutes and rules by AHCCCS, prejudice, a lack of transparency, contract awards based on best interests of the agency and not the state, an arbitrary and flawed ranking system of bid proposals, as well as deceptive criteria provided by AHCCCS to health care companies on the evaluations of their bid proposals.

While the judge recommended cancellation of the procurement and issuance of a new request for bid proposals, AHCCCS announced this month it would not do so, and instead, would delay the transition to the newly awarded health plans by one year, commencing in October of 2025.

The news comes just two months after local media exposed Governor Katie Hobbs for rewarding a dysfunctional group home, Sunshine Residential, millions in taxpayer dollars following the acceptance of campaign donations made by the provider to both Hobbs and the Arizona Democratic Party.

In response, Senator T.J. Shope, Chairman of the Senate Health & Human Services Committee, is conducting a probe into the alleged mismanagement of taxpayer dollars and the unfair advantage companies are receiving as a result of potential conflicts of interest within the Hobbs Administration.

"I'm deeply disturbed by what's transpired under the Hobbs Administration, from the Sunshine Residential pay-for-play scheme, to now this procurement scandal. The integrity of state government and its spending practices have been compromised," said Senator Shope. "As chairman of the Senate Health & Human Services Committee, it's my goal to get to the bottom of these disputes and determine whether in fact preferential treatment is being provided using the tax dollars of hardworking Arizonans, and whether our citizens who rely on these critical services are being protected. I will be on a fact-finding mission in the coming months and will determine the best course of action to address these cases, whether through legislation, or other legal avenues."

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For more information, contact:

Kim Quintero

Director of Communications | Arizona State Senate Republican Caucus

kquintero@azleg.gov