Senator Werner Reform Werner Reform Targeting Loopholes Exposed by Arizona Medicaid Fraud Crisis Passes Legislature

ARIZONA, June 12 - FOR IMMEDIATE RELEASE
Thursday, June 11, 2026

PHOENIX, ARIZONA—A key reform stemming from Senator Carine Werner's ongoing investigation into fraud, abuse, and oversight failures within Arizona's Medicaid system is heading to Governor Katie Hobbs after receiving final legislative approval and being transmitted to her desk today.

SB 1171 requires individuals seeking to own, operate, or control behavioral health facilities in Arizona to obtain Level I fingerprint clearance cards as a condition of licensure beginning in 2027. The reform strengthens oversight of facilities serving vulnerable patients, helps keep bad actors out of the system, and protects taxpayer dollars from fraud and abuse.

The legislation follows months of legislative oversight hearings led by Senator Werner examining the multibillion-dollar AHCCCS fraud crisis, which exposed widespread abuse within Arizona's behavioral health system, devastating impacts on Native American communities, disruptions in access to treatment, and significant losses of taxpayer dollars.

“Over the last year, we've heard heartbreaking testimony from families who lost loved ones, tribal members who were exploited by criminals masquerading as healthcare providers, legitimate treatment centers struggling to survive, and taxpayers who watched billions of dollars disappear while government agencies failed to stop the fraud," said Senator Werner. "What happened in Arizona was not simply a case of waste or mismanagement. Vulnerable people battling addiction were trafficked, manipulated, abandoned, and treated as commodities in a scheme that enriched bad actors at public expense. At the same time, providers who were genuinely helping people were buried under bureaucracy and left fighting for reimbursement while patients lost access to care. SB 1171 is a simple but important safeguard. If someone wants to own, operate, or have a controlling interest in a behavioral health facility receiving public dollars and serving vulnerable patients, they should at minimum pass a background check and obtain a fingerprint clearance card. This bill won't solve every problem that has been uncovered through our investigation, but it is another step toward restoring integrity to a system that failed both taxpayers and the people it was supposed to protect. Arizonans deserve accountability for every public dollar spent, and patients deserve confidence that the individuals overseeing their care have been properly vetted."

SB 1171 is one of several reforms introduced by Senator Werner following a series of legislative hearings examining AHCCCS oversight failures, patient brokering schemes, fraudulent billing practices, barriers to treatment, and ongoing concerns raised by whistleblowers, providers, and tribal communities across Arizona.
The bill now awaits action by Governor Hobbs.

###

For more information, contact:

Kim Quintero

Director of Communications | Arizona State Senate Republican Caucus

kquintero@azleg.gov

‍