More fraud? State senator say Arizona gives $6B yearly in improper Medicaid payments

(The Center Square) - Arizona is facing $6 billion in improper state Medicaid payments yearly, according to state Sen. Janae Shamp.

Shamp, R-Surprise, gave a presentation to the Arizona Senate Health and Human Services Committee on Thursday about what she called fraud.

“We cannot put our heads in the sand and act like there’s not fraud, especially when we have people going hungry in the state. It’s unacceptable,” she told lawmakers.

Of these improper payments, 63.4% come from the federal government, and 36.6% come from Arizona’s general fund, she explained.

This means $2.2 billion in Arizona taxpayer money is going toward improper Medicaid payments, according to Shamp.

During the hearing, Shamp noted only 23% of the state’s Aged, Blind or Disabled Medicaid-enrolled patients underwent any form of verification.

She said when these enrollees had their eligibility checked, 34% failed, but were not removed from the program.

“If we utilize the numbers and we extrapolate it through the transactions that were analyzed, we're looking at over 130,000 ineligible enrollees that may be drawing benefits in the state of Arizona,” Shamp explained.

The senator said these people are “robbing the system that is supposed to provide resources for the vulnerable.”

Shamp said her investigation into Arizona’s ABD Medicaid program also showed thousands of enrollees have “substantial liquid assets."

Federal eligibility for ABD Medicaid limits liquid assets to no more than $2,000, she said.

Arizona had more than 5,000 people with liquid assets exceeding $50,000, the senator noted.

Furthermore, Shamp's presentation showed Arizona’s ABD Medicaid program had 18 millionaires enrolled.

Arizona is one of two states in the U.S. that do not have an asset limit for its ABD Medicaid program because the state has filed for a waiver from that requirement, she noted.

Shamp called the asset limit exemption a “huge policy gap” in Arizona, saying a piece of legislation is being worked on this year to eliminate the exemption.

Currently, Arizona is at a “federal compliance risk,” she said, adding that the Trump administration has frozen certain state funds for other states.

The Trump administration halted specific federal funds earlier in January for California, Colorado, Illinois, Minnesota and New York because of fraud concerns in state-administered programs.

On top of all this, Shamp said Arizona has nearly 50,000 residents receiving state aid while enrolled in another state assistance program. This information comes from the federal government’s Public Assistance Reporting Information System.

The beginning of the “inadequate fraud prevention” began in 2023 when Gov. Katie Hobbs appointed Carmen Heredia as the director of the Arizona Health Care Cost Containment System, Shamp said.

In April 2025, Heredia “resigned abruptly” without having to answer questions from legislators, Shamp said.

A month after Heredia’s resignation, Shamp said, she sent this information to Hobbs’ office and the Trump administration, but said their responses were “less than ideal.”

Shamp said these findings should be referred to Arizona Attorney General Kris Mayes and Attorney General Pam Bondi for prosecution.

“This is fraud. This is criminal,” she explained.