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Arizona Takes Action Against Fraudulent Rehab Centers Exploiting Vulnerable Communities Many Native individuals seeking help for substance abuse issues express disillusionment with residential facilities and clinics, which have failed to deliver on promises of sobriety and stability.

By Madeline Garfinkle

Key Takeaways

  • Fraudulent rehab centers exploit Native Americans, leaving them stranded and unsupported.
  • Arizona takes legal action against fraudulent providers, seeking justice for victims and better healthcare safeguards.

Opinions expressed by Entrepreneur contributors are their own.

Reva Stewart and Jeri Long, of the Navajo Nation Reservation in Phoenix, Arizona, offer cold water bottles, snacks, and hygiene kits to unhoused individuals clustered in Madison Park on a hot day. As they offer aid, Stewart and Long inquire about the whereabouts of the people they meet, carefully documenting their names, birthdates, and recent locations.

The information-gathering stems from widespread disappointment among the community regarding promises made by residential facilities and clinics that claim to assist with substance abuse issues, NPR reported. Many here, like Wendell Smith, had hoped to overcome their addiction and regain stability through treatment.

Related: An 87-Year-Old Holocaust Survivor Lost $2.8 Million to an Online Romance Scam

"I wanted to get sober," Smith told the outlet. "And I wanted to get back on my feet again. They say that they can help me with a job and help me with this and that. I never seen none of it."

Smith added that, upon arriving at the facility, some residents were drinking in the home, and that the classes offered seemed "sketchy."

Similar stories of disappointing facilities circulate among the group at Madison Park, all of whom are of Native descent. Some facilities locked residents in their rooms, while others provided daily cash allowances that were spent on alcohol within the facility. Managers often turned a blind eye to violence and drug abuse. These stories echo from Montana to New Mexico, leaving many Native people stranded far from home and struggling with addiction.

Autumn Nelson sought help for her alcohol addiction last spring, encouraged by fellow Blackfeet Nation members who recommended a rehab center in distant Phoenix, Arizona, ABC reported. The center provided her with a one-way flight, but she was abruptly kicked out after questioning their inadequate staffing and services tailored to Native Americans.

"All of a sudden I was out in the 108-degree heat in Phoenix, Arizona," Nelson told the outlet. "I was scared, and didn't know where to go."

A 2021 survey by the Substance Abuse and Mental Health Services Administration found that nearly 29% of American Indians and Alaska Natives needed substance abuse treatment, only 3.5% of which actually receive it.

Related: An 81-Year-Old Is Suing Over an Alleged Scheme That Caused Her To Lose Her Home of 3 Decades

Of those who do receive it, data is unknown on how much is legitimate. Individuals like Nelson and Smith are among countless struggling individuals who fall victim to scams that exploit the American Indian Health Program, a Medicaid plan that enables providers to bill directly for services given to Native Americans and Alaska Natives.

The Navajo and Blackfeet Nations have declared public health emergencies to assist affected members, with the Navajo Nation launching Operation Rainbow Bridge to guide individuals to legitimate programs, ABC reported. Arizona has suspended Medicaid payments to the center where Nelson was sent, along with over 300 other providers due to "credible allegations of fraud." Stricter controls, including background checks and site visits, have been imposed on high-risk behavioral health providers.

"That earlier situation traumatized me," Nelson told ABC. "But now it has encouraged me to stand up."

Unfortunately, the addiction treatment industry has been subject to acts of predatory and exploitative practices for decades. Because the centers don't undergo the same oversight as other healthcare facilities, conditions or practices that can be harmful, inadequate, or triggering have the ability to operate without proper regulation.

In 2019, Ali Ahmed, an addiction recovery mogul in South Florida, pleaded guilty to conspiring to defraud insurers of $21 million for rehab services involving excessive urine analysis testing. In 2022, Nicholas DeSimone of New Jersey made $15 million in three years by exploiting the largely unregulated addiction recovery industry, engaging in illegal practices such as double-billing, inducements to attract patients with generous insurance coverage, and falsifying urine tests. In 2018, comedian and host John Oliver called the rehab industry "dangerously unregulated."

"This system clearly badly needs more expertise and oversight," the host added. "And until then, it may be really important for all of us to understand that, at present, the word 'rehab' is so broadly defined as to be close to meaningless."

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

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