State lawmakers on Thursday rejected a bill to crack down on sober living homes that had already unanimously passed the Senate, opting instead to back a different proposal that is opposed by Democrats.
Following hours of testimony and debate, the House Health and Human Services Committee advanced Senate Bill 1361 on a party-line 6-4 vote. On a 3-7 vote, the panel defeated Senate Bill 1655.
Both bills were introduced to address the sober living home scandal that was laid bare almost a year ago when state prosecutors and health agency officials announced a sprawling Medicaid fraud scheme that targeted Indigenous Arizonans.
The fraudulent healthcare facilities have remained unchecked for years across the Phoenix area, targeting Indigenous people who are enrolled in Arizona’s Medicaid program, resulting in many becoming displaced within the city or losing their lives.
State officials have called the scheme a “humanitarian crisis” and a “stunning failure of government” since the issues were identified years ago and nothing was done to stop the predatory behavior.
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SB1361, sponsored by Republican Sen. Frank Carroll, aims to modify the licensing, oversight, and regulations of sober living homes, increase the civil penalty cap from $500 to $1,000 for violations and define “sober living home” in state law.
Rep. Matt Gress, a Phoenix Republican with a similar bill that the Senate is considering, explained that the legislation is a bipartisan effort to address the crisis of unlicensed sober living homes.
He said it includes a provision to implement criminal penalties for licensed health care institutions that do business with unlicensed sober living providers.
“If you’re going to be working with unlicensed facilities in any way, we’ll have greater enforcement to come after you,” Gress said.
A handful of people came forward to testify in support of Senate Bill 1361, noting that it provides a way to address the issues associated with sober living homes across the state.
Meanwhile, health care organizations and providers marshaled their efforts to oppose SB1655, which was sponsored by Sen. Theresa Hatathlie, D-Coal Mine Mesa.
Most of the testimony opposed the bill, and much of the criticism was aimed at the language used to define behavioral health entities, which was too broad and would inflict unnecessary measures on health facilities and professionals.
Hatathlie, who is Navajo, told the committee that change is needed — even if it’s scary.
“Change is what people are afraid of,” Hatahlie said.
Committee Chairman Steve Montenegro was among those who voted against the bill. He said the testimony made it clear that the legislation was not ready in its current form, and he could not, in good faith, recommend it pass.
“I agree that there is no question that this is a huge problem in this state,” he said, adding that he understands how much it has affected people and their lives. “But I also understand that we have a legislative responsibility.”
He said it was clear to him that Hatathlie was unwilling to amend her measure to address the complaints raised by health care providers.
But Hatathlie rejected that argument and said the Senate extensively amended the bill to do just that. She said the language many of those who testified said they wanted relates to portions of the bill that she has been asking stakeholders for bill language on for weeks.
“It’s at the (eleventh) hour when, all of a sudden, they came out of the woodwork,” she said of the criticisms they lodged against the bill.
Hatathlie said she was surprised that the four Democrats on the committee all voted against her bill and was frustrated that the committee sided with the health care providers that, in her estimation, are culpable for what happened.
“The people who are doing the grifting are licensed individuals,” Hatathlie said. “They fed that monster of unlicensed sober living homes, and today’s vote just shows that that’s who they’re protecting.”
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