Sen. Theresa Hatathlie defended the governor’s withdrawn AHCCCS and ADHS nominee today after Republican Sen. Jake Hoffman criticized the Hobbs administration for its handling of the sober living homes fraud scandal. 

Hatathlie has long been an advocate for Native American Arizonans impacted by the sober living home fraud. She is Navajo and her district encompasses part of the Navajo Nation.

In 2023, Hatathlie’s niece died in a sober living home while lawmakers were attempting to pass legislation to curb Medicaid fraud perpetrated by some operators of the homes. During Thursday’s Senate floor session, Hatathalie defended Heredia and Cunico for dealing with the aftermath of the fraud’s discovery.

“I want to be very clear about that. The fraud and the bleed happened during the administration of Doug Ducey. That happened within their administration, and these individuals came into this office and they had courage to face the criminals, and tried to put blocks and tried to fix a system that was intentionally put in place to bleed the system,” Hatathlie said.

The sober living home fraud saw AHCCCS write checks to behavioral health facilities that claimed to be assisting Native American patients with mental health and addiction issues. The fraud was uncovered in 2023 and went back to 2019.

In a statement on Heredia’s nomination Wednesday, Hoffman called her response to the crisis “incredibly disturbing,” citing reports of patients being kicked out of sober living homes after AHCCCS abruptly suspended providers. He also said the agency caused harm to legitimate providers who were not committing fraud, likely referring to a lawsuit filed by over 70 providers earlier this year. 

“We are left with a broken system due to Heredia’s mismanagement, and our vulnerable

populations are caught up in this collapse,” Hoffman’s statement said. 

Hatathlie criticized officials from Ducey’s administration and former attorney general Mark Brnovich, saying she frequently reached out about issues she had heard about in her community before the scandal broke, but she  never got responses. In comparison, Hatathlie said it has been much easier to work with Hobbs and her administration on the issue.

“My tribal nations were heard, I was heard, and it’s in that process that much has been accomplished,” Hatathlie said.

She did not fault either nominee for stepping away from their positions.

“Sometimes, as an individual, it’s better that you step away from negativity,” Hatathlie said. “You don’t need that in your life, especially when we refuse to talk about the issues, and we prefer to threaten and have bullying tactics that continue to really, at the end of the day, condone the fraud, the exploitation and the theft of billions of dollars.”

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