Tempe has been the focus of a health department probe after FOX 10 reported the unauthorized use of a hotel property as a rehab center, resulting in NewFound Hope surrendering its licenses. The Arizona Department of Health Services (DHS) investigation pinpointed several violations at a site that was once a Ramada Inn on North Scottsdale Road, and not authorized to dispense care to recovering patients. According to FOX 10 Phoenix, NewFound Hope has given up licenses for two locations and can no longer apply for a healthcare institution license or sober living home license for two years.
Documents uncovered by DHS revealed that the hotel housed around 100 patients who were in recovery. Despite a "cease and desist" order issued last May, Denis Artiles, CEO of NewFound Hope, admitted to FOX 10 Investigates that they remained operational, insisting "Yes, we are," despite the order and subsequent revocations of their licensing. In an investigation by FOX 10, former employees reported that the operation prioritized quantity over quality, often allowing residents to drink and offering minimal supervision, an environment where children were reportedly present.
The state's Medicaid agency, the Arizona Health Care Cost Containment System (AHCCCS), has put a suspension on the clinic's operations due to allegations of Medicaid fraud. This followed a report by FOX 10 that NewFound Hope was paid almost $13 million from May 2021 until February 2023. Allegations against the company include not adhering to medical documentation guidelines, providing services without clinical oversight, and excessive billing. On its part, NewFound Hope is appealing the suspension in lower court, with an administrative law judge's decision to uphold the suspension until AHCCCS deemed evidence of fraud insufficient.
Amid the fallout, Navajo Nation Police led journalists to the implicated property, as Harland Cleveland commented on the unusual lack of typical hotel activity. The "decommissioned Ramada" continued operations, according to DHS, and health officials have described an escalating problem with unlicensed rehab homes and facilities in Arizona. Katrina Trinchera, Deputy Bureau Chief of Medical Facilities Licensing at DHS, lamented the challenge of rapidly enacting tighter regulations, stating "The department has so much leverage and I do think that with more statutes and more rules and more restrictions in being able to qualify for a license will absolutely help, but those things take time."
This investigation has brought to light a larger issue concerning vulnerable populations and the misuse of Medicaid funds. As Arizona grapples with the problem of unlicensed rehabs, the state's health department has stepped up its vigilance. In the meantime, activity continues at the Tempe hotel site, and it remains to be seen how NewFound Hope's legal challenges will unfold. Despite the gravity of the situation, NewFound Hope has yet to release a statement in response to these claims.
