Last week, Arizona State Senate President Pro Tempore T.J. Shope (R-LD16) announced that the Arizona Health Care Cost Containment System (AHCCS) improperly awarded its most recent contracts. The investigation stemmed from allegations that Governor Katie Hobbs awarded those contracts as part of a “pay-to-play” scheme for contributions to Hobbs’ election campaign. According to the administrative law judge reviewing the case, “the Arizona Health Care Cost Containment System (AHCCS) improperly awarded contracts for healthcare services for 26,000 elderly and physically disabled individuals enrolled in the Arizona Long Term Care System.”

Senator Shope released a statement that the “determination was based on several factors, including violations of statutes and rules by AHCCCS, prejudice, a lack of transparency, contract awards based on best interests of the agency and not the state, an arbitrary and flawed ranking system of bid proposals, as well as deceptive criteria provided by AHCCCS to health care companies on the evaluations of their bid proposals.” Shope added that, “while the judge recommended cancellation of the procurement and issuance of a new request for bid proposals, AHCCCS announced this month it would not do so, and instead, would delay the transition to the newly awarded health plans by one year, commencing in October of 2025.”

Shope’s statement expressed concern over Hobbs’ judgment. He said, “I’m deeply disturbed by what’s transpired under the Hobbs Administration, from the Sunshine Residential pay-for-play scheme, to now this procurement scandal. The integrity of state government and its spending practices have been compromised. As chairman of the Senate Health & Human Services Committee, it’s my goal to get to the bottom of these disputes and determine whether in fact preferential treatment is being provided using the tax dollars of hardworking Arizonans and whether our citizens who rely on these critical services are being protected.”

On June 10, 2024, the Arizona Globe reported on AG Kris Mayes’ investigation into the Arizona Department of Child Safety approval of a massive increase in daily rates paid to Sunshine Residential Homes Inc. for child care. The investigation focused on the relationship between the payment increase and a $400K donation to Katie Hobbs’ campaign. The issue came to light after the state denied similar rate increases to other group homes.

It remains unclear what the next steps will be. Still, Senator Shope vows to pursue these allegations, stating, “I will be on a fact-finding mission in the coming months and will determine the best course of action to address these cases, whether through legislation, or other legal avenues.”