Phoenix-based addiction treatment facility operated out of motel with no running water
Investigative reporters in Arizona have uncovered details about an unlicensed drug addiction housing facility, operating out of a motel, that is linked to a multi-million-dollar Medicaid fraud case.
According to a report from FOX 10, the alleged "addiction recovery" housing operation, Thomas Suites, was part of a $2.5 billion scandal that displaced thousands of patients seeking help—many of whom were Native Americans from the Phoenix area. The investigation revealed that Thomas Suites was essentially a seedy motel where drug use and crime were rampant. Living conditions were reportedly so poor that the facility even lacked running water and flushable toilets.
Despite the organization having no license, it housed some 150 residents receiving counseling and drug testing, many of whom were being treated by a local clinic linked to a known Medicare billing fraud scheme. That clinic, New Life Wellness, has since been shut down over “ghost billing” and other allegedly fraudulent activities.
The piece of the puzzle that's only now being uncovered was the the role of Thomas Suites. Patients housed at the motel were sent to New Life multiple times a week, often receiving minimal or inadequate therapy for their ongoing struggles with substance abuse. In some cases, even deceased patients were fraudulently billed to Medicaid as if they were still receiving treatment.
Meanwhile, drugs at Thomas Suites were readily available, fueling ongoing addiction and creating a feedback loop. Thomas Suites is also no longer open for business, but investigative reporters are questioning how it was able to operate for years without regulators or authorities taking notice.
The scheme operated between November 8th, 2020 and May 31, 2023, prosecutors said. In early 2024, the proprietor of New Life pleaded guilty to felony fraud charges. As part of a plea deal, he was ordered to pay $25 million in restitution to the state.
However, Thomas Suites was shut down only "months ago," according to reporters.
For more on this developing story, read the coverage from FOX 10 at the link below.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.