AZ Medicaid agency bans clinic over alleged fraud using AI, recruitment bonuses
AHCCCS terminates AZ clinic over fraud allegations
A behavioral health clinic on tribal land faces an FBI investigation and a five-year Medicaid ban for allegedly using AI for billing and paying $500 recruitment bonuses. FOX 10's Justin Lum has the story.
TUBA CITY, Ariz. - There is another crucial development in a story first brought to light last month. The state’s Medicaid agency is cracking down on a behavioral health provider, and those linked to the clinic are facing credible allegations of fraud.
Arizona's Health Care Cost Containment System (AHCCCS) says the man behind the provider was operating behind the scenes and offering bonuses for the recruitment of Native American patients.
What we know:
It is known as the AHCCCS exclusion list, which bars participation in federal and state healthcare programs. Once a behavioral health provider’s suspension over credible allegations of fraud is upheld, they can be terminated by the state’s Medicaid agency. That is exactly what happened to Sacred Circles of Healing and Wellness, and it was quick.
Denis Artiles is a familiar name to the investigation, included in a letter from Arizona’s Health Care Cost Containment System, known as a notice of termination of a provider participation agreement aimed at Sacred Circles of Healing and Wellness, located in Tuba City on tribal land. AHCCCS says Artiles is "actively involved" in the daily operations of the behavioral health provider, handling employee payroll and funding gas for transportation vehicles using money from his other company, Mountain Vista Health.
Arizona behavioral health clinic suspended for allegations of Medicaid fraud, ties to terminated provider
Sacred Circles of Healing and Wellness faces an FBI investigation and suspension by AHCCCS over credible allegations of fraud, that include using AI to generate clinical notes and offering bonuses for client recruitment.
The state is calling him out because he was the CEO of Newfound Hope, another terminated provider extensively reported on back in 2023. Newfound Hope had already been suspended in February 2023 over allegations of fraud, and a judge upheld the suspension a year later.
AHCCCS terminated Newfound Hope as a provider, which brings the focus to Coleen Chatter, the CEO of Sacred Circles of Healing and Wellness. AHCCCS says she was supposed to disclose Artiles’ involvement, but failed to do so.
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From December 2025 through May 2026, the state paid Sacred Circles nearly $295,000 for services provided. As previously reported, the AHCCCS inspector general says Sacred Circles engaged in Medicaid fraud, billing for services that could not be provided as claimed. Investigators say Artiles was offering $500 bonuses for clients brought to Sacred Circles, and that staff used ChatGPT to generate clinical notes to copy and paste for billing purposes. The clinic did not have to be licensed by the state’s Department of Health because it was on tribal land, even while enrolled with AHCCCS.
What's next:
As of June 22, Artiles, Chatter, and Sacred Circles of Healing and Wellness are excluded from participating in the AHCCCS Medicaid program for five years. At the federal level, they are also under investigation by the FBI, according to the Arizona Attorney General's Office.
The Source: Information in this report was gathered from Arizona's Health Care Cost Containment System (AHCCCS), the AHCCCS Inspector General, the state's Department of Health, the Arizona Attorney General's Office, and previous FOX reporting.