by Hannah Bassett, Arizona Center for Investigative Reporting, and Mary Hudetz, ProPublica, photography by Adriana Zehbrauskas, special to ProPublica

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Before her fifth birthday, Rainy had experienced a lifetime of trauma. As an infant, she witnessed violence at home before child welfare authorities intervened and her parents were incarcerated. Night terrors followed. Then, she endured the death of her great uncle who had taken on the role of dad.

She didn’t speak until she was nearly 5. Any separation from her great aunt-turned-adoptive mother, Lisa Enas, triggered panic attacks, and reminders of her great uncle’s death left her nearly inconsolable.

With counseling, however, Rainy, now age 7, with a long, thick braid and a bright smile, grew more joyful and independent. She could hold conversations and spend time away from Enas without panicking. She was selected for her school’s gifted and talented program. Home life on the Gila River Indian Community in Arizona, where her bedroom walls were lined with stuffed animals and family photos, steadied.

But that progress came to a halt last October, after a spiraling Medicaid scandal that targeted thousands of Native Americans exploded into public view.

Arizona officials announced they were investigating a massive fraud scheme in which people had been lured into fake substance abuse treatment programs, where providers exorbitantly billed Medicaid for treatments they did not deliver. Some were alleged to have kidnapped patients and held them against their will. The fraud has cost the state as much as $2.5 billion since 2019, state officials said.

In response, the Arizona Health Care Cost Containment System, or AHCCCS, terminated contracts with scores of facilities as authorities investigated them. The agency also swiftly suspended Medicaid reimbursements to hundreds of other providers that it accused mostly of overbilling or paperwork errors. Among those suspended was Desert Rain Behavioral Health Services, the Tempe provider that was treating Rainy and 260 other patients, all insured by the state Medicaid agency’s American Indian Health Program.

AHCCCS accused Desert Rain of overbilling and failing to have the license needed to treat children — allegations that the clinic would eventually resolve, but not before its ability to care for patients was disrupted.

When AHCCCS launched its investigation, officials said their top priority was the safety of patients like Rainy. Yet even as the agency says it considered whether people would lose behavioral health services before it took action, its efforts left hundreds without treatment or counseling, the Arizona Center for Investigative Reporting and ProPublica have found.

The agency told the very behavioral health providers it accused of fraud that it was their responsibility to ensure patients continued to receive treatment, despite halting their reimbursements. Some closed. Others scaled back services or paid out of their own pocket while they challenged the allegations against them.

For patients, the state established a hotline to connect them to treatment, housing or transportation back to their communities. But it too has fallen short in addressing the fallout from the crisis.

AHCCCS said it had no record of what happened to the majority of the hotline’s 11,400 callers, largely because after six months it stopped tracking outcomes for people who did not stay in a hotel at the state’s expense. Of 4,100 people who received temporary lodging after calling the hotline, the state said only about 150 requested referrals to behavioral health centers. According to call data obtained by the news organizations, more than 575 ended up unsheltered, increasing their chances of relapse or even death.

In an interview, Marcus Johnson, AHCCCS’ deputy director of community engagement and regulatory affairs, said AHCCCS conducted outreach to make sure patients knew about the hotline. Yet advocates say far more people were unaware of the hotline or could not call it because they did not have phones.

“There’s always opportunity for us as an agency to improve,” Johnson said. “But like I said, we’ve done a great amount of outreach to try to get the word out as much as possible, not only to victims and our members, but also to all of the providers.”

Enas, Rainy’s adoptive mother, said no one ever told her about it as she struggled to find counseling for her daughter. (AZCIR and ProPublica are identifying Rainy, who does not share a last name with Enas, by her nickname to protect her privacy.)

Enas braids Rainy’s hair at the family home on the Gila River Indian Community.

Thirty behavioral health providers that AHCCCS has accused of fraud since the spring of 2023 have been cleared to again receive Medicaid reimbursements, though the agency cautioned providers that it could pursue further actions against them amid ongoing investigations. Most reached settlement agreements or proposed corrective action plans, according to records provided to the news organizations by AHCCCS.

Desert Rain, however, was among a handful of providers that did not have to compensate the state or rectify their practice, according to documents. After a four-month suspension, Desert Rain was informed in a February letter that it could resume receiving payments from the state because it had addressed the accusations.

AZCIR and ProPublica spoke to six of the 30 facilities that had their suspensions lifted. The suspensions, delayed payments and enhanced billing requirements resulting from the state crackdown have jeopardized their ability to stay in business, they said. Almost everyone who operated behavioral health facilities and spoke to the news organizations asked to remain anonymous out of concern they would be targeted by AHCCCS for criticizing the agency.

AHCCCS has maintained that its actions were necessary and appropriate to ensure bad actors could no longer exploit Medicaid. It also told the news organizations that it is always willing to help patients find providers.

Desert Rain owner Alexis James said that since the clinic was cleared, the state has largely denied or not processed its claims for patients insured by the American Indian Health Program. As a result, she is unable to serve her former patients. She said she is concerned many people from the Gila River Indian Community — and other Indigenous communities — have gone months without treatment because so many facilities have shut down or are not accepting new American Indian Health Program patients due to financial uncertainty.

“There are no providers available to see these clients who are higher risk, who are suicidal, who are high trauma,” James said. “What makes me so angry is it’s not anyone but the Indigenous population.”

Enas said she recognizes the state had to stem the widespread fraud but regrets it came at such a high cost. Rainy regressed without counseling, while Enas unsuccessfully sought help from AHCCCS and the local hospital.

The grief Rainy was learning to manage now overwhelms her more frequently. On a recent afternoon, within a matter of minutes, Rainy turned from chattering happily about her school day to sobbing as she looked over a favorite photo collage of her late adoptive father.

Enas comforts Rainy.

“I miss him so much,” Rainy cried. “Why did he have to die when I was 3?”

Enas held Rainy until the wave of sadness eventually passed. When they sat down at the dinner table, where Rainy announced she was joining the school color guard, Enas looked on with a mixture of pride, exhaustion and worry.

“I need to know, who is gonna actually help me?” Enas said. “Who’s going to actually listen to me? Who’s going to help my child? Because I’m fighting for her.”

A Crisis Goes Undetected

As early as 2020, state data showed a spike in billings for behavioral health care covered by the American Indian Health Program.

AHCCCS’ contracts with managed care organizations, like Mercy Care and UnitedHealthcare, use fixed rates for Medicaid reimbursement. But the American Indian Health Program — available only to American Indians and Alaska Natives — was different. Federal requirements led AHCCCS to structure the program under a “fee-for-service” model, which allowed health clinics and other providers to set their own rates and directly bill the agency. It also broadened access in areas not served by the network of insurance companies for a population that has historically faced significant barriers to health care. But it left the program vulnerable to fraud, experts say, much like other fee-for-service plans offered at the federal level.

“It was a claims shop,” AHCCCS’ Johnson said, noting the plan lacked safeguards used by managed care organizations to prevent waste, fraud and abuse.

One behavioral health clinic collected more than $200,000 a day on average through the American Indian Health Program, according to an audit of AHCCCS. The flood of cash spurred predatory recruitment of new Native American patients from across the country just as the federal government’s COVID-19 public health emergency allowed Medicaid programs to relax enrollment and screening requirements.

Will Humble, a former director of the Arizona Department of Health Services, said AHCCCS’ failure to monitor its management of Medicaid billing and reimbursements allowed the American Indian Health Program to “completely detonate.”

A view of neighbors’ houses from Enas and Rainy’s family home on the Gila River Indian Community

Reva Stewart, a community advocate in Phoenix who is Navajo, was, in the fall of 2022, among the first to sound the alarm on social media about providers’ recruitment efforts in the city and on reservations. For months, she had observed white vans pull up to city parks in search of new patients. She learned fraudulent providers were also sending vans to reservations across Arizona, New Mexico and Montana in search of patients.

Newly elected Gov. Katie Hobbs announced an initial wave of provider suspensions in May 2023. As the agency continued reviewing billing records for irregularities, more followed. Community members, patients and employees of licensed behavioral health providers had alerted authorities to the suspected fraud, said AHCCCS Director Carmen Heredia.

When suspended providers ignored the agency’s calls to ensure ongoing care, the agency said it sent demand letters and threatened legal action. AHCCCS has not pursued any provider for failing to transition patients’ care, saying it hasn’t needed to take that step.

“When our legal office has reached out to providers in this situation, they have complied,” Johnson said. “They have worked with us to transition care for their members.”

Thousands Call Asking for Help

State housing officials warned AHCCCS leadership nearly a year before it began suspending providers that reforms could trigger a surge in homelessness, according to emails reviewed by AZCIR and ProPublica. Indeed, many people faced homelessness as the state suspended behavioral health payments because some unscrupulous providers had housed patients just so they could bill for them, advocates say.

Patients in the roughly 25 suspended facilities outside the Phoenix area had few options for assistance once AHCCCS took action; the state hotline’s offer of temporary housing was limited to three hotels in the metro area.

Stewart said the state’s response has been inadequate for such a massive crisis that has rendered people homeless. She and other advocates, organized under the name Stolen People, Stolen Benefits, regularly traverse the Phoenix metro area with meals and sanitary kits to assist unhoused people who haven’t been helped. Many contact her directly.

Raquel Moody, who is from the Fort Apache Reservation in northeastern Arizona, recounted how at the height of the crisis she bounced from one fraudulent treatment home to the next. She had achieved sobriety in the past, before relapsing, and such treatment programs had helped her, including Another Level of Community Service, which served people just released from prison. (Another Level of Community Service is one of the 30 behavioral health providers that had its suspension lifted by AHCCCS after a monthslong investigation.)

From December 2022 to the end of 2023, Moody spent time in more than a half-dozen programs in the Phoenix area that promised, but never provided, treatment. Soon after arriving at each new facility, she realized legitimate treatment classes would not be offered. When she spoke up about it, the operators would kick her out.

Not only was there no treatment, she said, but lax operators made it more challenging to get sober. The owners of one facility downplayed her complaint that alcohol was being consumed in the house, claiming the drinking wasn’t harming other residents. They asked her to leave. Once, providers left her for days in an unfurnished home with nothing to do, which she described as a nightmare scenario for someone trying to overcome addiction.

“Some of us, we were looking for the right programs,” she said. “But during this whole scheme and everything, it was really hard. It was really hard to get sober.”

After the final home she was in was suspended in December 2023, no one from the state stepped in to help, she said.

She’s now in recovery and conducts homeless outreach with Stewart.

Desert Rain owner Alexis James “I’m Still Being Punished and Not Paid”

Following Desert Rain’s suspension in September 2023, James, the clinic’s owner, said she continued serving patients for as long as she could.

The clinic was roughly two years into treating Rainy, who had been diagnosed with prolonged grief, anxiety, attention-deficit/hyperactivity disorder and obsessive-compulsive disorder. It was a two-hour round trip to each appointment, but her progress made the drives worth it, Enas said.

Desert Rain, which opened 13 years ago, was one of several clinics that AHCCCS accused of treating children without the necessary state health department license. The Medicaid agency also said the treatment center had billed for some patients after their deaths and overbilled for certain mental health assessments and rehabilitation services.

As she fought the allegations, James laid off all but three of her 35 employees and coordinated with Gila River case managers to transfer most of the facility’s 260 patients to other providers. Many of the patients found that nearby facilities were also facing fraud allegations from the state and couldn’t treat them. James offered limited services at no cost to roughly half a dozen high-need clients, including Rainy.

Nearly every provider who spoke with AZCIR and ProPublica and had resolved their fraud allegations said they tried to serve clients for as long as they could without Medicaid reimbursements. James said she almost went bankrupt. She drew on personal funds to cover Medicaid patients’ treatment and took out high-interest loans that left her in financial peril.

State records show James cleared the allegations by providing evidence of an active license to work with kids and documentation explaining the handful of claims that were inadvertently submitted after a patient’s death during the height of the COVID-19 pandemic, when it often took days for word of a patient’s passing to reach outside the reservation’s hospital.

The agency also imposed a moratorium on new provider enrollments and enacted administrative reforms that included capping reimbursement rates for intensive outpatient treatment, and fingerprinting and background checks for more behavioral health providers under contract with AHCCCS. The agency also adopted more stringent billing procedures and revamped its process for reviewing claims.

Since the agency implemented the reforms, spending on American Indian Health Program services has declined by two-thirds, according to data released by AHCCCS in July.

“While there is still work to be done, this data reflects that our efforts to combat fraud are working,” Heredia said in a news release. “We have transformed AHCCCS into a new agency that puts our members first, and always strives to get them the help they need.”

This abrupt decrease in payments to providers also reflects the inability of patients like Rainy to get treatment.

In February, AHCCCS paid Desert Rain more than $140,000 for care provided prior to the suspension. But the agency has not reimbursed the clinic for any services billed under the American Indian Health Program since its reinstatement, according to James.

“I’m still being punished and not paid,” James said. “Essentially, we’re still suspended.”

Records reviewed by AZCIR and ProPublica showed that AHCCCS repeatedly pressed the facility to submit additional documentation required for claims to be approved. The agency also arranged a meeting to discuss the billing process. AHCCCS did not respond to questions about the agency’s billing decisions.

In a survey of 229 providers by the Arizona Behavioral Health Providers Association, an industry trade group, half of respondents reported anonymously this spring that they were close to shutting down due to issues with AHCCCS since the spring of 2023, including delayed reimbursements. Another 20% reported they had either already closed or were filing for bankruptcy. The data was presented to AHCCCS earlier this year.

Lynn Janson, a co-founder and CEO of the treatment center Milestone Recovery, described to lawmakers this year how a suspension had threatened the business she and her husband opened in 2021 with help from their daughter, a licensed clinician. Janson’s son had struggled with a methamphetamine addiction, she said, and it had been difficult to find a treatment program that would help him address childhood trauma that fueled his drug use. She opened the business to fill that void for others.

“My husband and I decided to move forward by creating a space focused on treating the trauma that is the root cause” of addiction, she said. “Fraud was never a motivating factor for us to enter this field.”

This spring, the state lifted Milestone’s suspension.

Twenty providers, not including Milestone, have filed notices of claim — precursors to lawsuits — against AHCCCS and state officials for wrongful suspension or termination. Four families have sued the Medicaid agency since April over the deaths of their loved ones while they were in the care of treatment centers. The state has denied culpability, saying state agencies, including AHCCCS, responded appropriately to past concerns about patient safety based on the information they had. AHCCCS declined to comment about the lawsuits.

Rainy plays on the trampoline at her family home. “It’s Like She’s Never Even Been to Counseling”

In April, James paused Rainy’s therapy altogether. She could no longer afford to provide counseling without reimbursement.

When AHCCCS learned that James was no longer providing care to Rainy, the agency sent a message reminding her that agency policy prohibits providers from turning away patients based on their enrollment in the American Indian Health Program. James replied, saying that she and her staff wanted to accept new patient referrals but couldn’t without payment. She never heard back.

To stay in business, James began accepting patients insured by plans other than the American Indian Health Program. Claims were promptly reviewed and reimbursed, James said, including by other Medicaid plans. Only AHCCCS’ American Indian Health Program has not reimbursed her claims.

The transition to working with patients outside of the Gila River community was bittersweet, James said, especially knowing that many of her former patients like Rainy were still searching for reliable treatment. “When I hear about the constant need that is still going on out there, it’s just really frustrating,” she said.

Enas said it has been painful to watch Rainy’s grief and trauma resurface over the past 10 months. She has tried her best to help Rainy process her emotions but said she isn’t equipped to address her daughter’s behavioral health challenges on her own.

“It’s like she’s never even been to counseling,” she said.

Rainy’s night terrors returned, with recurring dreams of her adoptive father dying. She continued to excel at school, but her teachers noticed worsening mood swings. On a visit to her adoptive father’s grave to bring him offerings of flowers and home-cooked food, Rainy lay by his headstone for hours, until dark. Unwilling to leave, Rainy cried and asked Enas how she could die so she could be with him again.

Rainy places solar lamps on the grave of her adoptive father on the Gila River Indian Community.

Enas tried everything she could think of to find care for her daughter. She contacted lawmakers, AHCCCS officials, health care administrators, school caseworkers and providers.

At one point, a patient advocate with the Gila River hospital in Sacaton, on the reservation, encouraged Enas to disenroll Rainy from the American Indian Health Program. The idea was that by switching to insurance provided by managed care organizations, Enas and Rainy would avoid issues related to AHCCCS’ handling of the insurance plan.

But changing her daughter’s insurance would be tedious and have broader repercussions. Enas would have to find a new allergist and primary care doctor because those providers, based on the reservation, accept only the American Indian Health Program. Switching back and forth also was not feasible when a single afternoon could involve juggling appointments or calls with multiple health care providers.

“We shouldn’t have to switch our plans so that way our kids can get the service that they need. That’s not right,” she said.

Enas and Rainy’s search has led back to where it began: Desert Rain. Recent income from privately insured patients has given James enough cushion to resume providing some services for free. In mid-August, Rainy returned for grief counseling sessions with James. Rainy’s other mental health disorders remain largely untreated.

Desert Rain is the best place for Rainy, Enas said, but she doesn’t know how long the treatment will last.

“Alexis is going to carry her for a little bit, and then she’s going to have to drop her again, because she’s not getting paid,” said Enas.

“How can AHCCCS do this to these kids, do this to my child?”

This post was originally published on ProPublica.

This article was published in partnership with The Marshall Project, a nonprofit news organization covering the US criminal justice system, Mother Jones and USA Today. Sign up for The Marshall Project’s newsletters, and follow them on Instagram, TikTok, Reddit and Facebook.

Susan Horton had been a stay-at-home mom for almost 20 years, and now—pregnant with her fifth child—she felt a hard-won confidence in herself as a mother.

Then she ate a salad from Costco. 

It was her final meal before going to Kaiser Permanente hospital in Santa Rosa, in Northern California, to give birth in August 2022. It had been an exhausting pregnancy. Her family had just moved houses, and Horton was still breastfeeding her toddler. Because of her teenage son’s heart condition, she remained wary of Covid-19 and avoided crowded places, even doctor’s offices. Now, already experiencing the clawing pangs of contractions, she pulled out a frozen pizza and a salad with creamy everything dressing, savoring the hush that fell over the house, the satisfying crunch of the poppy seeds as she ate. 

Horton didn’t realize that she would be drug tested before her child’s birth. Or that the poppy seeds in her salad could trigger a positive result on a urine drug screen, the quick test that hospitals often use to check pregnant patients for illicit drugs. Many common foods and medications—from antacids to blood pressure and cold medicines—can prompt erroneous results.

The morning after Horton delivered her daughter, a nurse told her she had tested positive for opiates. Horton was shocked. She hadn’t requested an epidural or any narcotic pain medication during labor—she didn’t even like taking Advil. “You’re sure it was mine?” she asked the nurse.

If Horton had been tested under different circumstances—for example, if she was a government employee and required to be tested as part of her job—she would have been entitled to a more advanced test and to a review from a specially trained doctor to confirm the initial result. 

But as a mother giving birth, Horton had no such protections. The hospital quickly reported her to child welfare, and the next day, a social worker arrived to take baby Halle into protective custody.  

Kaiser Permanente declined to comment on Horton’s care. In a statement, it said the Santa Rosa hospital typically gets consent to drug-test patients for medical reasons, and as a mandated reporter under state law, it refers potential exposures of newborns to illicit drugs to child welfare authorities. 

The Sonoma County Human Services Department said, in a statement, that it evaluates all referrals using “evidence- and research-based” methods, and if a report is deemed valid, it has a duty under state law to investigate.

Horton said the experience made her feel powerless and terrified.

“They had a singular piece of evidence that I had taken something,” she said, “and it was wrong.” 

For decades, state and federal laws have required hospitals across the country to identify newborns affected by drugs in the womb and to refer such cases to child protective services for possible investigation. To comply, hospitals often use urine drug screens that are inexpensive (as little as $10 per test), simple to administer (the patient pees in a cup), and provide results within minutes. 

But urine drug screens are easily misinterpreted and often wrong, with false positive rates as high as 50 percent, according to some studies. Without confirmation testing and additional review, false positive results can lead hospitals to wrongly accuse parents of illicit drug use and report babies to child welfare agencies—which may separate newborns from their families, an investigation by The Marshall Project and Reveal has found.

It’s unclear how many of the nation’s 3.6 million births every year involve drug testing, but health care experts said urine screening is ubiquitous. Tens of thousands of infants are reported annually to authorities for in utero drug exposure, with no guarantee that the underlying tests are accurate, our analysis of federal data shows.

To report this story, The Marshall Project interviewed dozens of patients, medical providers, toxicologists and other experts, and collected information on more than 50 mothers in 22 states who faced reports and investigations over positive drug tests that were likely wrong. We also pored over thousands of pages of policy documents from every state child welfare agency in the country. 

Problems with drug screens are well known, especially in workplace testing. But there’s been little investigation of how easily false positives can occur inside labor and delivery units, and how quickly families can get trapped inside a system of surveillance and punishment.

Hospitals reported women for positive drug tests after they ate everything bagels and lemon poppy seed muffins, or used medications including the acid reducer Zantac, the antidepressant Zoloft, and labetalol, one of the most commonly prescribed blood pressure treatments for pregnant women. 

After a California mother had a false positive for meth and PCP, authorities took her newborn, then dispatched two sheriff’s deputies to also remove her toddler from her custody, court records show. In New York, hospital administrators refused to retract a child welfare report based on a false positive result, and instead offered the mother counseling for her trauma, according to a recording of the conversation. And when a Pennsylvania woman tested positive for opioids after eating pasta salad, the hearing officer in her case yelled at her to “buck up, get a backbone, and stop crying,” court records show. It took three months to get her newborn back from foster care. 

Federal officials have known for decades that urine screens are not reliable. Poppy seeds—which come from the same plant used to make heroin—are so notorious for causing positives for opiates that last year the Department of Defense directed service members to stop eating them. At hospitals, test results often come with warnings about false positives and direct clinicians to confirm the findings with more definitive tests. 

Yet state policies and many hospitals tend to treat drug screens as unassailable evidence of illicit use, The Marshall Project found. Hospitals across the country routinely report cases to authorities without ordering confirmation tests or waiting to receive the results. 

At least 27 states explicitly require hospitals to alert child welfare agencies after a positive screen or potential exposure, according to a review of state laws and policies by The Marshall Project. But not a single state requires hospitals to confirm test results before reporting them. At least 25 states do not require child welfare workers to confirm positive test results, either. 

While parents often lack protections, most of the caseworkers who investigate them are entitled to confirmation testing and a review if they test positive for drugs on the job, our analysis found. 

Health care providers say there are medical reasons to test labor and delivery patients for drugs, including alerting doctors to watch a newborn for withdrawal symptoms. They also cite concerns about criminal and legal liability if they fail to report positive test results. 

Even when a doctor refutes a positive result and vouches for their patient, hospitals may report the incorrect data anyway to child welfare agencies.

“It’s almost like a gut punch. You come to the hospital and you see a social work note on your patient’s chart,” said Dr. Yashica Robinson, an OB/GYN in Huntsville, Alabama, who has tried and failed several times to halt child welfare reports and investigations of patients with false positive results. “Once that ball is rolling, it’s hard to stop it,” Robinson said.

No government agency collects comprehensive data on false positive results or on how many pregnant patients are tested. And confidentiality laws that shield medical and child welfare records make it difficult for the public to understand how many families are affected. 

In 2016, Congress mandated states to submit the number of “substance-affected” infants to the US Department of Health and Human Services. Not all states track every case, but from fiscal years 2018 through 2022, medical professionals reported at least 170,000 infants to child welfare agencies for exposure to substances, according to an analysis by The Marshall Project. In 2022 alone, more than 35,000 such cases were reported, and authorities removed more than 6,000 infants from their families, our analysis found. 

The harms of drug testing fall disproportionately on low-income, Black, Hispanic, and Native American women, who studies have found are more likely to be tested when they give birth, more likely to be investigated, and less likely to reunite with their children after they’ve been removed. 

But the false positive cases The Marshall Project identified include parents of all socioeconomic classes and occupations—from a lawyer to a school librarian to a nurse who drug tests other people for a living. 

“People should be concerned,” said Dr. Stephen Patrick, a leading neonatal researcher who chairs the Department of Health Policy and Management at the Rollins School of Public Health in Atlanta. “This could happen to any one of us.”

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Drug screens are more guesswork than exact science. Chemicals in the tests quickly cross-react with urine, flagging anything that looks like it could be an illicit substance. The tests are like fishing nets that are cast wide and pick up anything and everything that fits, said Dr. Gwen McMillin, a professor at the University of Utah School of Medicine and medical director of a drug-testing lab. The problem is that nets also ensnare fish that aren’t being targeted: compounds that are closely related to illicit substances or merely look similar. 

“Drug testing results need to be confirmed before they go to CPS,” McMillin said. “Actions should not be taken based on a single drug testing result. Period.” 

But sometimes, even confirmation tests can be misinterpreted, as Susan Horton found.

At first, Horton was puzzled by her positive test result. She wondered if her urine might have been mixed up with another patient’s. Then—“ding ding ding!”—her last meal popped into her head. She told a nurse about the poppy seeds in her salad, sure that this would resolve her doctors’ concerns. 

Horton’s records show Kaiser ran her urine sample through a second test, and this time it came back positive for one opiate in particular: codeine. That shouldn’t have been surprising—poppy seeds, like the ones in Horton’s salad, are derived from the opium poppy plant and contain codeine. 

To differentiate between salad dressing or bagels and illicit drugs, toxicologists have long recommended testing urine for the presence of a compound called thebaine, which is found in poppy seeds, but not in heroin. There’s no indication that the hospital performed or even knew about the thebaine test, leaving providers with no way to prove or disprove Horton’s claims.

“Mom and dad insistent that a Costco salad with poppyseed dressing is responsible,” a doctor wrote in her notes. Another doctor wrote: “We are unable to verify whether this could result in a positive test.”

Soon, multiple doctors and nurses filed into Horton’s room. They said hospital policy dictated that Halle remain there for five days to be monitored for possible drug withdrawal symptoms—“for baby’s safety,” a doctor told Horton.

Unlike most other states that require hospitals to report positive drug tests, California law says a positive test alone “is not in and of itself a sufficient basis for reporting child abuse or neglect.” But because of Covid-19 and her son’s heart condition, Horton had also missed some prenatal appointments, which many providers see as a red flag for drug use. A hospital social worker noted the missed appointments and decided to file a report.

In a statement about its practices in general, Kaiser said it always conducts a “multi-faceted assessment” prior to filing a report to CPS, which is responsible for reviewing the information and investigating. 

Horton insisted that keeping her baby at the hospital was unnecessary. “I’m not a drug addict,” she said she pleaded. Desperate for help, her husband called the police, who declined to oppose hospital directives, records show. 

When the caseworker arrived, the couple refused to sign a safety plan or allow the person to interview their children and inspect their home. So the caseworker immediately obtained a judge’s order and placed baby Halle into temporary custody in the hospital, before discharging her to her grandparents, who were ordered to supervise Horton with her child. 

A few days later, Horton stood silently in court, dressed in pants that clung uncomfortably to her still-healing body, feeling as if her motherhood was on trial. A caseworker told the judge it would be dangerous to release Halle to her parents, and Horton agreed to another drug test. A worker followed her to the bathroom and watched her urinate in a cup.

By then, caseworkers and doctors had privately acknowledged that poppy seeds could have caused Horton’s positive test result. But in court the caseworker didn’t mention that. Instead, she argued that Horton’s purported drug use had “caused serious physical harm” to her child. 

The agency said under state law it can’t comment on individual cases. Speaking generally, it said a single positive drug test, false or otherwise, doesn’t warrant an investigation, and that there needs to be “a reported observation of impact to the child.”

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When workplace drug testing was introduced in the 1980s, unions and civil rights groups decried the error rates of drug screens and how companies were firing workers over false positive results. In response, federal authorities mandated safeguards for employees, including requiring confirmation tests and a review from a specially trained doctor to determine whether a food or medication could have caused a positive result. 

A federal medical advisory committee in 1993 urged health care providers who drug test pregnant patients to adopt the same rigorous standards. But amid the “crack baby” panic, the idea of protecting mothers did not catch on. 

Hospital drug testing policies vary widely. Many facilities, such as Kaiser in Santa Rosa, test every single labor-and-delivery patient. Other hospitals flag only certain people, such as those with limited prenatal care, high blood pressure, even bad teeth, experts say. At many hospitals, the decision is up to doctors and nurses, who may view a mother’s tattoos, disheveled clothing, or stressed demeanor with suspicion. Studies have found that the decision to test is rife with class and race bias.

“Those who look like they have less resources, people might say, ‘Well, they look more likely to use drugs,’” said Dr. Cresta Jones, an associate professor and maternal-fetal medicine specialist at the University of Minnesota Medical School.

Hospitals often have full discretion over whether or not to screen for drugs, but once a positive result is in hand, the decision to report becomes more complicated. Laws and policies in at least 12 states explicitly require hospitals to send screen results to child welfare agencies, even if they are not confirmed, according to The Marshall Project’s review. 

For hospitals, cost is also an issue. While urine screens are cheap, the equipment needed to run a confirmation test costs hundreds of thousands of dollars, in addition to the cost of expert personnel and lab certification. Some hospitals contract out confirmation testing—a lower-cost alternative—but getting results can take days, long after many families are ready to go home.

Doctors, nurses and hospital social workers face an uncomfortable predicament: Do they send the baby home to what they believe could be an unsafe environment, or do they call authorities?

“God forbid the baby goes home, withdraws and dies, we’re going to be held liable for that,” said Dr. Adi Davidov, an obstetrician at Staten Island University Hospital, which drug tests every birthing patient.

State mandatory reporting laws add to the pressure on doctors and nurses. These laws impose criminal liability on providers who fail to report, while also protecting physicians who report “in good faith”—insulating hospitals from lawsuits if test results are wrong. 

Even when doctors have the ability to order a confirmation test, they don’t always do so. Many misinterpret positive screens as definitive evidence of drug use.

When Grace Smith had her fourth child in 2021 at St. Luke’s University Hospital, an hour north of Philadelphia, she was taking prescribed marijuana and Vyvanse, a medication for attention deficit hyperactivity disorder. The medicine contains amphetamine, but the hospital’s drug screen results did not differentiate between meth and amphetamine, according to medical records. The day  after Smith delivered her son, a doctor told her that she and her baby had tested positive for meth and that the hospital had notified child protective services.

Smith’s husband Michael asked the doctor to review his wife’s medical records to confirm her prescription, according to the doctor’s notes. The doctor argued that wasn’t her role. “I explained that our responsibility as healthcare workers was to report the case” to child welfare authorities, she wrote, adding that the agency “would conduct any investigation that was necessary.”

When Michael Smith told the doctor they were leaving with their baby, the hospital called the police. An officer escorted the parents out, without their newborn, a police report shows. The Smiths said the police told them they would be arrested if they returned.

St. Luke’s University Health Network declined to answer questions from The Marshall Project, saying in an email that the hospital “complies with all rules and regulations regarding drug testing and reporting” and that the newborn’s welfare “is always our primary concern.”

Four days after the Smiths’ son was born, Monroe County Children and Youth Services told the hospital it was OK to release the baby to his parents. But the investigation remained open. It wasn’t until the Smiths paid more than $3,500 for a lawyer—and nearly $300 for a confirmation drug test that came back negative—that the agency closed their case. The agency declined to comment.

The Smiths filed a lawsuit in 2022 against St. Luke’s. In its response, the hospital acknowledged that it had not given Grace a confirmation test, but denied violating the Smiths’ privacy or civil rights. A judge dismissed the suit in 2023, saying in part that the Smiths did not sufficiently argue their claims.

Many providers erroneously assume that child welfare agencies verify a parent’s drug use. But government caseworkers typically lack the expertise to accurately interpret drug test results. State policy manuals seldom mention the possibility of false positives. It often falls on parents to prove their own innocence.

As a nurse in South Carolina, Ashley Riley said she regularly drug-tested patients in an addiction treatment program, flagged faulty tests, and sent out positive screens for confirmation. But when she herself screened positive for opiates after delivering her son in 2023, Riley said the hospital declined to order a confirmation test, then reported her to authorities.

Riley and her husband, Jeffrey, insisted the positive result was from lemon poppy seed muffins that she had eaten throughout her pregnancy. As proof, Jeffrey Riley texted the investigator a receipt for the muffins, studies on false positives caused by poppy seeds, and the 2023 memo from the Department of Defense urging service members to avoid poppy seeds.

“At no point in time was there anybody in there that was even trying to advocate for my wife, except for me,” he recalled.

At first, he thought his efforts were working. The caseworker acknowledged in his notes having seen the poppy seeds and noted that the report “could be falsified.” 

But the caseworker still insisted the couple sign a safety plan, advising them that their two children would be placed in foster care unless they assigned a “protector”—a responsible adult who would supervise them with their children at all times. This continued for 45 days before the case was closed as unfounded. 

“We were guilty until proven innocent,” Ashley Riley said. 

The hospital even charged $424 for the problematic urine test. Hospital officials did not respond to multiple interview requests.

Will Batchelor, a spokesperson for the South Carolina Department of Social Services, wrote in a statement that the agency has a duty to investigate once a hospital has filed a report, and that it “exercised appropriate restraint” by not removing the child from the home.

“Because the safety of a child is at stake, DSS has to continue its investigation beyond seeing a receipt for poppy seed muffins,” Batchelor wrote.

Even when a parent has a confirmation test and her own doctor’s word attesting to a false positive result, authorities may keep investigating.

When Melissa Robinson, an elementary school librarian in Huntsville, Alabama, screened pos​​itive for cocaine in early 2024, the news shocked her and her doctors. Robinson had avoided anything during her pregnancy that could be risky, even cold cuts—which may carry bacteria—and had no history of drug use. Because of the positive test, staff told Robinson she was not allowed to breastfeed her daughter, hospital records show, and they reported her to Alabama’s child welfare agency, the Department of Human Resources. Robinson said a caseworker told her that she probably wouldn’t be allowed to be alone with her baby—her husband would have to supervise.

A few days later, a confirmation test came back negative for any substances. With proof that she had not used cocaine, Robinson assumed the case would be closed. Instead, the agency continued to investigate, inspecting her home and even requiring her husband to take a drug test, she said.

Alabama’s child welfare agency said they are required to respond immediately to a hospital report and “make safety decisions relying on current and most accessible information.”

When the baby was two weeks old, the agency closed the case, citing insufficient evidence. But the allegations will remain on Robinson’s record for at least five years.

“To have such a beautiful experience tainted by something like that, it’s difficult,” Robinson recalled. “Truthfully, it’s turned me into somebody different.” 

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Some medical groups and providers have taken steps to reduce unnecessary child welfare reports. The American College of Obstetricians and Gynecologists advises hospitals to use a screening questionnaire rather than drug tests to identify people who may have substance abuse problems. The organization also recommends that hospitals obtain consent from patients, explaining the potential consequences of a positive result—including if the hospital is required to report it to authorities. A number of large hospitals have adopted some version of those recommendations. 

After a study at Staten Island University Hospital in New York found a high rate of false positives, administrators brought the confirmation testing in-house. They said results come back within a day or two, rather than the week that is typical for outside tests, which allows providers to wait before contacting child welfare.

“Any time you act on a test that’s not 100 percent, you run the risk of causing more harm than good,” said the hospital’s Dr. Davidov. “If you are going to get CPS involved with a mother who did nothing wrong, is a good citizen, that’s harming her. It’s harming her experience, it’s harming her ability to take care of her newborn.”

In recent years, advocacy groups have filed lawsuits against hospitals for testing without explicit consent, which has led some state officials and lawmakers to speak out against the testing. But in most of the US, it remains common practice to report families based on unconfirmed positive screens. Most of the women interviewed by The Marshall Project signed general consent forms at the hospital, but said they were never informed explicitly they would be drug tested, nor that a positive result could be reported to authorities.

For Susan Horton, her family’s ordeal has created an undercurrent of fear that courses through her daily life. 

After the court hearing in August 2022, child welfare workers took the baby to Horton’s elderly in-laws and barred Horton and her husband from being alone with their newborn while the agency investigated. Finally, almost two weeks after their daughter was born, the agency withdrew its petition and a judge dismissed the case, allowing the Hortons to bring baby Halle home.

One afternoon last spring, Horton took her daughter, now a toddler, outside. Halle giggled as her mother chased her around the front yard, her little feet splashing in a small mud hole. This was the life Horton had envisioned years ago—a quiet place in the California countryside where her children could delight in the world around them. And yet, Horton couldn’t help but remember the investigation that destroyed her family’s peace of mind—and her self-esteem.

“I had a lot of confidence in how I mother and how I parent,” she said, adding later: “Now in my head, I’m always questioning my choices.” She wondered aloud what neighbors would say if they saw her daughter playing in the mud, if someone might accuse her of being a bad parent.

“I just always have that looming feeling that at any moment CPS could come knocking and take my children away.” 

The Marshall Project reporters Weihua Li, Andrew Rodriguez Calderón, Nakylah Carter and Catherine Odom contributed to this story. 

She Ate a Poppy Seed Salad Just Before Giving Birth. Then They Took Her Baby Away. is a story from Reveal. Reveal is a registered trademark of The Center for Investigative Reporting and is a 501(c)(3) tax exempt organization.

This post was originally published on Reveal.

by Annie Waldman, Maya Miller, Duaa Eldeib and Max Blau, photography by Tony Luong, special to ProPublica, design by Zisiga Mukulu

America is in the midst of a mental health crisis. 

But finding a therapist who takes insurance can feel impossible.

Insurers say that’s because there aren’t enough therapists. 

That’s not entirely true.

Carter J. Carter became a therapist to help young people struggling with their mental health.

Rosanne Marmor wanted to support survivors of trauma.

Kendra F. Dunlap aspired to serve people of color. 

They studied, honed their skills and opened practices, joining health insurance networks that put them within reach of people who couldn’t afford to pay for sessions out of pocket. 

So did more than 500 other psychologists, psychiatrists and therapists who shared their experiences with ProPublica.

But one after another, they confronted a system set up to squeeze them out.

This post was originally published on ProPublica.

by Cassandra Jaramillo, Jeremy Kohler and Sophie Chou, ProPublica, and Jessica Kegu, CBS News

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published. This story was reported in partnership with CBS News.

Year after year, while Roe v. Wade was the law of the land, Texas legislators passed measures limiting access to abortion — who could have one, how and where. And with the same cadence, they added millions of dollars to a program designed to discourage people from terminating pregnancies.

Their budget infusions for the Alternatives to Abortion program grew with almost every legislative session — first gradually, then dramatically — from $5 million starting in 2005 to $140 million after the U.S. Supreme Court overturned the right to an abortion.

Now that abortion is largely illegal in Texas, lawmakers say they have shifted the purpose of the program, and its millions of dollars, to supporting families affected by the state’s ban.

In the words of Rep. Jeff Leach, a Republican from Plano, the goal is to “provide the full support and resources of the state government … to come alongside of these thousands of women and their families who might find themselves with unexpected, unplanned pregnancies.”

But an investigation by ProPublica and CBS News found that the system that funnels a growing pot of state money to anti-abortion nonprofits has few safeguards and is riddled with waste.

Officials with the Health and Human Services Commission, which oversees the program, don’t know the specifics of how tens of millions of taxpayer dollars are being spent or whether that money is addressing families’ needs.

In some cases, taxpayers are paying these groups to distribute goods they obtained for free, allowing anti-abortion centers — which are often called “crisis pregnancy centers” and may be set up to look like clinics that perform abortions — to bill $14 to hand out a couple of donated diapers.

Distributing a single pamphlet can net the same $14 fee. The state has paid the charities millions to distribute such “educational materials” about topics including parenting and adoption; it can’t say exactly how many millions because it doesn’t collect data on the goods it’s paying for. State officials declined to provide examples of the materials by publication time, and reporters who visited pregnancy centers were turned away.

Funding for Texas’ Anti-Abortion Program Has Skyrocketed

As they restricted access to abortion, lawmakers also poured money into a program that was first called Alternatives to Abortion and recently rebranded as Thriving Texas Families. The program funds counseling, baby items and brochures, but not medical care.

Note: Data represents the amounts budgeted for Alternatives to Abortion, now called Thriving Texas Families, for each two-year budget period, including amendments made in that period. Sources: Alternatives to Abortion annual reports and the 2024-25 Texas budget bill (Lucas Waldron/ProPublica)

For years, Texas officials have failed to ensure spending is proper or productive.

They didn’t conduct an audit of the program in the wake of revelations in 2021 that a subcontractor had used taxpayer funds to operate a smoke shop and to buy land for hemp production.

They ramped up funding to the program in 2022 even after some contractors failed to meet their few targets for success.

After a legislative mandate passed in 2023, lawmakers ordered the commission to set up a system to measure the performance and impact of the program.

One year later, Health and Human Services says it’s “working to implement the provisions of the law.” Agency spokespeople answered some questions but declined interview requests. They said their main contractor, Texas Pregnancy Care Network, was responsible for most program oversight.

The nonprofit network receives the most funding of the program’s four contractors and oversees dozens of crisis pregnancy centers, faith-based groups and other charities that serve as subcontractors.

The network’s executive director, Nicole Neeley, said those subcontractors have broad freedom over how they spend revenue from the state. For example, they can save it or use it for building renovations.

Pregnancy Center of the Coastal Bend in Corpus Christi, for instance, built up a $1.6 million surplus from 2020 to 2022. Executive Director Jana Pinson said two years ago that she plans to use state funds to build a new facility. She did not respond to requests for comment. A ProPublica reporter visited the waterfront plot where that facility was planned and found an empty lot.

Because subcontractors are paid set fees for their services, Neeley said, “what they do with the dollars in their bank accounts is not connected” to the Thriving Texas Families program. “It is no longer taxpayer money.”

The state said those funds are, in fact, taxpayer money. “HHSC takes stewardship of taxpayer dollars, appropriated by the Legislature, very seriously by ensuring they are used for their intended purpose,” a spokesperson said.

None of that has caused lawmakers to stop the cash from flowing. In fact, last year they blocked requirements to ensure certain services were evidence-based.

Leach, one of the program’s most ardent supporters, said in an interview with ProPublica and CBS News that he would seek accountability “if taxpayer dollars aren’t being spent appropriately.” But he remained confident about the program, saying the state would keep investing in it. In fact, he said, “We’re going to double down.”

What’s more, lawmakers around the country are considering programs modeled on Alternatives to Abortion.

Last year, Tennessee lawmakers directed $20 million to fund crisis pregnancy centers and similar nonprofits. And Florida enacted a 6-week abortion ban while including in the same bill a $25 million allocation to support crisis pregnancy centers. John McNamara, a longtime leader of Texas Pregnancy Care Network, has been working to start similar networks in Kansas, Oklahoma and Iowa. He’s also reserved the name Louisiana Pregnancy Care Network.

And U.S. House Republicans are advocating for allowing federal dollars from the Temporary Assistance for Needy Families program — intended to help low-income families — to flow to pregnancy centers. In January, the House passed the legislation, and it is pending in the Senate. Rep. Elise Stefanik, R-N.Y., castigated Democrats for voting against the bill.

“That’s taking away diapers, that’s taking away resources from families who are in need,” she said in an interview with CBS News after the vote.

But, as Texas shows, more funding doesn’t necessarily pay for more diapers, formula or other support for families.

Lawmakers rebranded Alternatives to Abortion as Thriving Texas Families in 2023. The program is supposed to promote pregnancies, encourage family formation and increase economic self-sufficiency.

The state pays four contractors to run the program. The largest, which gets about 80% of the state funding, is the anti-abortion group Texas Pregnancy Care Network.

Human Coalition, which gets about 16% of the state funding, said it uses the money to provide clients with material goods, counseling, referrals to government assistance and education. Austin LifeCare, which gets about 3% of the state funding, could not be reached for comment about this story. Longview Wellness Center in East Texas, which receives less than 1% of the funds, said the state routinely audits its expenses to ensure it’s operating within guidelines.

Texas Pregnancy Care Network manages dozens of subcontractors that provide counseling and parenting classes and that distribute material aid such as diapers and formula. Parents must take a class or undergo counseling before they can get those goods.

The state can be charged $14 each time one of these subcontractors distributes items from one of several categories, including food, clothing and educational materials. That means the distribution of a couple of educational pamphlets could net the same $14 fee as a much pricier pack of diapers.

A single visit by a client to a subcontractor can result in multiple charges stacking up. Centers are eligible to collect the fees regardless of how many items are distributed or how much they are worth. One April morning, a client at McAllen Pregnancy Center, near the Texas-Mexico border, received a bag with some diapers, a baby outfit, a baby blanket, a pack of wipes, a baby brush, a snack and two pamphlets. It was not clear how much the center invoiced for these items.

McAllen Pregnancy Center and other Texas Pregnancy Care Network subcontractors were paid more than $54 million from 2021 to 2023 for distributing these items, according to records.

How much of that was for handing out pamphlets? The state said it didn’t know; it doesn’t collect data on the quantities or types of items provided to clients or whether they are essential items like diapers or just pamphlets, making it impossible for the public to know how tax dollars were spent.

Neeley said in an email that educational materials like pamphlets only accounted for 12% of the money reimbursed in this category last year, or roughly $2.4 million out of $20 million. She did not respond to questions from ProPublica and CBS News about evidence that would corroborate that number.

The way subcontractors are paid, and what they’re allowed to do with that money, raised questions among charity experts consulted for this investigation.

In the nonprofit sector, using a fee-for-service payment model for material assistance is highly unusual, said Vincent Francisco, a professor at the University of Kansas who has worked as a nonprofit administrator, evaluator and consultant over the past three decades. It “can run fast and loose if you’re not careful,” he said.

Even if nonprofits distribute items they got for free or close to it, the state will still reimburse them. Take Viola’s House, a pregnancy center and maternity home in Dallas. Records show that it pays a nearby diaper bank an administrative fee of $1,590 for about 120,000 diapers annually — just over a penny apiece. Viola’s House can then bill the state $14 for distributing a pack of diapers that cost the center just over a quarter.

But before they can get those diapers, parents must take a class. The center can also bill the state $30 for each hour of class a client attends.

Rep. Donna Howard, a Democrat from Austin, said the program could be more efficient if the state funded the diaper banks directly. Last year, she proposed diverting 2% of Thriving Texas Families’ funding directly to diaper banks, but the proposal failed.

Records show that in fiscal year 2023, Viola’s House received more than $1 million from the state in reimbursements for material support and educational items plus another $1.7 million for classes. Executive Director Thana Hickman-Simmons said Viola’s House relies on funding from an array of sources and that just a small fraction of the diapers it distributes come from the diaper bank. She said the state money “could never cover everything that we do.”

In some cases, reimbursements have created a hefty cushion in the budgets of subcontractors. The state doesn’t require them to spend the taxpayer funds they get on needy families, and Texas Pregnancy Care Network said subcontractors can spend the money as they see fit, as long as they follow Internal Revenue Service rules for nonprofits.

McAllen Pregnancy Center received $3.5 million in taxpayer money from Texas Pregnancy Care Network over three years, but it spent less than $1 million on program services, according to annual returns it filed with the IRS. Meanwhile, $2.1 million was added to the group’s assets, mostly in cash. Its executive director, Angie Arviso, asked a reporter who visited in person to submit questions in writing, but she never responded.

Texas Taxpayers Gave One Crisis Pregnancy Center $3.5 Million Over Three Years. It Spent Less Than $1 Million on Programs.

The nonprofit McAllen Pregnancy Center is a case study showing how anti-abortion centers can amass a surplus from the Alternatives to Abortion program, which is now called Thriving Texas Families

Note: Figures are rounded to the nearest thousand. Sources: McAllen Pregnancy Center Form 990 for 2020, 2021 and 2022, and Texas Health and Human Services Commission records obtained by ProPublica and CBS News. (Lucas Waldron/ProPublica)

“This is a policy choice Texas has made,” said Samuel Brunson, associate dean for faculty research and development at the Loyola University Chicago School of Law, who researches and writes about the federal income tax and nonprofit organizations. “It has chosen to redistribute money from taxpayers to the reserve funds of private nonprofit organizations.”

Tax experts say that’s problematic. “Why would you give money to a recipient that is not spending it?” said Ge Bai, a professor of accounting and health policy at Johns Hopkins University.

The tax experts disagree with Texas Pregnancy Care Network’s argument that the money is no longer taxpayer dollars after its subcontractors are paid.

“It’s still the government buying something,” said Jason Coupet, associate professor of public management and policy at Georgia State University, who has studied efficiency in the public and nonprofit sectors. “If I were in the auditor’s office, that’s where I would start having questions.”

State legislators and regulators haven’t installed oversight protections in the program.

Three years ago, The Texas Tribune spotlighted the state’s refusal to track outcomes or seek insight into how subcontractors have spent taxpayer money.

Months later, Texas Pregnancy Care Network cut off funding to one of its biggest subcontractors after a San Antonio news outlet alleged the nonprofit had misspent money from the state.

KSAT-TV reported that the nonprofit, A New Life for a New Generation, had used Alternatives to Abortion funds for vacations and a motorcycle, and to fund a smoke shop business owned by the center’s president and CEO, Marquica Reed. It also spent $25,000 on land that was later registered by a member of Reed’s family to produce industrial hemp.

In an interview with ProPublica, a former case manager recalled how Reed would get angry if employees forgot to bill the state for a service provided to a client.

The former case manager, Bridgett Warren Campbell, said employees would buy diapers from the local Sam’s Club store, then take apart the packages. “We’d take the diapers out and give parents two to three diapers at a time, then she would bill TPCN,” said Campbell.

Reed declined to comment to a ProPublica reporter or to answer follow-up questions via email or text. Neeley, the Texas Pregnancy Care Network’s executive director, said the pregnancy center was removed from the program because its nonprofit status was in jeopardy, not because it had used money on personal spending. She said the network wasn’t responsible for monitoring how A New Life for a New Generation spent its dollars: “The power to investigate these matters of how nonprofits manage their own funds is reserved statutorily to the Texas Attorney General and the IRS.”

The Texas attorney general’s office would not say whether it has investigated the organization. Records show that after KSAT’s story, state officials referred the case to an inspector general and that the Texas Pregnancy Care Network submitted a report detailing how it monitored the subcontractor.

The state requires contractors to submit independent financial audits if they receive at least $750,000 in state money; Texas Pregnancy Care Network meets this threshold. However, its dozens of subcontractors don’t have to submit these audits — something experts in nonprofit practices said should be required. In the fiscal year before the alleged misspending came to light, A New Life for a New Generation received more than $1 million in reimbursements from the state, records show.

When ProPublica and CBS News asked how the Health and Human Services Commission detects fraud or misuse of taxpayer funds, Jennifer Ruffcorn, a commission spokesperson, said the agency “performs oversight through various methods, which may include fiscal, programmatic, and administrative monitoring, enhanced monitoring, desk reviews, financial reconciliations, on-site visits, and training and technical assistance.”

Through a spokesperson, Rob Ries, the deputy executive commissioner who oversees the program at Health and Human Services, declined to be interviewed.

The agency has never thoroughly evaluated the effectiveness of the program’s services in its nearly 20 years of existence.

It is supposed to make sure its contractors are meeting a few benchmarks: how many clients each one serves and how many they have referred to Medicaid and the Nurse-Family Partnership, a program that sends nurses to the homes of low-income first-time mothers and has been proven to reduce maternal deaths. The Nurse-Family Partnership does not receive Alternatives to Abortion funding.

In 2022, the Texas Pregnancy Care Network failed to meet two of three key benchmarks in its contract with the state: It didn’t serve enough clients and it didn’t refer enough of them to the nursing program. The state didn’t withhold or reduce its funding. McNamara disputed the first claim, saying the state changed its methodology for counting clients, and said the other benchmark was difficult to hit because too few clients qualified for the nursing program.

In May 2023, when lawmakers passed the bill rebranding the program, the state also ordered the agency to “identify indicators to measure the performance outcomes,” “require periodic reporting” and hire an outside party to conduct impact evaluations.

The agency declined to share details about its progress on those requirements except to say that it is soliciting for impact evaluation services. Records show the agency has requested bids.

Lawmakers decided last year against enacting requirements that would ensure certain services were evidence-based — proven by research to meet their goals — instead siding with an argument that they would be too onerous for smaller nonprofits.

Texas’ six-week abortion ban took effect in 2021, and more than 16,000 additional babies were born in the state the following year. Academics expect that trend to continue.

But the safety net for parents and babies is paper thin.

Texas has the lowest rate of insured women of reproductive age in the country and ranks above the national average for maternal deaths. It’s last in giving cash assistance to families living beneath the poverty line.

Mothers told reporters they are struggling to scrape together enough diapers and wipes to keep their babies clean. A San Antonio diaper bank has hundreds of families on its waitlist. Outside an Austin food pantry, lines snake around the block.

Howard, the Austin state representative, said ProPublica and CBS News’ findings show that the program needs more oversight. “It is unconscionable that a [Thriving Texas Families] provider would be allowed to keep millions in reserve when there is a tremendous need for more investment in access to health care services,” she said.

Do you have any tips on state-funded anti-abortion programs? Cassandra Jaramillo can be reached by email at cassandra.jaramillo@propublica.org or by Signal at 469-606-9665.

Caroline Chen and Kavitha Surana contributed reporting.

This post was originally published on ProPublica.