GOP Raises Concerns Over Arizona Medicaid Chief Operating with Expired Medical License

Arizona House Republican leaders are raising serious concerns after discovering that the Chief Medical Officer of AHCCCS, the state's Medicaid program, has been operating without a valid medical license for several months.

Dr. Theresa Costales, who oversees medical decisions at AHCCCS, failed to renew her medical license when it expired in April. AHCCCS administers health care services to more than 2 million Arizona residents, approximately one in three people statewide.

Dr. Costales received the role of Chief Medical Officer in January 2025. Her medical license was due for renewal on April 9, but the renewal was never completed. According to the Arizona Medical Board, the license remained technically active during a statutory grace period that expired on August 9. Following that date, the permit became entirely invalid.

Despite the lapsed licensure, Dr. Costales has continued in her position, making critical health policy decisions that affect millions of Arizonans.

As Chief Medical Officer, Dr. Costales holds giant responsibilities, including serving as an expert witness in legal proceedings and advising on clinical policies that directly impact patient care. Medical professionals in those positions are typically required to maintain active licensure. 

By comparison, the Arizona Department of Corrections mandates that Chief Medical Officer candidates "possess a valid, unrestricted Arizona medical license" as a prerequisite for employment.

Official Responses

"A lapse like this should never happen in a healthcare agency responsible for millions of people," said Speaker of the House Steve Montenegro. "The public deserves accountability when even the most basic standards aren't met."

"We work every day to protect the health and well-being of Arizonans, yet AHCCCS failed to do something as basic as verify a medical license," said House Majority Leader Michael Carbone. "Any citizen can look this up in minutes. That it slipped through the cracks at the highest level of medical leadership is completely unacceptable."

House Majority Whip Julie Willoughby then criticized the appointment of an unlicensed individual to a key healthcare role, stating that “as a healthcare professional, I find it deeply disturbing that someone is allowed to make decisions affecting vulnerable populations without a valid medical license. You cannot have a Chief Medical Officer without an active license—it's that simple.”

“Was this avoidance? Was she afraid her license wouldn't be renewed?" she questioned. "Those are serious questions that demand answers."

Republican leadership has attributed this oversight to Governor Katie Hobbs' administration, contending that the failure undermines public confidence in one of the state's largest healthcare agencies.