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ARIZONA HOUSE OF REPRESENTATIVESFifty-seventh Legislature First Regular Session |
Senate: APPROP DPA 6-4-0-0 |
SB 1734: developmental disabilities; appropriations; waivers.
Sponsor: Senator Kavanagh (with permission of committee on Rules), LD 3
Overview
An emergency measure that appropriates a total of $109,200,300 from the Prescription Drug Rebate Fund and $403,000,000 in developmental disabilities (DD) Medicaid expenditure authority in FY 2025 to the Arizona Department of Economic Security (DES) for DD Medicaid Program expenses. Appropriates $13,100,000 from the Prescription Drug Rebate Fund in FY 2025 to DES for Cost-Effectiveness Study – Client Services. Outlines requirements relating to waiver amendment requests, the Parents as Paid Caregivers (PPCG) Program and reporting requirements on the use of federal funds. Requires the Auditor General to conduct or contract for a special audit of the PPCG Program.
History
AHCCCS
Laws 1981, Fourth Special Session, Chapter 1, effective 1982, established AHCCCS to administer Arizona's Medicaid program. It is a federal health care program jointly funded by the federal and state government that oversees contracted health plans for the delivery of health care services to individuals and families who qualify for Medicaid and other medical assistance programs. AHCCCS statutory authority is outlined in Arizona Revised Statutes Title 36, Chapter 29 (AHCCCS Administration) and Chapter 34 (Behavioral Health Services).
AHCCCS operates under an integrated managed care model, through a Research and Demonstration 1115 Waiver. The 1115 Waiver refers to Section 1115 of the Social Security Act (SSA). The 1115 Waiver grants the U.S. Secretary of Health and Human Services the authority to approve experimental, pilot or demonstration projects that promote the objectives of the Medicaid program. States must comply with Title XIX (Medicaid) and Title XXI (Children's Health Insurance Program) of the SSA. AHCCCS has been exempt from specific provisions of the SSA, pursuant to an 1115 Research and Demonstration Waiver.
AHCCCS Parent as Paid Caregivers 1115 Waiver Amendment Request
During the federal COVID-19 Public Health Emergency, AHCCCS received temporary authority from the Centers for Medicare and Medicaid Services (CMS) to allow parents of minor children with disabilities to be paid caregivers. The temporary authority ensured children received services during the Public Health Emergency and continued when direct care workers became ill or left the workforce. AHCCCS sent an 1115 Waiver amendment to CMS requesting to make this authority permanent on September 27, 2023 (1115 Waiver Amendment Request).
AHCCCS received approval from CMS to permanently allow parents of minor children to get paid to provide attendant care and habilitation when it meets an extraordinary care definition. Extraordinary care is described as: 1) care for the Medicaid member that exceeds the range of activities a parent would ordinarily perform in the household on the member’s behalf if they did not have a disability or chronic illness; and 2) care which is necessary to assist the Medicaid member’s health and welfare to avoid institutionalization.
DES and AHCCCS work collaboratively to implement the PPCG Program (AHCCCS/DES PPCG letter).
Cost-Effectiveness Study – Client Services
The FY 2025 Enacted Budget included $8,420,000 for Cost-Effectiveness Study (CES) – Client Services. Of that amount, $7,200,000 came from the state General Fund and $1,220,000 from the Special Administration Fund. The DD program's Federal Waiver requires a client's home and community-based services to be at or below the cost of an institutional setting to ensure home and community-based services are cost-neutral for the federal government. The CES – Client Services line-item funds the costs of clients above the CES rate of an institutional setting, allowing them to remain in a home and community-based setting.
Federal Grants-In-Aid Reporting Requirements
The Director of the Governor's Office of Strategic Planning and Budgeting (OSPB) is required to report to the Legislature each regular session findings and recommendations relating to federal grants-in-aid. The report on federal grants-in-aid is required to specify findings and recommendations on: 1) the total amount received by state agencies during the prior fiscal year; 2) the total amount available to state agencies during the prior fiscal year; 3) the adequacy of grant-in-aid programs in this state; 4) the federal grant-in-aid programs this state does not participate in; 5) legislation necessary for the activation of federal programs the state does not participate in; 6) legislation necessary for the improved operation of federal-in-grant programs in progress in this state; and 7) the advisability of accepting new grant-in-aid programs or discontinuing existing programs (A.R.S. § 41-723).
Provisions
Division of Developmental Disabilities
1. Appropriates $109,200,300 from the Prescription Drug Rebate Fund in FY 2025 to DES for DD Medicaid Program expenses. (Sec. 5)
2. Appropriates $403,000,000 from developmental disabilities Medicaid expenditure authority in FY 2025 to DES for DD Medicaid Program expenses. (Sec. 5)
3. Appropriates $13,100,000 from the Prescription Drug Rebate Fund in FY 2025 to DES for DD CES - Client Services. (Sec. 5)
Parents as Paid Caregivers Program
4. Directs DES and AHCCCS to implement the weekly cap of 40 hours of care services per child for the PPCG Program by July 1, 2025, in accordance with the PPCG Program Waiver Amendment Approval by CMS. (Sec. 2)
5. Requires DES to implement an electric visit verification system that delineates whether a parent or a nonparent provider is providing the direct care services. (Sec. 1)
6. Directs DES to implement unique modifiers for delineating:
a. whether a parent or nonparent provided the direct care services; and
b. attendant care services and habilitation services. (Sec. 1)
7. Prohibits a parent from billing for attendant services provided while the minor child is not present, including when the minor child is:
a. at school;
b. in inpatient care; or
c. receiving care in a clinical setting. (Sec. 1)
8. Prohibits a parent caregiver from billing for attendant care services for housekeeping, laundry or meal preparation that would ordinarily be performed by a parent of a minor child who does not have a disability. (Sec. 1)
9. Specifies that a parent caregiver may only provide attendant care and habilitation services under the PPCG Program between 6:00 AM and 10:00 PM, except as otherwise provided in the minor child's plan of care. (Sec. 1)
10. Specifies that a parent may only be employed by a single agency to provide services under the PPCG Program. (Sec. 1)
11. Requires, subject to approval by CMS, a parent to be a resident of this state for at least six months before being eligible to provide care under the PPCG Program. (Sec. 2)
12. Requires AHCCCS and DES to provide the staff of the Joint Legislative Budget Committee (JLBC) quarterly reports on the utilization of attendant care and habilitation services by parent caregivers under the PPCG Program. (Sec. 1)
13. Outlines requirements for the quarterly report. (Sec. 1)
14. Instructs AHCCCS to develop and DES to implement, by October 1, 2025, a strengthened assessment tool to determine the need for extraordinary care for minor children under the PPCG Program. (Sec. 1)
15. Directs the assessment tool to separate household tasks that would ordinarily be performed by the parent of a minor child who does not have a disability. (Sec. 1)
Waivers
3. Prohibits AHCCCS from submitting to CMS or its successor agency any new waiver amendment proposal or proposal for a new provision in a waiver extension without first obtaining legislative approval in the form of an authorizing statute if the waiver:
a) expands eligibility;
b) adds new categories of covered services or benefits; or
c) will lead to an annual increase in utilization greater than 10% for specific services affected by the request. (Sec. 2)
4. Tasks AHCCCS with determining if a new waiver amendment proposal is subject to legislative approval. (Sec. 2)
5. Requires any proposed changes that are subject to legislative approval to be reviewed by the Health and Human Services (HHS) Committees of Reference or its successor committees of reference. (Sec. 2)
6. Instructs the HHS Committees of Reference or its successor committees of reference to forward their recommendation to the Senate and the House of Representatives on whether to approve the proposed changes. (Sec. 2)
7. Directs AHCCCS, for proposed waiver changes not subject to legislative approval, to monitor changes in annual utilization for services impacted by the waiver changes for three years after the implementation of the changes to determine whether they led to an annual increase in service utilization above 10%. (Sec. 2)
8. Requires AHCCCS, if AHCCCS determines the annual utilization rose above 10% for a specified service due to a waiver change that was not subject to legislative approval, to:
a) notify the Speaker of the House of Representatives, President of the Senate and the Chairperson of JLBC; and
b) submit a request to CMS or its successor agency to terminate the new waiver changes if the legislature has not enacted a statute authorizing the specific waiver change within one year of AHCCC's notification of increased service utilization. (Sec. 2)
9. Requires AHCCCS to notify JLBC in writing of any submitted waiver application or amendment, regardless of whether legislative approval is required, at the time the application or amendment is posted for public comment. (Sec. 2)
Federal Monies Reporting Requirements
10. Requires the Director of OSPB annually on September 1 or with the submission of agency budget requests to report to the staff of JLBC:
a) a report on the use of federal monies by any state agency that receives or expects to receive federal monies or administers a program supported by federal monies; and
b) if any state agency received notice of a reduction in federal monies from a specific grant of 50% or more from the previous fiscal year and the plan to either reduce or eliminate the services provided through the grant or to continue services without increases to any state resources. (Sec. 3)
11. Directs the report on the use of federal monies by a state agency to:
a) delineate the federal monies received for the prior fiscal year;
b) delineate the federal monies to be used by the agency for the current and upcoming fiscal year, including any programs supported by federal monies in which a loss of those monies may impact the continuity or delivery of services;
c) identify the date, if known, when federal monies are set to expire;
d) identify any obligations, agreements or memoranda of understanding that may be impacted by federal or state decisions regarding federal receipts, including state matching requirements; and
e) calculate the percentage of federal monies from the total monies available for the state agency for the fiscal year. (Sec. 3)
12. Exempts universities under the jurisdiction of the Arizona Board of Regents from the usage of federal monies reporting requirements for state agencies. (Sec. 3)
13. Requires universities to submit an audited schedule of federal award spending for the prior fiscal year to JLBC staff. (Sec. 3)
14. Eliminates reporting requirements for the Director of OSBP relating to:
a) the total amount of federal grants-in-aid received by state agencies during the prior fiscal year;
b) the total amount of federal grants-in-aid available to state agencies during the prior fiscal year and the reasons for any differences between the amount of money available to the amount accepted by state agencies; and
c) the adequacy of grant-in-aid programs in this state. (Sec. 3)
PPCG Program Special Audit
15. Instructs the Auditor General to conduct or contract for a special audit of the PPCG Program. (Sec. 4)
16. Outlines reporting requirements for the special audit that is due August 1, 2026. (Sec. 4)
17. Appropriates $355,000 from the Prescription Drug Rebate Fund in FY 2025 to the Auditor General for the special audit. (Sec. 5)
18. Exempts the appropriation from lapsing. (Sec. 5)
Miscellaneous
19. Contains an emergency clause. (Sec. 6)
20. Defines terms. (Sec. 1-2)
21. Makes technical and conforming changes. (Sec. 3)
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SB 1734
Initials JB/AG Page 0 Substituted
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