Report to the Interim Committee on Statutory Funding Formulas: Health and Welfare Funding Formulas

              Report to the
Interim Committee on
Statutory Funding Formulas
Health and Welfare Funding Fonnulas
Prepared by
the Staff of the
Joint Legislative Budget Committee
July 21, 1993
Foreword
This report represents the first in a series of
reports on statutory funding formulas by the
Staff of the Joint Legislative Budget Committee.
These reports have been prepared in accordance
with the provisions of Laws 1993, Chapter 38,
which created the Interim Committee on
Statutory Funding Formulas and provided for the
JLBC Staff to compile a listing of statutory
funding formulas for the Committee's
consideration. This report represents a
compilation of Health and Welfare funding
formulas.
Health and Welfare Funding Formulas
Summary and Table of Contents
FY 1994 State or Federal
AgencvIProgram Name General Fund Budpet Program Page No.
Deuartment of Economic Security
Aid to Families with Dependent Children
General Assistance
Child Care
JOBS
Foster Care
Comprehensive Medical & Dental Program
Adoption Services
Institutional Support Payments
Supplemental Payments
Developmental Disabilities Long Term Care
Total - DES
Federal
State
Both
Federal
Both
State
Both
State
State
Federal
Arizona Health Care Cost Containment System
Acute Care $ 432,718,900 Both 18
11 Arizona Long Term Care System - 0- - Federal 23
Total - AHCCCS $ 432,718,900
De~ artment of Health Services
Behavioral Health
Children's Rehabilitative Services
Total - DHS
Total - All Programs
- 11 Counties fund the state matching portion of ALTCS.
- 21 Current estimate.
21 $ 145,402,700 - Both 25
17,985,200 Both 30
$ 163,387,900
Interim Committee on Statutory Funding Formulas 1
AGENCY: Department of Economic Security ( DES)
PROGRAM: Aid to Families with Dependent Children ( AFDC)
Statutory Citation: A. R. S. 9 46- 29 1
program Description
Provides financial assistance to low- income households with children who meet certain eligibility
requirements. The program focuses on low- income children who have been deprived of parental support
or care because a parent is absent from the home continuously, is incapacitated, deceased or is unemployed.
The parents or custodian of the child also qualifies for benefits. Prior to October 1, 1990, the AFDC
program in Arizona only served single- parent families. There is now a 2- parent program which limits
benefits to 6 months.
Families receiving AFDC benefits are automatically eligible for AHCCCS. The federal Family Support
Act of 1988 requires states to provide: ( 1) transitional AHCCCS benefits for those who lose AFDC
eligibility as a result of increased income, ( 2) child care if it is determined as necessary for a parent to
participate in education or training activities, ( 3) a Job Opportunities and Basic Skills Training Program
( JOBS), ( 4) transitional child care if a family loses AFDC eligibility based on increased income, and ( 5)
a Child Support Enforcement program. The federal AFDC statutes also provide entitlement funds to
provide child care to families who are at risk of becoming eligible for AFDC.
N 1994 Funding
The federal government matches benefit payments at the Federal Medical Assistance Percentage
( FMAP) which is 65.9% for state FY 1994. The federal government matches administrative
expenditures at a 50% match rate.
State General Funds Non- A~~ ro~ riaFtuendd s Federal Funds - Total
$ 95,138,500 $ 500,000 $ 298,219,900 $ 393,858,400
Eligibility Criteria
The annual income eligibility limit for a family of 3 is $ 4,164. The income limit is tied to the maximum
benefit level, described below. Since benefits are reduced dollar for dollar by countable income, monthly
income must be less than the maximum benefit level to qualify for full assistance. For purposes of
calculating eligibility, DES must exclude income from a number of sources, such as food stamp benefits,
tax refunds, certain energy assistance payments, Supplemental Food Program for Women, Infants and
Children ( WC) benefits and vocational rehabilitation allowances.
Financial resource limits are:
Home equity -
Vehicle Equity -
Other Personal Property
excluding clothes and furniture -
Excluded
$ 1,500
Eligibility for AFDC ends on a child's 18th birthday. A state option, which Arizona uses, is to
continue benefits up to the 19th birthday if a child is a full- time student and can be reasonably
expected to complete the program before they reach their 19th birthday.
Current Population Statistics
Single- Parent Program
2 - Parent Program
FY 1994 Average
Interim Committee on Statutory Funding Formulas
2
Benefits/ Services
State law sets benefits at 36% of the Federal Poverty Level ( FPL), adjusted for family size and shelter
costs. As the FPL is indexed annually to account for inflation, recipients receive an inflation adjustment
each July 1. The indexation of benefits raises the income eligibility threshold, which allows more
households to qualify. In FY 1994, this adjustment was not funded for a FY 1994 savings of $ 2.9 million
in General Funds. Recipients who do not have shelter obligations receive benefits based on the A- 2
schedule; whereas, all others are based on the A- 1 schedule. The payment levels below represent the
maximum benefits, which are reduced dollar for dollar by countable income.
No. of Persons
1
2
3
4
5
6
Mandatory vs. Optional
The AFDC program is optional, although currently all 50 states participate. The 2- parent program
was optional prior to October 1, 1990 but is now mandatory for states who have the single- parent program.
Arizona limits eligibility for the 2- parent program to 6 months, an option available to participating states.
States may establish resource limits within certain federal limitations. The family's home
equity must be excluded, however the state may establish stricter guidelines on vehicle equity and
personal property. The resource limits above for these categories are the highest allowed by the
federal government.
States set their own benefit levels, which in turn sets the income eligibility standard. As of January
1992, the U. S. average for a family of 3 was $ 372. Arizona, which had a benefit level of $ 334, was
ranked 35th nationally. Mississippi had the lowest benefit level at $ 120, and Alaska the highest with a
monthly benefit of $ 924.
Interim Committee on Statutory Funding Fomulas 3
AGENCY: Department of Economic Security @ ES)
PROGRAM: General Assistance ( GA)
Statutory Citation: A. R. S. 9 46- 231
~ rogramD escription
Provides financial assistance to low- income individuals who are disabled to the degree that they are
" unemployable" as defined by DES and to low- income persons required to live in the same home with and
provide custodial care to a disabled person. General Assistance is typically received by single individuals
not eligible for any other federal or state cash assistance programs.
FY 1994 Funding
State General Funds Federal Funds - Total
$ 15,441,700 $ 0 $ 15,441,700
Eligibility Criteria
A person may qualify with a medical disability ( physical or mental) or a combined medical- social
disability. A medical disability must be certified by a doctor to last at least 30 days from the date of
application and prevent substantial, gainful employment. A social disability, such as advanced age, lack
of education, and employment history or language barriers, may also be taken into account.
The annual income eligibility for an individual is $ 2,076. The income limit is tied to the maximum
benefit level, described below. Since benefits are reduced dollar for dollar by countable income, monthly
income must be less than the maximum benefit level to qualify for assistance. For purposes of calculating
eligibility, DES opts to exclude income from a number of sources, such as food stamp benefits, tax
refunds, certain energy assistance payments, Supplemental Food Program for Women, Infants and Children
( WIC) benefits, and vocational rehabilitation allowances.
Financial resource limits are:
Home equity - $ 50,000
Vehicle Equity - 1,500
Other Personal Property
excluding clothes and furniture - 1 , ooo
Beginning in FY 1994, eligibility will be limited to 12 months out of every 36- month period. The 36
month time period will begin on July 1, 1993 for those already enrolled and on the date of enrollment for
those newly eligible.
Current Population Statistics
FY 1994 Average 9,000 recipients
Interim Committee on Statutory Funding Formulas 4
Figure 1
Primary Disabilities
Mental Illness
18%
InjuriedRacturur
34%
cohoUDrug Abuse
9%
Other
4%
MedicaVDhue
35%
Source: 1992 DES General Assistance Progrnm Evaluation
Benefits/ Services
Based on state regulation, benefits have been based on 47.2% of the 1983 standard of need since January
1, 1986. Benefits are adjusted for the number of persons who qualify and whether or not the recipients
have a shelter cost. Recipients who do not have shelter obligations receive benefits based on the A- 2
schedule; whereas, all others are based on the A- 1 schedule. The payment levels below represent the
maximum benefits which are reduced dollar for dollar by countable income.
No. of Persons - A- 1
1 $ 173
2 233
Mandatory vs. Optional
As the General Assistance ( GA) program is a state- only program, it may be modified at the discretion of
the Legislature.
Interim Committee on Statutory Funding Formulas 5
AGENCY: Department of Economic Security ( DES)
PROGRAM: Child Care
Statutory Citation: Annual General Appropriation Act, the federal Family Support Act, the federal IV- A At- Risk
Care Program, the federal Child Care Development Block Grant ( CCDBG)
Program Description
The department provides a subsidy for 5 different child care programs: State Day Care subsidy, AFDC-Employed,
At- Risk, JOBS Child Care, and Transitional Child Care. In addition to these programs, there
is the 100% federally funded CCDBG program which prohibits supplanting state funds with these federal
dollars.
N 1994 Funding
For all but the State Day Care program, state funding is matched with federal funds at the Arizona's
Federal Medical Assistance Percentage ( FMAP), which is 65.9 % for FY 1994. However, the At- Risk
program's federal funding is capped at $ 4,000,000. The federal funding for the State Day Care program
is from the Social Services Block Grant, Title XX. Although the state decides how we will expend Title
XX monies on social services, these federal monies cannot be used as part of the state's match for those
federal programs requiring a state match.
Child Care Programs
State Day Care
AFDC- Employed Child Care
At- Risk Child Care
JOBS Child Care
Transitional Child Care
CCDBG
Total*
General Fund
$ 7,492,200
2,028,300
2,069,800
1,078,100
1,340,400
- 0-
$ 14,008,800
Federal
$ 6,489,800
3,919,800
4,000,000
2,083,500
2,590,400
8.964.000
$ 28,047,500
- Total
$ 13,982,000
$ 5,948,100
$ 6,069,800
$ 3,161,600
$ 3,930,800
8.964.000
$ 42,056,300
Eligibility Criteria
State Day Care - A family's income must be equal to or less than 65% of the state medium income of
October 1987. For a family of three, the income eligibility limit is $ 17,500. The subsidy amount varies
according to a family's income, size, and the number of hours of child care received per child.
AFDC- Employed - AFDC families who need child care to accept or maintain employment.
At- Risk Child Care - A family's gross monthly income level must be below 33.5% of the October 1991
state median income and the family is at risk of qualifying for AFDC unless they receive child care to
accept or maintain employment. For a family of three, the income eligibility limit is $ 10,800. This
program's criteria is similar to that of the CCDBG. This program, however, requires a state match to
draw down federal funds; whereas, CCDBG is 100% federally funded.
JOBS Child Care - Qualifying AFDC recipients must be a JOBS program participant.
Transitional Child Care - Family clients may receive a monthly child care benefit up to 12 months if they
are former AFDC recipients who are no longer AFDC eligible due to increased earnings. In addition,
these clients must have received AFDC benefits for 3 to 6 months prior to losing AFDC eligibility due to
increased earnings.
CCDBG - A family's gross monthly income level must be below 33.5 % of the October 1991 state median
income and child care is needed to obtain employment, job training, or education. For a family of three,
the income eligibility limit is $ 10,800. In addition to the $ 8,964,000 for the day care subsidy, $, 1,584,000
of CCBDG funds are projected to be spent on staff and operating costs; $ 2,636,900 is to be expended on
early childhood development and before and after school programs; and $ 879,000 will be expended on
resource and referral services. The latter 2 expenditure estimates meet federal requirements.
Interim Committee on Statutory Funding Formulas 6
Current Population Statistics
State Day Care
AFDC- Employed
At- Risk Child Care
JOBS Child Care
Transitional Child Care
CCDBG
TOTAL
FY 1994
Monthly Average of Children
12,727
2,749
2,991
1,566
1,663
4.269
25,965
Figure 1
Placement of Child Care
Clients
State Day Care
49%
JOBS Child Care
AFDC- Employe 6%
11%
At- Risk Child Care
12% Transitional Care 16%
6%
BeneJits/ Sentices
The department provides a monthly child care subsidy. The At- Risk, Transitional Child Care, and the
CCDBG programs require a parental co- payment which is determined by using a sliding fee schedule.
State Day Care
AFDC- Employed
At- Risk Child Care
JOBS Child Care
Transitional Child Care
CCDBG
Monthl y Average FY 1994 Monthly
Co- Payment Average Subsidy Per Child
$ - 0- $ 91.55
- 0- 180.33
10.75 169.14
- 0- 168.24
16.04 196.96
10.12 175.00
Mandatory vs. Optional
The State Day Care program is an optional state program. However, receipt of CCDBG, which also
is optional, requires the state to maintain its FY 1990 state funding level. The At- Risk program is also
an optional program offered under the federal Title IV- A At- Risk Child Care program. The
remaining three programs are federally mandated under the Family Support Act of 1988, if a state
participates in the AFDC program.
The State Day Care maximum income level for eligibility is set in the General Appropriation Act. The
benefit level is not mandated, but has been at its current level for a number of years.
The At- Risk and CCDBG maximum income levels for eligibility are determined by the states. The benefit
levels for these two programs as well as AFDC- Employed, JOBS and Transitional Child Care are required
by federal regulation to be market- based rates as determined by each state.
Interim Committee on Statutory Funding Formulas 7
AGENCY: Department of Economic Security ( DES)
PROGRAM: Job Opportunities and Basic Skills ( JOBS)
Statutory Citation: The Federal Family Support Act
Program Description
Federal law required the state to begin offering this education, employment and/ or training program to
AFDC recipients by October 1, 1990. Two populations are served by this program: the JOBS- Basic
population, which consists of AFDC single- parent households; and the JOBS- 2- Parent Employed Program
( TPEP), which consists of 2- parent households where the primary wage earner is unemployed.
Since October 1, 1992, the state's JOBS program is being implemented statewide. Laws 1992, Chapter
103 revised the program's focus to emphasizing a balance between immediate employment and education
and training services. This new focus was initiated on October 1, 1992, as well, and should be
implemented statewide by October 1, 1994.
FY 1994 Funding
The state amount is matched by federal funds of $ 6,468,800, which is a 68.4% match. This match reflects
the department's receipt of federal funds at various match rates. Some funds are received at a 90110%
match and some at 50150 5%. Most of the federal funding is a 65.9134.196 match, which is Arizona's
Federal Medical Assistance Percentage ( FMAP) for FY 1994. In previous years, the state drew down only
a 50 5% match.
General Fund Federal
JOBS- Basic for single AFDC Households $ 1,580,300 $ 3,420,700 $ 5,001,000
JOBS- 2- Parent Employed Program
for AFDC- UP Households 1.408.200 3,048,100 4,456,300
Total $ 2,988,500 $ 6,468,800 $ 9,457,300
Eligibility Criteria
Under the Federal Family Support Act, all non- exempt AFDC recipients are mandated to participate
in the JOBS program. However, due to resource constraints, not all nonexempt AFDC recipients are
contacted to participate. The exemption criteria for the AFDC- Basic program includes: having a child
under the age of 2 years for which the AFDC- parent is providing personal care ( this age was set by the
state); being eligible for a Tribal JOBS program; having a child between the age of 2 and 6 years of age
and not having adequate child care; being less than 16 years of age or older than 60 years of age; residing
at a travel distance of 1 hour or more from a JOBS office; already employed; or being disabled or a
caretaker of a disabled person. For the most part, the exemptions do not apply to the JOBS- TPEP primary
wage earner, but do apply to the spouse.
Current Population Statistics
AFDC Adult Recipients Served
JOBS- Basic 11,841
JOBS- TPEP 4,520
TOTAL 16,361
The department estimates that approximately 30 5% of Arizona's adult AFDC- recipients meet the mandated
JOBS participation requirements, since the remaining 70% meet the exemption criteria.
Benejits/ Services
Services vary based on the assumed need of the clients, which is determined in the initial appraisal and
assessment. Services include case management, the development of an employment plan, transportation
costs, skills training, basic and vocational education, employment services and work experience ( workfare).
Interim Committee on Statutory Funding Formulas
8
Mandatory vs. Optional
JOBS is federally mandated only if states choose to participate in the AFDC program. The only
eligibility criteria which is optional for the state is the age of the child for which an AFDC single- parent
or the AFDC- TPEP spouse can personally provide child care and be exempted from JOBS participation.
The states may set the age between 1 and 3 years of age. Arizona has set the age at 2.
The federal law also mandates the following services: education below the college level, such as basic
or adult education ( G. E. D. or remedial) and English as a Second Language; job skills or vocational
training; job readiness; and job development and placement. Services that are optional under the federal
law are: job search; on- the- job- training; unpaid community work service; and work supplementation. The
only optional program not offered by the Arizona JOBS program is work supplementation, which is the
utilization of AFDC funds that recipients would have received, if they had not been for working, to
subsidize employers and develop jobs.
Interim Committee on Statutory Funding Formulas 9
AGENCY: Department of Economic Security ( DES)
PROGRAM: Foster Care
Statutory Citation: A. R. S. 5 46- 134 and Federal Title IV- E of the Social Security Act
Program Description
The department provides payment to all licensed foster care facilities for the cost of foster care.
N 1994 Funding
- State Federal
$ 12,180,000 $ 6,620,500 $ 18,800,500
Eligibility Criteria
Payment is provided for any child ad~ udicatedd ependent by the courts or voluntarily placed in foster care.
Under the Title IV- E program, the federal government will match funds at a 65.9% rate for the
maintenance payments for those foster care children from an AFDC household.
Current Population Statistics
FY 1994 Budgeted Caseload 2,519 children
Benefits/ Services
The department's payment schedule covers the costs specified under the federal requirement which includes
food, clothing, and general incidentals. The payment is determined by the child's age and special needs.
FY 1994 Average Annual State Cost per Child $ 4,836
Mandatory vs. Optional
State law requires DES to provide payment for the cost of foster care. While eligibility is defined
by state law, DES has the flexibility to determine the benefit level. By federal law, states are
required to provide foster care maintenance payments for all AFDC- eligible children, if the state
participates in AFDC. The costs covered under the federal requirement are food, shelter, clothing, daily
supervision, school supplies, general incidentals, liability insurance for the child, and travel costs to the
child's home for visits.
Interim Committee on Statutory Funding Formulas
10
AGENCY: Department of Economic Security @ ES)
PROGRAM: Comprehensive Medical and Dental Program ( CMDP)
Statutory Citation: A. R. S. 9 8- 512
program Description
Provides full coverage of medical and dental expenses of the state's foster children. The CMDP contracts
with providers for the provision of health care. For purposes of receipt of AHCCCS and ALTCS
reimbursement, CMDP serves as an AHCCCS and ALTCS acute care health plan. CMDP receives a
capitation payment for each qualifying child. If the health cost is greater than the capitation payment,
CMDP pays the difference with General Fund dollars.
N 1994 Funding
The federal funds reflect the AHCCCS and ALTCS reimbursement for the foster children who are Title
XIX ( Medicaid) eligible. The other funds reflect money collected from private insurance.
General Fund Federal Other Total
Eligibility Criteria
Children must be under the custody of the DES and be placed in a foster home, with a relative, in a
certified adoptive home prior to ha1 order of adoption, or in an independent living program. Children
in the custody of a probation department and placed in foster care also qualify.
Current Population Statistics
FY 1994 Annual Average 5,861
Benefits/ Services
Services provided include regular health examinations, including hearing and vision, vaccinations, inpatient
and outpatient hospital care, psychological and psychiatric services, dental care and medication.
FY 1994 Average Cost Per Child $ 1,774.48
Mandatory vs. Optional
CMDP is a state mandated program. However, approximately 75% of the state's foster children are
Medicaid ( Title XIX) eligible, which entitle them to the Medicaid services available in Arizona. CMDP
has traditionally been fully funded.
Interim Committee on Statutory Funding Formulas
11
AGENCY: Department of Economic Security @ ES)
PROGRAM: Adoption Services
Statutoly Citation: A. R. S. $ 8- 141 through 145, and Federal Title IV- E of the Social Security Act
Program Description
Adoption assistance is available for any DES- approved parents adopting a child.
FY 1994 Funding
- State Federal - Total
$ 12,523,300 $ 1,149,500 $ 13,672,800
The department projects a shortfall for FY 1994 due to increasing caseload growth. The DES anticipates
addressing the shortfall by lowering costs, drawing down more federal funding, and/ or transferring monies
to this program from other areas in the department experiencing surpluses.
Eligibility Criteria
To be eligible for a subsidy, the children to be adopted must entail high financial risks to prospective
parents because of physical, mental or emotional disorders, or who, because of age, sibling
relationship, or racial or ethnic background would be otherwise difficult to place in adoption. Laws
1993, Chapter 5, 2nd Special Session, establishes that a family with an income in excess of 400% of the
most recently established federal poverty level is ineligible for the adoption subsidy when adopting a child
not qualifying for federal reimbursement.
Under the Title IV- E program, the federal government will reimburse 65.9 96 of the cost of the adoption
of any children from an AFDC or SSI household.
Monthly Subsistence Payment - Adoptive parents must request receipt of this payment and an explanation
why the money is needed. The adoptive family's income is not a determining factor for establishing the
need for this payment. However, generally only those children with special needs or those who are being
adopted by their foster parents will be eligible.
Special Services Subsidy - Children qualifying for this subsidy must be diagnosed with a pre- existing
condition, or diagnosed at risk of developing a condition which will require treatment or surgery after
adoptive placement. Available resources, such as the adoptive parent's insurance and other public and
voluntary community services, are to be utilized first to cover the services for medical, dental and
emotional conditions. However, the subsidy may be approved to ensure continued services to the child
should insurance or other resources be unavailable in the future.
Current Population Statistics
FY 1994 Budgeted Caseload 1,618.5 children
The department projects an increasing caseload growth. For the month of April, 2,031 children received
adoption services.
Benefits/ Services
Subsistence Payments are issued monthly to the adoptive parents. These monthly payments are set by the
department and by state law shall not exceed the current foster family care rate. The payments may be
provided for only a specific time period or may be paid until the child reaches the age of 18, or 21, if the
child is still in high school. The FY 1994 estimated monthly average payment is $ 354.69.
The Special Services Subsidy includes treatment of medical, dental, and emotional conditions, physical
therapy, rehabilitation training, speech and hearing therapy, and purchase or rental of wheelchairs, braces,
crutches, prostheses, glasses and hearing aids. In addition, the DES, as a last resort, may provide partial
--
Interim Committee on Statutory Funding Formulas 12
or full tuition to ensure the child is provided appropriate special education services. The FY 1994
estimated monthly average payment is $ 349.3 1.
FY 1994 Budgeted Average Monthly Cost per Child $ 704.00
Mandatory vs. Optional
State law requires DES to provide an adoption subsidy. DES, however, defines by rule the specific
types of services that can be reimbursed. By federal law, all AFDC or SSI eligible children are
entitled to the adoption subsidy. The federal government also requires all states who participate in
the AFDC program to provide an adoption assistance program. Until FY 1993, the Legislature had
traditionally fully funded this program. Laws 1993, Chapter 5, 2nd Special Session, limits fiscal year
expenditures to the amount appropriated with the exception of federal funds and any departmental transfers.
Interim Committee on Statutory Funding Formulas 13
AGENCY: Department of Economic Security ( DES)
PROGRAM: Institutional Support Payments
Statutory Citation: A. R. S. 9 46- 252, Title XVI of the Social Security Act ( the Supplemental Security Income ( SSI)
Program)
Program Description
The department provides monthly payments to eligible aged, blind or disabled persons who are in private
nursing homes, public nursing homes or supervisory care homes.
N 1994 Funding
General Fund Federal Total
Eligibilib Criteria
Receipt of the monthly payment is dependent upon different criteria for each type of home placement.
Private nursing home recipients must be: a) 65 years of age or older; b) receiving care in a licensed
nursing home; and c) either SSI- eligible or be precluded from receiving this monthly payment solely
because public or private nonprofit charitable organization funds are used to defray the recipient's nursing
home care costs.
Public nursing home recipients must be: a) 65 years of age or older; and b) precluded from receiving the
SSI monthly payment because the person is receiving care in a licensed county- operated nursing home.
Supervisory care home recipients must be: a) residing in a licensed supervisory care home or an adult
foster care home certified by a county, or a seriously mental ill person who resides in a DHS licensed 24
hour residential treatment facility; and b) SSI- eligible.
To be SSI- eligible a person must be: a) 65 years of age or older, blind, or disabled; b) meet limited
income and resource levels; c) a U. S. citizen or lawful immigrant, and a U. S. resident; and d) accept
vocational rehabilitation services if offered if the person is disabled or blind. In addition, a child under
18 years of age who has a severe disability may qualify.
The maximum income limit for an individual's SSI- eligibility is $ 5,054 with a $ 2,000 resource limit.
Current Population Statistics
FY 1994
Avg. Clients
Private Nursing Home 4 1
Public Nursing Homes 0
Supervisory Care Homes 646
Benefits/ Services
Monthly benefit payments shall be made to qualifying clients as follows:
Private Nursing Homes
Public Nursing Homes
Supervisory Care Homes
Mandatory vs. Optional
This program's eligibility and benefits are mandated by state law.
Interim Committee on Statutory Funding Formulas 14
AGENCY: Department of Economic Security @ ES)
PROGRAM: Supplemental Payments
Statutory Citation: A. R. S. 5 46- 252
program Description
The department may provide monthly payments to eligible aged, blind or disabled persons for home health
aide, housekeeping payment, and visiting nurse services.
N 1994 Funding
General Fund Federal Other - Total
Eligibility Criteria
Receipt of the monthly payment is dependent upon different criteria for each type of service.
Housekeeping payment recipients must be Supplemental Security Income ( SS1)- eligible. Visiting nurse and
home health aide recipients must: a) be 65 years of age or older; b) be SSI- eligible; c) have a
substantiated medical need; and d) have no other source available to cover the cost.
Current Population Statistics
FY 1994
AVB. Clients*
Home Health Aide 162
Housekeeping Payments 4,901
Visiting Nurse 115
* These caseloads are based upon FY 1993 estimates, which may change due to removing the
Housekeeping Payments statutory mandate for FY 1994.
Benejits/ Services
Monthly benefit payments may be made to qualifying clients as follows: $ 70 for Housekeeping Payments
and up to $ 160 each for Visiting Nurse and Home Health Aide services.
FY 1994 budgeted monthly cost estimates are:
Home Health Aide $ 107.80
Housekeeping Payments 69.78
Visiting Nurse 81.26
Mandatory vs. Optional
State law establishes the eligibility level and the maximum benefit levels. For FY 1994, this is an optional
state program. Until FY 1993, these services had traditionally been fully funded. Laws 1993, Chapter
5, 2nd Special Session, removed the statutory mandate for providing Housekeeping Payments. In addition,
this legislation limits fiscal year expenditures to amounts appropriated with the exception of federal funds
and any departmental transfers.
Interim Committee on Statutory Funding Formulas 15
AGENCY: Department of Economic Security @ ES)
PROGRAM: Developmental Disabilities Long Term Care ( LTC)
Statutory Citation: A. R. S. 9 36- 293 1
Program Description
As part of the federal Title XIX program, the Long Term Care ( LTC) program provides services to
individuals with mental retardation, cerebral palsy, autism and epilepsy. Besides contracting for services,
the program: ( a) operates the Arizona Training Programs at Coolidge and Tucson and smaller state-operated
group homes, and @) provides case management services to eligible recipients.
N 1994 Funding
The federal government matches state funds at the Federal Medical Assistance Percentage
( FMAP), which will average 65.9% for state FY 1994.
State General Funds Federal and Other Funds Total
$ 42,578,600 $ 106,621,500 $ 149,200,100
Eligibility Standards
Clients must have a chronic disability which is attributable to mental retardation, cerebral palsy,
epilepsy or autism that was diagnosed before the age of 18. Infants and toddlers under the age of
6 may be eligible if they exhibit a significant delay in one or more areas of development or if they
are determined to be at risk of becoming developmentally disabled if services are not provided.
In addition to the medical eligibility requirements, the income limit is set at a level equivalent to 300% of
the Supplemental Security Income ( SSI) eligibility limit. The financial eligibility requirements for a
single- person household are as follows:
Annual Income
$ 15,192
Resources
$ 2,000
Services are available for clients who do not meet eligibility for the LTC program through the 100% state
Developmental Disabilities @ D) program to the extent that funds are available.
Current Population Statistics
Figure 1
Client Placement
May, 1993
Home
ATPT l'kmn
43
Private Vendor
87
ATPT Coolidge
117
Interim Committee on Statutory Funding Formulas
Figure 2
Documented Disabilities
May, 1993
Mental Retardation
49.3 %
Indudes both DD and LTC
BeneJits/ Services
Benefits vary based on the assessed needs of the clients through the Individual Service Program Plan
( ISPP). This plan is established by the case manager, the family, providers and medical personnel.
Services are provided in the least restrictive environment as possible. All clients receive Acute Care
services. Other services include residential day , programs for both adults and children and a wide array
of support services and therapies.
Cost Per Client
Client Placement Cavitation Rate *
Institutional $ 193.64 per day
Home & Community Based 58.75 per day
Acute Care 265.67 per month
Case Management 146.83 per month
* Note - Reflects a statewide average capitation rate for the period of October 1992 to September 1993.
These rates are negotiated annually with the federal government.
Mandatoly vs. Optional
The provision of LTC services is required for participation in the federal Medicaid program. The
state, however, may choose not to participate in the federal Medicaid program. In terms of eligibility,
the state has opted to establish a higher income threshold than the federal minimum standard. The
state's " 300%- of- SSI" s tandard is the maximum allowed by the federal government.
As noted above, the state determines the benefit level ( the capitation rate) in negotiation with the
federal government. Title XIX does not cover educational or vocational training. Within the LTC
budget, the state has opted to appropriate $ 5,488,900 of its own funds for such services. Adult programs,
such as Job Training, Job Placement and Supported Employment account for $ 4.1 million and children
educational programs account for $ 1.1 million.
Interim Committee on Statutory Funding Formulas 17
AGENCY: Arizona Health Care Cost Containment System ( AHCCCS)
PROGRAM: Acute Care
Statutory Citation: A. R. S., Title 36, Chapter 29 and Title XIX of the federal Social Security Act
Program Description
Provides medical care to eligible populations through contracted health plans. Health plans receive a
monthly capitation payment to cover the full range of qualified services for AHCCCS enrollees. In
addition to capitation, Acute Care also includes a Fee for Service component to pay for certain services
incurred by members prior to enrollment in a health plan. Native Americans served by the Indian Health
Service or referred off reservations for services are also covered on a Fee for Service basis. Beginning
in FY 1994, undocumented aliens previously eligible for full services and enrollment in a health plan will
be covered for emergency services only, with those services reimbursed on a Fee for Service basis. To
limit health plan liability in catastrophic care cases, AHCCCS also provides reinsurance and deferred
liability payments for certain predefined cases. Additionally, AHCCCS pays Medicare premiums for
qualified low income Medicare beneficiaries, allowing for the federal Medicare program to serve as a
source of payment for a share of AHCCCS costs. Disproportionate Share Hospital Payments, a recent
addition to the Acute Care program, provide supplementary payments to hospitals serving large numbers
of low income patients.
FY 1994 Funding
Federal Grouus
AFDC
SOBRA Children
SOBRA Women
SOBRA Deliveries
SSI
Total Federal Groups
State Grou~ s
EAC
ELIC
MN/ MI
Total State Groups
General Fund County Funds Federal Funds Total Funds
$ 100,012,000 $ 19,072,200 $ 246,216,300 $ 365,300,500
47,434,200 9,045,700 113,992,300 170,472,200
8,828,300 1,683,500 20,797,400 31,309,200
21,885,100 4,173,500 50,309,100 76,367,700
48,889.900 9,323,300 122,352,100 180,565.300
$ 227,049,500 $ 43,298,200 $ 553,667,200 $ 824,014,900
Subtotal- All Groups $ 408,413,700 $ 77,884,200 $ 553,667,200 $ 1,039,965,100
Other Funding
Medicare Premiums
Qualified Med. Beneficiaries
Dispro Share Payments
Mental Health
SLIAG Offset
Misc. Funds Offset
General Fund County Funds Federal Funds Total Funds
$ 2,729,600 $- 0- $ 5,274,500 $ 8,004,100
659,500 - 0- 1,274,300 1,933,800
32,492,700 - 0- 60,033,300 92,526,000
- 0- - 0- 77,000,000 77,000,000
( 39c'o, 000) - 0- 3,000,000 - 0-
( 8.576.600) N/ A NIA N/ A
Total Budget $ 432,718,900 $ 77,884,200 $ 700,249,300 $ 1,219,429.000
* Note- The County Funds amount assumes a proportional allocation of the $ 77.9 million county Acute
Care contribution across all groups. Amounts shown for the eligibility groups reflect the cost of
Capitation, Fee for Service, Reinsurance, and Deferred Liability.
Interim Committee on Statutory Funding Formulas 18
Figure 1
AHCCCS Acute Care Population
Share of FY 1994
General Fund Budget
AFDC
24%
SOBRA Women
& Deliv EAC, ELIC
8 % & MNWI
44 %
SOBRA Childre
12%
SSI
12%
Overview of AHCCCS Eligibility
AHCCCS coverage is available to two general categories of individuals: 1) Federal eligibility groups,
and 2) state- only groups. Federally- eligible persons are those who are also eligible for cash assistance
such as Aid to Families with Dependent Children ( AFDC) and Supplemental Security Income ( SSI) for the
aged, blind, and disabled, or who qualify under the Sixth Omnibus Budget Reconciliation Act of 1989
( SOBRA), a medical assistance only ( MAO) program targeted at children and pregnant women. Those
eligible by virtue of their receiving AFDC or SSI are commonly referred to as categorically eligible.
Coverage of AFDC, SSI, and SOBRA groups is required for participation in the federal Medicaid
program. Because coverage of these groups is a federal requirement, the federal government pays 65
percent of the cost of care, with the state and counties providing the balance.
State- only groups are those enrolled in 100% state funded programs, such as the Medically
NeedyIMedically Indigent ( MNIMI), Eligible Assistance Children ( EAC), and Eligible Low Income
Children ( ELIC). The MN/ MI program consists of a diverse population but generally includes low income
people who do not qualify for a federal group because of age, gender, condition, or lack of legal U. S.
residency. The MNIMI program is often viewed as a " safety net" since applicants may deduct medical
expenses from their income in order to qualify. EACs are children under the age of 14 living in
households eligible for Food Stamps. ELICs are referred to as a " notch group" since it includes children
under 14 who cannot qualify for SOBRA but whose household income is too high for MNIMI eligibility.
Eligibility Criteria ( for a family of 3)
Federal Eligibility Grouvs
Aid to Families with Dependent Children ( AFDC)
Sixth Omnibus Budget Reconciliation Act ( SOBRA)
SOBRA Women
SOBRA Children under Age 1
SOBRA Children Age 1 to 6
SOBRA Children Age 6 to 9
Supplemental Security Income ( Single)
State Eligibilitv Groups
Eligible Assistance Children ( EAC)
Eligible Low Income Children ( ELIC)
Medically NeedyIMedically Indigent ( MNIMI)
Annual Income Resources
$ 4,164 $ 1,000
While the MNIMI resource standards may appear more generous then the federal AFDC standards, the
MNIMI resource standard includes the equity value in a home and an automobile, whereas AFDC resource
standards do not count the applicant's home and one automobile.
Interim Committee on Statutory Funding Formulas 19
Figure 2
AHCCCS Income Eligibility Levels
( Annual Income by Population Group)
- l u o l . o f o r a I h d y d 3
S S I ~ L f a l p e n o n
X- SOBRA Child. SW- SOBRA w m a l
Current Population Statistics ( As of June 1993)
Federal Grouus
AFDC
SOBRA Children
SSI
SOBRA Women
Total Federal Groups
State Grouus
EAC
ELIC
MNIMI
Total State Groups
Total- All Groups
Enrollment
220,195
106,657
55,571
11.817
394,240
Figure 3
AHCCCS Acute Care Population
Distribution
AFDC
50%
SOBRA Women
3% ELIC & MN/ MI
12%
SOBRA , l d ~ e > ~ E ~ c
24% 1S0S% I 1%
Socnoc: AHCaS Monthly BuoUmcnt ? LMa
Interim Committee on Statutory Funding Formulas 2 0
Benejits/ Services
AHCCCS members are eligible for a wide range of acute care medical services, including inpatient and
outpatient services, lab and x- ray services, pharmacy, emergency care, and organ transplants ( some
transplants are restricted to federally eligible members or children). In general, the cost of care is reflected
in the following capitation rates. However, in catastrophic care cases, such as a premature birth or AIDS,
AHCCCS supplements capitation through reinsurance.
Federal Groups Cavitation Rate *
AFDC $ 111.91
SOBRA Children 90.96
SOBRA Women 110.85
SSI with Medicare 118.99
SSI without Medicare 301.88
State Groups
EAC $ 90.45
ELIC 91.63
MNIMI with Medicare 134.82
MNIMI without Medicare 255.55
* Note- Reflects a statewide average monthly capitation rate for the period of October 1992 to September
1993. Capitation rates paid for federal groups must, according to federal regulations, be actuarially
determined. While capitation paid for state groups is not bound by the same provision, AHCCCS
negotiates rates for state groups on an actuarial basis as well.
Figure 4
AHCCCS Capitation Rates
by Eligibility Group
Moatbly ADowat
$ 350
$ 300
$ 250
..... .................. . .......................
$ zoo ...............
SlSO
$ 100
Sso
$ 0
Por W 1992 - Sopt 1993
Mandatoly vs. Optional
In essence, all AHCCCS programs are optional, from the state's standpoint. The state may choose
not to participate in the federal Medicaid program and in so doing not provide medical coverage to
those also eligible for AFDC, SSI, or women and children potentially eligible under SOBRA. Since
the state has, however, opted to participate in Medicaid and receive federal matching funds, we must
provide medical coverage to certain groups. Those required groups include AFDC and SSI recipients,
and SOBRA Women and Children.
Interim Committee on Statutory Funding Formulas 2 1
Coverage of these groups is required for state participation in Medicaid, but some subgroups of these
federal groups are covered by AHCCCS at the state's option. In the Acute Care program, the two most
significant optional groups are the AFDC- related " Ribicoff Children" and SOBRA Women and
Infants with incomes between 133% and 140% of the Federal Poverty Level ( FPL). Ribicoff Children,
accounting for approximately 7% of AHCCCSIAFDC enrollment, meet AFDC income and resource
standards but are ineligible for AFDC cash benefits because they are not deprived of the support of at least
one parent. SOBRA Women and Infants in the optional income range are eligible due to federal provisions
allowing for Medicaid coverage of women and infants with household income up to 185 96 of FPL. These
SOBRA Women and Infants make up approximately 5% of the SOBRA population.
In addition to defining certain optional groups for purposes of Medicaid eligibility, the federal government
has also established optional services that states may offer recipients and also receive federal matching
funds for a'portion of the cost of these optional services. AHCCCS now covers all required Medicaid
services, with the exception of adult non- SMI mental health services. Optional services covered by
AHCCCS include optometry, dental, and podiatry services, eyeglasses, physical therapy, and
prescription drugs.
Interim Committee on Statutory Funding Formulas 2 2
AGENCY: Arizona Health Care Cost Containment System ( AHCCCS)
PROGRAM: Arizona Long Term Care System ( ALTCS)
Statutory Citation: A. R. S., Title 36, Chapter 29 and Title XIX of the federal Social Security Act
Program Description
ALTCS is a Medicaid program for the low income elderly, physically or developmentally disabled,
providing long term care services to individuals meeting both financial and medical eligibility criteria and
at risk of institutionalization. Services may be provided in either nursing care institutions or in home and
community based settings. ALTCS programmatic costs are funded entirely with county and federal funds.
AHCCCS is responsible for the administration of ALTCS. Individuals identified as developmentally
disabled are referred to the Department of Economic Security ( DES) Division of Developmental Disabilities
( DDD), which serves as the sole program contractor for the developmentally disabled.
FY 1994 Funding
General Fund
County Funds
Federal Funds
TOTAL FUNDS
Overview of ALTCS Eligibility
ALTCS eligibility is generally based on federal Medicaid eligibility categories, such as AFDC, SOBRA
and SSI. There is no state- only component in' ALTCS. These federal eligibility groups provide income
and resource guidelines for ALTCS eligibility. Additionally, ALTCS eligibility rules address the transfer
of assets for the purpose of obtaining eligibility. Once financial eligibility has been established, applicants
must complete a Pre- Admission Screening ( PAS), which is a medical eligibility evaluation conducted by
a nurse and social worker to determine the level of care needed by the applicant.
Eligibility Criteria
Eligibility Groups
Aid to Families with Dependent Children ( AFDC)
Sixth Omnibus Budget Reconciliation Act ( SOBRA)
SOBRA Women
SOBRA Children under Age 1
SOBRA Children Age 1 to 6
SOBRA Children Age 6 to 9
Supplemental Security Income ( SSI)
Annual Income Resources
$ 15,192 $ LOO0
* Note- Income and resources for AFDC and SSI reflect a single person; whereas, SOBRA reflects a
family of three. AFDC and SSI income levels are expressed as 300% of the Federal Benefit Rate.
SOBRA income levels are percentages of the Federal Poverty Level.
Applicants who transfer assets for less than current market value in order to obtain ALTCS coverage may
be denied eligibility for a period of up to 30 months. ALTCS rules allow for the exclusion of certain assets
for the purpose establishing eligibility, such as the applicant's home, a vehicle, household items and
personal effects, up to a set dollar value for certain assets. For example, with SSI- eligible members, the
equity of a home and one automobile is excluded from the calculation of assets. A second vehicle is
excluded if the current market value is less than $ 4,500, while personal effects and household goods up
to $ 2,500 are also excluded.
Interim Committee on Statutory Funding Formulas 23
Current Population Statistics ( As of July 1993)
AFDC
SSI
SOBRA
TOTAL
BeneJits/ Services
The ALTCS service package includes institutional care in a skilled nursing facility, intermediate care
facility, or intermediate care facility for the mentally retarded; home and community based services ( such
as meals- on- wheels, visiting nurse, housekeeping, respite care, transportation, and hospice); and acute
medical services. The current cost of care per ALTCS member is approximately $ 2,100 per month.
Mandatory vs. Optional
The provision of long- term care services is required for participation in the federal Medicaid
program. Options available to states within this context include the placement of clients in home and
community- based settings and the establishment of higher income thresholds. AHCCCS may place up
to 25% of ALTCS clients in home and community- based settings, if such placement is more cost
effective than institutional placement. The number of clients who may reside in home or community-based
settings has been established by the federal government. This limit is known as the " HCBS Cap."
The ALTCS program operates under a waiver that allows for home and community- based placement. The
option to establish higher income thresholds is based on a federal Medicaid provision known as the
" 300 percent rule", which allows states to accept applicants with incomes up to 300% of the Federal
Benefit Rate.
Interim Committee on Statutory Funding Formulas
AGENCY: Department of Health Services ( DHS)
PROGRAM: Behavioral Health
Statutoly Citation: A. R. S. $ 35- 500 et seq., Title XIX of the Social Security Act, various case law precedents.
Program Description
The Behavioral Health Program provides mental health services to adult seriously mentally ill ( SMI), adult
non- SMI, children, seriously emotionally handicapped children, dually diagnosed children, substance
abusers, and general mental health clients. The state provides direct services through the Arizona State
Hospital ( ASH) and the Southern Arizona Mental Health Center ( SAMHC); however, the majority of funds
are distributed through a network of private, " nonprofit," umbrella agencies called Regional Behavioral
Health Authorities ( RBHA's). The RBHA's coordinate and control the delivery of mental health services
in their respective geographical areas and provide treatment through subcontracts with service providers.
FY 1994 Funding
Children's Programs 1' Federal Total
Children's Behavioral Health $ 12,288,800 $ - 0- $ 12,288,800
Children's Title XIX State Match 11,543,300 -- 11,543,300
Seriously Emotionally Handicapped Children 4,332,200 -- 4,332,200
EPSDT- DES 1,038,000 -- 1,038,00
Other Agency Payments 3,622,300 -- 3.622.300
Subtotal Children $ 32,824,600 $ 45,000,000 - Y $ 77,824,600
Adult Seriouslv Mentally I11
Seriously Mentally I11 Services $ 55,349,300 $ -- $ 55,349,300
Regional Residential\ Psychiatric Beds 5,713,500 -- 5,713,500
Community Geriatric Treatment Beds 2,190,000 -- 2,190,000
SMI Clozaril Program 487,100 -- 487,100
County IGA Pass- through Funds 17.000.000 -- 17.000,000
Subtotal Adult SMI $ 80,739,900 $ 32,000,000 $ 112,739,900
Other Programs
Substance Abuse $ 13,357,100 $ -- $ 13,357,100
Mental Health Services 9,745,300 -- 9,745,300
Administration; ASH; SAMHC 37,719.000 -- 37,719.000
Subtotal General Mental Health $ 60,821,400 $ 19,019,400
2/ 31
$ 79,840,800 --
Total Estimated FY 1994 Behavioral Health $ 174,385,900 $ 96,019,400 $ 270,405,300
- 11 Includes mainly General Fund dollars, the primary exceptions being $ 17,000,000 of County IGA Pass-through
funds and $ 11,983,200 of ASH Disproportionate Share Funds.
- 21 There is no breakout of federal funds between program line items.
- 31 Reflects the Alcohol, Drug Abuse, and Mental Health Federal Block Grant. As of October 1, 1992,
this grant was divided into a Mental Health Block Grant and a Substance Abuse Block Grant.
Interim Committee on Statutory Funding Formulas 2 5
Overview of Behavioral Health Eligibility
Behavioral health services are available to two general categories of individuals: 1) Federal Title XIX
eligibility groups, and 2) state- only groups. The eligibility for Title XIX coverage is identical to that
described for the AHCCCS program. In addition to those requirements, the potential client must also
have a qualifying condition which is " medically necessary" to treat. " Medical Necessity" is often open
to subjective interpretation. The federal government pays approximately 65% of the costs of covered
services provided to Title XIX clients, and 50% of the related administrative costs. The state must pay
all costs for non- covered services provided to Title XIX clients.
State- only or subvention clients are served as funding allows. It is unclear what eligibility standards,
if any, are used for the subvention clients. Some subvention clients are charged a co- payment based on
a sliding fee scale. However, some scales vary between providers, and many providers do not use a
sliding fee scale at all. DHS has developed a standard sliding fee scale, but it has not been implemented.
Eligibility Standards by Group
Title XIX Clients
State Only Clients
Current Population Statistics ( As of May 28, 1993)
Adult SMI - Title XIX
Adult SMI - Non- Title XIX
Non- SMI Adult Mental Health
Children's Behavioral Health Title XIX
Children's Behavioral Health Non- Title XIX
Alcohol Abuse
Drug Abuse
Domestic Violence
Undefined
Prevention
Same as AHCCCS
Some Sliding Fee Scales, Otherwise None
Total Estimated Behavioral Health Clients 74.815
The population figures shown above were reported to the Joint Ad Hoc Committee on Behavioral Health
Services by the Department of Health Services. There is no explanation of " Undefined", and the
Prevention client count is very low. The latter may be the result of counting only enrolled clients which
would not include the vast majority of prevention services. By definition, prevention services are usually
provided to people who are not yet receiving other behavioral health services.
Figure 1 on the following page illustrates the distribution of behavioral health clients; while Figure 2 shows
the average income of behavioral health clients.
Interim Committee on Statutory Funding Formulas 2 6
Figure 1
Total Client Distributions
by Program
ChildnnTitleXIx
CXildren Non XIX
SMI Title XM Domutic Vilmce
Alcohol Abwe
20.7%
ab. tCapcudhhyl8.1993
Figure 2
Total Client Distributions
by Income Level
5134.999 No Income
$ 10,000-$ 14,999
14.4%
Aa ofM. y28,1991
Benefits/ Services
The services provided vary greatly based on the divergent needs of the various population groups. The
Children's Behavioral Health ( CBH) program provides a wide range of services to include residential,
group homes, partial care, hospitalization, outpatient treatment and crisis intervention. Common diagnoses
include conduct disorder, substance abuse, attention deficit disorder, sexual andlor physical abuse
offenderlvictim treatment needs, and a wide range of other conditions. Due to funding levels, at least one
RBHA no longer provides residential treatment or hospitalization to children that are not Title- XIX, SEHC,
or in immediate crisis. The SEHC clients require residential behavioral health and education services.
Interim Committee on Statutory Funding Fomulas 2 7
The Adult SMI population also receive a wide variety of services. However, their needs are significantly
different. The common diagnoses are schizophrenia and bipolar condition ( manic- depressive), with a much
smaller number of psychosis, organic brain syndrome and other disorders. The SMI population by
definition tends to have long term problems and needs.
The general mental health adult population receives, on balance, a more focused and acute set of services
based upon individual needs. Some common treatment needs include alcohol and substance abuse, domestic
violence, clinical depression and crisis intervention.
The services for the adult SMI population are capitated at a level of $ 589 per month per client, and
the CBH Title XM population is currently capitated at $ 483 per month per client. The CBH Title
XIX capitated rate has been submitted for change to the Health Care Financing Administration ( HCFA).
If approved, the rate would increase to between $ 580 to $ 600 per month per client. The other client
groups are not capitated, however, individual RBHA's operate under their own specific guidelines based
on the availability of funds and clients to be served.
Mandatory vs. Optional
Eligibility - The Title XM clients are required to be sewed due to the state's participation in the
Medicaid program through AHCCCS. For determining Title XIX client eligibility the CRS program
must use exactly the same eligibility requirements as AHCCCS. All non- Title XIX, or state- only, clients
would normally be served at the discretion of the state. However, the Legislature has enacted state
statutes which have been interpreted by the courts in certain circumstances as creating a fonn of
eligibility entitlement. The specific cases are: 1) seriously emotionally handicapped children ( SEHC);
2) adult SMI clients in Maricopa County; and 3) as yet to be litigated client groups.
The clearest case of non- specific legal entitlement to treatment is a result of the Hodges vs. Bishop case.
The plaintiffs argued that the state constitution requires the state to provide educational services to children.
Therefore, if a child is unable to attend school due to being seriously emotionally handicapped, the state
must provide the child with educational services in a residential behavioral health facility intended for that
purpose. For this reason, the state must serve SEHC clients whether they are Title XIX or not.
The courts have also interpreted A. R. S. $ 35- 550 et. seq. as creating another entitlement to behavioral
health services. The statute states that the Department of Health Services shall provide a continuum of care
to all SMI individuals, using a community based system of treatment. In the case commonly known as the
Arnold vs. Sam lawsuit, DHS and Maricopa County were sued for not providing a continuum of services
and for failing to serve all potential clients. Over the last several years, the state has been forced by the
courts to dramatically increase total funding, services provided, and the number of clients served. This
lawsuit has established adult SMI clients as an entitlement group that must be served regardless of whether
they are Title XIX eligible or not. As a result, DHS must treat both Title XIX and subvention adult SMI
clients that present themselves for services.
Similar cases may occur in the future. Funding has tended to flow in response to lawsuits, which has in
turn encouraged even more lawsuits. Currently, plaintiffs are refemng to the Jason K. vs. Alethea
Caldwell case as the " Arnold vs. Sam for children". In addition, the Arnold vs. Sam case may be refiled
as a statewide class action suit, to include the entire state. To the extent that these cases continue to create
new classes of entitlement, the state- only population will become much less flexible.
Services - Since the state has chosen to participate in the Title XM program, Title XM clients must
receive certain " mandatory" services. In addition to these mandatory services, there are a wide
variety of optional services. The state submits to the federal Health Care Financing Administration
( HCFA) in its statewide plan those optional services it wishes to include. Once approved, those services
must be provided, unless a subsequent revision is submitted and approved to remove the optional coverage.
The list of mandatory and optional services is quite lengthy and detailed. The state's submission is
available from the AHCCCS program on specific request.
Interim Committee on Statutory Funding Formulas 28
In addition to Title XIX mandatory and optional services, several common services are not covered by Title
XIX. Examples of this are room and board, and " inmates in a public institution". These services are paid
for from subvention ( 100% state) funding, from federal mental health block grants, or from other funding
sources. All subvention client services are, in theory, optional and at the discretion of the state. However,
certain statutes which have been passed, and lawsuits that have been decided, have created court- ordered
entitlements. Examples are the continuum of care for SMI's due to Arnold vs. Sam and residential
education services for SEHC children due to Hodges vs. Bishop.
Interim Committee on Statutory Funding Formulas I 2 9
AGENCY: Department of Health Services ( DHS)
PROGRAM: Children's Rehabilitative Services ( CRS)
Statutory Citation: A. R. S. $ 36- 261, Title XIX of the Social Security Act
Program Description
Provides multi- disciplinary team medical services to children with seriously debilitating or life threatening
conditions which can be corrected or significantly improved through a course of treatments. Types of
qualifying conditions include spina bifida, cleft lip palate, heart malformations, and reversible crippling
birth defects. The program was originally referred to as Crippled Children's Services when the state was
operating a Crippled Children's Hospital. The program was later part of AHCCCS and was then
transferred to DHS in FY 1992.
N 1994 Funding
CRS - State Only ( Non- Title XIX)
CRS - Title XIX State Match
Federal Title XIX Funds
State Administrative Costs
Total CRS Program
Overview of CRS Eligibility
CRS is available to two general categories of individuals: 1) Federal Title MX eligibility groups; and
2) state- only groups. The eligibility for Title XIX coverage is identical to that described for the AHCCCS
program. In addition to those requirements, the potential client must also have a qualifying condition which
is covered under CRS. State- only, or subvention, clients are sewed on a space available basis. It is
not clear what eligibility standards, if any, are used for the subvention population. There are no
requirements for state residency, and there is some evidence that this may attract clients from other states
which do not offer similar services.
Eligibility Standards by Group
Title XIX Clients Same as AHCCCS
State Only ( Non- Title XIX) Clients None
Current Population Statistics ( As of May 1993)
Title XIX Clients
State Only ( Non- Title XIX) Clients
Total CRS Clients
BeneJits/ Services
The CRS program provides a multidisciplinary approach for the treatment of serious childhood disabling
conditions. An example of this is a client with cleft lip palate which may receive the following: a) several
corrective operations; b) care from an Ear, Nose, Throat Specialist; c) training from a Speech Pathologist;
d) facial reconstructive surgery; and e) follow- up care. Under CRS, proactive on- going care is provided
which will usually avoid or reduce future attendant medical complications. Under a standard AHCCCS
health plan, preventive care is also provided, but the individual would receive a less intensive level of care,
because it would not use the multidisciplinary team approach. This continuum of care in CRS is therefore
a more expensive treatment mode, but is considered more effective for the severe conditions covered by
CRS. That is the primary basis for operating a separate program for these specific childhood conditions.
Allowable services are defined by rule, not by statute. Over time, DHS had authorized more and more
services, until FY 1993, when these services were significantly reduced. This reduction eliminated
oncology ( childhood cancer), most physical deformities that are nondisabling, most intestinal and
reproductive defects, and several secondary conditions present in a child with a qualifying condition.
Interim Committee on Statutory Funding Formulas 30
The CRS program expends the majority of its funding on fixed contracts with hospitals, doctors, clinics
and suppliers of prosthetic devices. There is also a smaller fee- for- services component. The largest single
contract was originally bid at $ 1, and has risen to around $ 10 million in the last three years. This is
largely a result of the current contract more accurately reflecting actual expenses.
Mandatory vs. Optional
Eligibility - The Title XM clients are required to be served due to the state's participation in the
Medicaid program through AHCCCS. For determining Title XIX client eligibility, the CRS program
must use exactly the same eligibility requirements as AHCCCS. All non- Title XIX, or state- only, clients
are served solely at the discretion of the state.
Benefits/ Services - The CRS program treatment modality is optional. However, it is important to point
out that if CRS were eliminated, most of the Title XIX clients would receive care for their conditions
through the AHCCCS program, at a reduced cost. The CRS program is viewed as one of the more
comprehensive specialized children's health care programs in the country. In the long run, it is unclear
whether the reduction in the severity of the clients' conditions outweighs the additional cost of the CRS
mode of care, however, it is clear that the prognosis of the clients is considerably improved.
Interim Committee on Statutory Funding Formulas
3 1