Testimony by the Honorable James D. Bruner, President County Supervisors Association Chairman, Board of Supervisors Maricopa County, before the Joint AHCCCS Ad Hoc Committee

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TESTIMONY BY
THE HONORABLE JAMES D. BRUNER
PRESIDENT
COUNTY SUPERVISORS ASSOCIATION
CHAIRMAN, BOARD OF SUPERVISORS
MARICOPA COUNTY
BEFORE THE
JOINT AHCCCS AD HOC COMMITTEE
JANUARY 21, 1993
TESTIMONY BY
THE HONORABLE JAMES D. BRUNER
PRESIDENT
COUNTY SUPERVISORS ASSOCIATION
CHAIRMAN, BOARD OF SUPERVISORS
MARICOPA COUNTY
BEFORE THE
JOINT AHCCCS AD HOC COMMITTEE
JANUARY 21, 1993
TESTIMONY BY THE HONORABLE JAMES D. BRUNER, PRESIDENT, COUNTY
SUPERVISORS ASSOCIATION OF ARIZONA, AND CHAIRMAN, BOARD OF
SUPERVISORS, MARICOPA COUNTY, BEFORE THE JOINT AD HOC COMMITTEE ON
AHCCCS, THURSDAY, JANUARY 21,1993.
IT IS MY PLEASURE TO TESTIFY THIS EVENING IN MY CAPACITY AS CHAIRMAN
OF THE MARICOPA COUNTY BOARD OF SUPERVISORS, AND AS PRESIDENT OF
THE COUNTY SUPERVISORS ASSOCIATION. BOTH MARICOPA COUNTY AND THE
COUNTY SUPERVISORS ASSOCIATION, REPRESENTING ALL OF ARIZONA'S
FIFTEEN COUNTIES, ARE EXTREMELY CONCERNED WITH STATE BUDGET
PROPOSALS IN THE AREA OF HEALTH CARE AND THEIR ENORMOUS POTENTIAL
IMPACT ON ARIZONA COUNTIES. MY PRESENTATION WlLL BE THE ONE AND
ONLY COMPREHENSIVE PRESENTATION ON BEHALF OF ALL OF ARIZONA'S
COUNTIES AT THIS HEARING.
IN HIS STATE- OF- THE- STATE MESSAGE, GOVERNOR SYMINGTON SAID:
" IN 1993, WE MUST CONTINUE TO SEND WASHINGTON SOME OTHER
SIGNALS OF FIERCE WESTERN INDEPENDENCE. WE WlLL CONTINUE TO
PRESS OUR CASE THAT MANDATES FROM THE FEDERAL GOVERNMENT
HAVE STRIPPED US OF OUR FISCAL SOVEREIGNTY. AND IN DOING SO
THEY HAVE STRIPPED THE PEOPLE OF THEIR RIGHT TO REPRESENTATIVE
GOVERNMENT AT THE STATE LEVEL, WHERE REPRESENTATIVE
GOVERNMENT IS MOST IMPORTANT. WE WlLL CHALLENGETHESE FEDERAL
MANDATES UNDER THE TENTH AMENDMENT AND WE WlLL DEFEND THE
CONSTITUTIONAL RIGHT OF THIS STATE TO SELF- DETERMINATION."
MOST MEMBERS OF THE LEGISLATURE APPLAUDED THOSE WORDS. YET IN
RECENT DAYS, THERE HAVE BEEN INDICATIONS THAT SOME MEMBERS OF THIS
LEGISLATURE ARE POISED TO PASS THE LARGEST UNFUNDED MANDATE UPON
COUNTIES IN ARIZONA HISTORY. TONIGHT, I ASK THAT YOU STOP AND
EXAMINE MORE CAREFULLY THE CONSEQUENCES OF THAT PROSPECTIVE
ACTION.
THERE ARE NOW TWO MAJOR PROPOSALS ON THE TABLE. ATTACHMENT 1 IS
A CHART THAT SUMMARIZES THE IMPACT ON MARICOPA COUNTY OF THOSE
TWO PROPOSALS. ATTACHMENT 2 SUMMARIZES THE IMPACT ON ALL 15
COUNTIES OF THE OVER $ 44 MILLION IN JLBC - PROPOSED CONTRIBUTION
INCREASES FOR ACUTE CARE AND LONG TERM CARE. I WOULD LIKE TO
COMPLIMENT GOVERNOR SYMlNGTON ON HIS STAND THAT SHIFTING COSTS TO
LOCAL GOVERNMENT DOES NOT SOLVE PROBLEMS.
WHILE MANY OF YOU AND MANY OF US ARE CONCERNED ABOUT THE PROSPECT
OF DISCONTINUING COVERAGE FOR THE MEDICALLY NEEDY/ MEDICALLY
INDIGENT POPULATION, HIS PROPOSAL DOES NOT SHIFT COSTS TO COUNTY
GOVERNMENT AND RECOGNIZES THAT WHETHER THE EXPENSE RESTS WITH THE
STATE OR THE COUNTY - THE SAME TAXPAYERS BEAR THE BURDEN.
UNFORTUNATELY, WE CANNOT FIND ANYTHING POSITIVE TO SAY ABOUT THE
JLBC STAFF PROPOSAL. IN FACT, THE JLBC STAFF PROPOSAL MAY BE THE
SINGLE MOST DAMAGING FISCAL PROPOSAL EVER INTRODUCED AS FAR AS
2
ARIZONA'S COUNTIES ARE CONCERNED. IN CONTRAST TO THE TRUTH IN
BUDGETING PRINCIPLES ADHERED TO BY THE GOVERNOR IN ADDRESSING THE
MAJOR ISSUES IN HEALTH CARE, THE JLBC PROPOSAL RESORTS TO THE OLDEST
TRICK IN THE BOOK - SHIFTING COSTS TO THE LOWER LEVEL OF GOVERNMENT.
THlS APPROACH IS EXACTLY WHAT GOVERNOR SYMINGTON AND MANY
MEMBERS OF THlS LEGISLATURE HAVE OPPOSED. THlS APPROACH DOES NOT
SOLVE THE PROBLEM, IT ONLY PASSES THE PROBLEM ON TO THE COUNTIES.
PLEASE UNDERSTAND THlS SIMPLE FACT - NEITHER MARICOPA COUNTY NOR
ANY OF ARIZONA'S COUNTIES HAVE THE ABILITY TO WITHSTAND THE COST-SHIFTING
THAT IS PROPOSED IN THE JLBC STAFF PROPOSAL, AND WE
VIGOROUSLY OPPOSE IT OR ANYTHING SIMILAR TO IT. PLEASE ALSO
UNDERSTAND THAT THERE ARE SERIOUS CONSEQUENCES ASSOCIATED WlTH
SUCH COST- SHIFTING, AS WE WILL IDENTIFY TONIGHT AND IN THE DAYS AHEAD.
AS I WILL OUTLINE FOR YOU TONIGHT, THlS IS NOT A MAlTER OF SELFISH
PROTECTION OF COUNTY RESOURCES. IT IS MATTER OF FINANCIAL SURVIVAL.
TONIGHT, I WOULD LIKE TO REVIEW WlTH THlS AUDIENCE THE SCOPE OF THE
COUNTY ROLE IN HEALTH CARE. THAT ROLE ENCOMPASSES MUCH MORE THAN
JUST THE COUNTY CONTRIBUTION TO THE ACUTE CARE AND LONG TERM CARE
PROGRAMS OF AHCCCS.
SECOND, I WOULD LIKE TO REVIEW WlTH YOU THE COUNTY FINANCIAL
STRUCTURE AND ITS CURRENT FINANCIAL CONDITION. AS I WILL OUTLINE FOR
YOU, THAT CONDITION CURRENTLY IS MOST UNFAVORABLE, PARTICULARLY IN
THE HEALTH CARE AREA.
THIRD, I WOULD LIKE TO DISCUSS AND REVIEW WlTH YOU THE IMPACT OF THE
TWO BUDGET PROPOSALS ON THE TABLE.
FINALLY, I WOULD LIKE TO RAISE SEVERAL ISSUES THAT I BELIEVE MERIT THE
CONSIDERATION OF THIS GROUP IN CRAFTING A SOLUTION. LET ME ASSURE
YOU THAT MARICOPA COUNTY, WHILE IT IS MOST STRONGLY OPPOSED TO THE
JLBC PROPOSAL, IS COMMITTED TO PLAYING A CONSTRUCTIVE ROLE IN THESE
DISCUSSIONS AND WISHES TO BE A PART OF THE SOLUTION, AS WE VIEW THE
COUNTY TO HAVE A CONTINUING ROLE AS A REGIONAL LEADER IN THE AREA OF
HEALTH CARE.
COUNTY ROLE IN HEALTH CARE
IN THE LATE 1 970tS, COUNTIES WERE THE SOLE PUBLIC PROVIDERS OF CARE TO
THE INDIGENT SICK IN ARIZONA. COUNTIES WERE EXPERIENCING SEVERE
FINANCIAL DISTRESS, AND ARIZONA TAXPAYERS WERE NOT RECEIVING THEIR
SHARE OF AVAILABLE FEDERAL DOLLARS.
FOR THESE REASONS, AND IN RESPONSE TO FEDERAL MANDATES, ARIZONA
CREATED AHCCCS IN 1981 AS AN EXPERIMENTAL ALTERNATIVE SYSTEM TO
MEDICAID.
COUNTIES PAY AN ANNUAL CONTRIBUTION ESTABLISHED BY THE LEGISLATURE
TO THE ACUTE CARE PROGRAM OF AHCCCS, AND COUNTIES PAY 100 PERCENT
OF THE NON- FEDERAL PORTION OF THE PROGRAM COST FOR THE LONG TERM
CARE PROGRAM. SOME OF YOU MAY BE UNDER THE IMPRESSION THAT THIS IS
WHERE THE COUNTY ROLE IN HEALTH CARE NOW BEGINS AND ENDS.
IN FACT, THE COUNTY ROLE IN HEALTH CARE IS MUCH BROADER THAN THAT.
HEALTH CARE ACCOUNTS FOR 42 PERCENT OF MARICOPA COUNTY'S BUDGET
AND OUR CONTRIBUTIONS TO THE ACUTE CARE AND LONG TERM CARE
PROGRAMS OF AHCCCS ARE ONLY TWO COMPONENTS OF WHAT MARICOPA
COUNTY EXPENDS ON HEALTH CARE OVERALL.
THESE EXPENDITURES ARISE FROM A VARIETY OF PROGRAMS AND AREAS OF
LIABILITY. OF PARTICULAR NOTE IS THAT WE OPERATE WHAT IS BY FAR THE
LARGER OF THE STATE'S ONLY TWO REMAINING COUNTY- OPERATED HOSPITALS.
AlTACHMENT 3 IS A CHART THAT DETAILS OUR ACTUAL EXPENDITURES IN
THESE AREAS FOR THE LAST FISCAL YEAR AND PROJECTED EXPENDITURES FOR
THE CURRENT FISCAL YEAR. AS YOU CAN SEE, THE HEALTH CARE
RESPONSIBILITIES OF THE COUNTY ARE QUITE BROAD AND INVOLVE A
SUBSTANTIAL PORTION OF OUR COUNTY BUDGET.
AHCCCS DID NOT FULLY ASSUME RESPONSIBILITY FOR ALL POPULATION GROUPS
AND TYPES OF SERVICES THAT THE COUNN WAS SERVING PRIOR TO 1981. IN
FACT, AS A PART OF THE AHCCCS LEGISLATION, COUNTIES WERE LEFT WlTH A
" MAINTENANCE OF EFFORT" STANDARD FOR PROVIDING HEALTH CARE TO
INDIVIDUALS. UNDER THlS STANDARD, COUNTIES MUST CONTINUE TO PROVIDE,
OR " MAINTAIN ITS EFFORT", WlTH RESPECT TO BOTH THOSE POPULATION
GROUPS, AND THE ARRAY OF COUNTY SERVICES, THAT EXISTED AT THE TIME
AHCCCS WAS CREATED.
IN OTHER WORDS, IF AN INDIVIDUAL WAS ELIGIBLE FOR COUNN HEALTH CARE
COVERAGE OR A TYPE OF SERVICE WAS PROVIDED BY THE COUNTY UNDER THE
LAWS, RULES AND REGULATIONS THAT EXISTED IN 1981, AND AHCCCS DOES
NOT TODAY COVER THAT INDIVIDUAL OR PROVIDE THAT SERVICE, THEN THE
COUNN IS REQUIRED TO PAY THAT COST. THlS EXPENSE, WHICH CONSTITUTES
OUR MAINTENANCE OF EFFORT OR RESIDUAL LIABILITY OBLIGATION, IS IN THE
MANY MILLIONS OF DOLLARS EACH YEAR.
1 ATTACHMENT 4 CONTAINS A BRIEF EXPLANATION OF THE VARIOUS TYPES OF
I RESIDUAL LIABILITY AND SUMMARIES OF THE STATUTES GOVERNING SUCH
LIABILITY. ATTACHMENT 5 SETS FORTH RESIDUAL LIABILITY AND ELIGIBILITY
DETERMINATION COSTS FOR ALL 15 COUNTIES. OBVIOUSLY, OUR RESIDUAL
HEALTH CARE OBLIGATIONS REMAIN QUITE SIGNIFICANT OUTSIDE OF AHCCCS.
PART OF THE JLBC PROPOSAL IS TO INCREASE THE COUNTY CONTRIBUTION TO
THE ACUTE CARE PROGRAM TO RAISE THE LEVEL OF OUR FINANCIAL
PARTICIPATION TO ONE THIRD OF TOTAL STATE- COUNTY COSTS, WHICH IS
WHAT JLBC INDICATES IT WAS IN THE EARLY YEARS OF THE AHCCCS PROGRAM.
WE BELIEVE THIS ANALYSIS TO BE FLAWED FOR TWO REASONS. FIRST, THIS
ANALYSIS DOES NOT TAKE INTO ACCOUNT THE FULL RANGE OF THE COUNTY'S
COMMITMENT TO HEALTH CARE SPENDING - IT ONLY LOOKS IN ISOLATION AT
THE ACUTE CARE CONTRIBUTION. ALTHOUGH LEGISLATIVE HISTORY IS
FREQUENTLY LACKING, WE BELIEVE THAT THE INTENT OF THE LEGISLATURE
WHEN AHCCCS WAS CREATED WAS TO FIX THE COUNTY CONTRIBUTION AT A
SET AMOUNT IN EXCHANGE FOR THE COUNTY RETAINING RESIDUAL
RESPONSIBILITY. THE JLBC PROPOSAL PROPOSES TO UNCAP THE COUNTY
CONTRIBUTION AND TO SET IT AT A PERCENTAGE EACH YEAR WITHOUT
RELIEVING THE COUNTIES OF RESIDUAL RESPONSIBILITY.
IF THE JLBC PROPOSAL IS TO BE SERIOUSLY CONSIDERED, THEN ELIMINATION
OF RESIDUAL LIABILITY FOR COUNTIES DESERVES EQUALLY SERIOUS
CONSIDERATION. THESE TWO ISSUES GO HAND IN HAND. RESIDUAL LIABILITY
IS, IN FACT, THE FIRST MAJOR ISSUE WE WOULD IDENTIFY FOR THIS COMMITTEE
TO CONSIDER IN ADDITION TO THE OSPB AND JLBC PROPOSALS.
THE SECOND REASON WHY THE JLBC ANALYSIS IS FLAWED IS THAT IT FAILS TO
TAKE INTO ACCOUNT THE CAPACITY OF COUNTIES TO GENERATE REVENUE. AS
I WILL OUTLINE FOR YOU IN A MOMENT, MOST COUNTIES HAVE NO ABILITY TO
DO SO. THUS, THE STATE AND THE COUNTIES ARE NOT IN PARALLEL POSITIONS
WHEN IT COMES TO ABSORBING COST INCREASES. IF THE STATE, WlTH ITS
GREATER FLEXIBILITY TO ABSORB COSTS, HAS CONCLUDED IT CANNOT AFFORD
ANY MORE MONEY FOR AHCCCS - IT SHOULD NOT SEEK TO PAY FOR INCREASES
WlTH REVENUE FROM COUNTIES WHICH HAVE ESSENTIALLY NO FLEXIBILITY AS
FAR AS REVENUE IS CONCERNED. WHATEVER IT IS THAT THE STATE CANNOT
AFFORD - THE COUNTIES CANNOT AFFORD EITHER.
COUNTY FINANCIAL STRUCTURE AND CONDITION
NOW, I WOULD LIKE TO SAY A FEW WORDS ABOUT MARICOPA COUNTY'S
FINANCIAL STRUCTURE AND CONDITION. MARICOPA COUNTY GOVERNMENT IS
FINANCED PRIMARILY BY PROPERTY TAXES, SALES TAXES, FEES AND CHARGES,
AND OTHER NON- TAX SOURCES OF REVENUE SUCH AS GRANTS. THE TWO
MAJOR VARIABLES IN THIS MIX ARE PROPERTY TAXES AND SALES TAXES. THE
FINANCIAL STRUCTURE OF ALL 15 COUNTIES IS ESSENTIALLY THE SAME.
AJTACHED AS AITACHMENT 6 ARE TWO CHARTS OUTLINING THE CATEGORIES
OF REVENUES AND EXPENDITURES FOR MARICOPA COUNTY FOR THE CURRENT
FISCAL YEAR. MARICOPA COUNTY'S ONLY SOURCE OF SALES TAX REVENUE IS
ITS PORTION OF THE SALES TAX REVENUE SHARED BY THE STATE OF ARIZONA
WlTH COUNTIES. MARICOPA COUNTY DOES NOT HAVE ANY AUTHORITY FOR A
8
COUNTYWIDE SALES TAX. WHILE OTHER COUNTIES DO HAVE THlS AUTHORITY,
THE MOOD OF THE ELECTORATE IS CLEARLY IN OPPOSITION TO TAX INCREASES
OF THlS NATURE.
IN THE AREA OF PROPERTY TAXES, COUNTIES ARE GOVERNED BY THE 1980
VOTER APPROVED CONSTITUTIONAL LEVY AND EXPENDITURE LIMITS. OUR
TOTAL LEVY FOR PROPERTY TAX PURPOSES MAY NOT INCREASE IN ANY GIVEN
YEAR BY MORE THAN THE SUM OF 2 PERCENT OF THE PRIOR YEAR'S LEVY PLUS
NEW CONSTRUCTION. MARICOPA COUNTY DOES NOT OBJECT TO OR OPPOSE
THlS LEVY LIMITATION, BUT WE MUST POINT OUT TO YOU THAT THE EXISTENCE
OF THE LEVY LIMITATION PREVENTS MARICOPA COUNTY FROM RAISING THE
PROPERTY TAX LEVY IN ORDER TO RAISE REVENUE TO PAY FOR PROGRAMS.
THlS IS ALSO TRUE FOR MOST OF THE OTHER COUNTIES. AlTACHMENT 7
OUTLINES THE CURRENT TAX RATES AND RATE LIMITS FOR ALL 15 COUNTIES.
IT ALSO IDENTIFIES WHAT THE JLBC PROPOSAL WOULD MEAN IN TERMS OF TAX
RATE INCREASES IF IT WERE POSSIBLE FOR COUNTIES TO PASS THEIR INCREASES
ON TO PROPERTY TAX PAYERS.
HOWEVER, MARICOPA COUNTY AND MOST OF THE OTHER COUNTIES DO NOT
HAVE THE ABILITY TO INCREASE PROPERTY TAXES OR SALES TAXES, OR ANY
OTHER TAXES, TO RAISE REVENUE TO PAY FOR ADDITIONAL COSTS PASSED ON
BY THE LEGISLATURE IN THE AREA OF AHCCCS, OR ANY OTHER AREA. WE
CERTAINLY HAVE NO WAY OF RAISING THE REVENUE TO ABSORB THE TYPES OF
9
INCREASES THAT ARE PROPOSED BY JLBC. EVEN IF JLBC'S REVENUE ESTIMATES
ARE CORRECT, OUR SHARE OF THE ADDITIONAL SHARED SALES TAX REVENUE
WHICH MARICOPA COUNTY WOULD RECEIVE NEXT YEAR WOULD PAY FOR LESS
THAN HALF OF THE COST SHIFTS THAT ARE PROPOSED UNDER THE JLBC
PROPOSAL.
MANDATING THAT ALL NEW REVENUES PAY FOR HEALTH CARE ALSO LEAVES US
WITH ABSOLUTELY NO NEW REVENUE TO DEAL WITH OTHER PROGRAMS WHERE
WE ARE EXPERIENCING INCREASES DUE TO INFLATION IN COSTS, GROWTH IN
SERVICE DEMANDS, OR BOTH. OUR JAILS WOULD BE AN EXAMPLE OF SUCH AN
AREA. OUR JAIL EXPENSE IN 1983 WAS EQUAL TO $ 1 7.8 MILLION - THAT
AMOUNT HAS MUSHROOMED 267% TO THE CURRENT YEAR LEVEL OF $ 47.5
MILLION. NEW REVENUES ARE NEEDED TO COPE IN MANY CRITICAL AREAS OF
COUNTY RESPONSIBILITY BESIDES HEALTH CARE.
ON THE EXPENDITURE SIDE, OUR CURRENT FINANCIAL SITUATION IS MOST
UNFAVORABLE. MARICOPA COUNTY HEALTH CARE CARRIED INTO THE CURRENT
FISCAL YEAR A NEGATIVE BALANCE OF APPROXIMATELY $ 1 5 MILLION DOLLARS.
THIS NEGATIVE BALANCE RESULTED PRIMARILY FROM THE EVER GROWING
AMOUNT OF UNCOMPENSATED CARE PROVIDED BY THE COUNTY HOSPITAL AND
AMBULATORY CARE CLINICS.
YESTERDAY MORNING, THE BOARD OF SUPERVISORS RECEIVED A REPORT FROM
A MANAGEMENT COUNCIL THAT HAS BEEN APPOINTED TO OVERSEE VARIOUS
ACTIVITIES IN THE HEALTH CARE AREA WHERE COSTS ARE SIGNIFICANTLY
EXCEEDING BUDGETED AMOUNTS. THE REPORT WE RECEIVED FROM THE
MANAGEMENT COUNCIL INDICATES THAT MARICOPA COUNTY HEALTH CARE
CAN EXPECT TO END THE YEAR WlTH A NEGATIVE BALANCE OF APPROXIMATELY
$ 30 MILLION DOLLARS.
IMPACT OF JLBC PROPOSAL
AS WE LOOK AT THE JLBC PROPOSAL, OUR EXISTING $ 30 MILLION PROBLEM
WOULD BE INCREASED BY AT LEAST $ 31 MILLION DOLLARS IN NEW STATE
MANDATED COSTS, INCLUDING A $ 20 MILLION DOLLAR INCREASE IN THE
COUNTY ACUTE CARE CONTRIBUTION, AN OVER $ 5 MILLION DOLLAR INCREASE
IN THE COUNTY LONG TERM CARE CONTRIBUTION, AND A $ 6 MILLION DOLLAR
INCREASE IN UNCOMPENSATED CARE PROVIDED BY MARICOPA MEDICAL CENTER
AND COUNTY CLINICS FOR UNCOMPENSATED CARE THAT WOULD ARISE FROM
THE FACT THAT UNDOCUMENTED ALIENS WOULD NO LONGER BE COVERED FOR
OTHER THAN EMERGENCY SERVICES, AND CUTS IN SOBRA COVERAGE FOR
PREGNANT WOMEN AND CHILDREN.
TO SUMMARIZE, TAKING OUR EXISTING PROBLEM AND ADDING TO IT THE JLBC
PROPOSAL LEAVES US WlTH A $ 60 MILLION DOLLAR PROBLEM IN THE HEALTH
CARE AREA THAT WE HAVE ABSOLUTELY NO REVENUE TO COVER. THIS
SITUATION WlLL HAVE DEVASTATING CONSEQUENCES FOR MARICOPA COUNTY
GOVERNMENT AND CITIZENS. THESE DEVESTATING CONSEQUENCES WILL BE
RELFECTED ACROSS THE ENTIRE SPECTRUM OF COUNTY SERVICES, INCLUDING
COURTS, LAW ENFORCEMENT, JAILS, ELECTIONS, SOCIAL SERVICES, ASSESSOR,
RECORDER, PUBLIC DEFENDER, MEDICAL EXAMINER, PARKS AND RECREATION
AND MANY OTHER AREAS. ALL ARIZONA COUNTIES WlLL SUFFER SIMILAR
CONSEQUENCES.
WE HAVE NO ALTERNATIVE BUT TO OPPOSE THE JLBC STAFF PROPOSAL. THlS
PROPOSAL DOES NOT ADDRESS THE PROBLEM - IT ONLY SHIFTS THE PROBLEM
TO OTHER LEVELS OF GOVERNMENT AND WlLL CREATE SEVERE PROBLEMS FOR
LOCAL CITIZENS ON MANY OTHER ISSUES.
ISSUES TO BE ADDRESSED
THEREFORE, WE URGE THAT THlS AD- HOC GROUP SEEK REAL SOLUTIONS TO THE
PROBLEM AND AVOID THE TEMPTATION TO SOLVE IT AT THE EXPENSE OF LOCAL
TAXPAYERS BY SHIFTING COSTS TO COUNTY GOVERNMENT. GIVEN THE
PRESENT ADVERSE FINANCIAL CONDITION OF THE COUNTIES, THE IMPACT OF
THESE SOLUTIONS SHOULD BE NO WORSE THAN REVENUE NEUTRAL TO THE
COUNTIES. AMONG THE ISSUES WE BELIEVE YOU SHOULD ADDRESS IN THlS
REGARD IS THE ELIMINATION OF COUNTY RESIDUAL RESPONSIBILITY.
TO THE EXTENT THAT THE STATE HAS CONCLUDED THAT INDIGENT HEALTH
CARE CAN BE PROVIDED ONLY TO CERTAIN POPULATION GROUPS, AND THAT
ONLY CERTAIN SERVICES CAN BE PROVIDED, IT MAKES NO SENSE TO HAVE A
SEPARATE DEFINITION OF INDIGENCY OR SEPARATE MANDATED ARRAY OF
SERVICES IN EACH COUNTY BASED ON CIRCUMSTANCES THAT EXISTED TWELVE
OR MORE YEARS AGO. IT IS TIME TO HAVE A STATEWIDE UNIFORM STANDARD
FOR INDIGENCY AND SERVICES AND TO ELIMINATE COSTLY RESIDUAL
RESPONSIBILITY THAT OUR TAXPAYERS SIMPLY CAN NO LONGER AFFORD.
I SHARE THE CONCERN OF MANY OF YOU ABOUT DISCONTINUING COVERAGE
FOR THE MNIMI POPULATION. AS AN ALTERNATIVE TO EITHER DROPPING THAT
POPULATION AS CALLED FOR IN THE EXECUTIVE PROPOSAL OR KEEPING THAT
POPULATION AS CALLED FOR IN THE JLBC PROPOSAL, THIS AD- HOC GROUP
SHOULD LOOK AT THE MIDDLE GROUND IN WHICH PERHAPS SOME OF THE RULES
AND STANDARDS OF THE EXISTING MNIMI PROGRAM COULD BE MODIFIED TO
REDUCE COSTS WHILE PROVIDING CARE TO THOSE WHO MOST DESPERATELY
NEED IT. AMONG THE ASPECTS THAT MAY REQUIRE EXPLORATION ARE:
THE LENGTH OF THE PERIOD OF ELIGIBILITY.
AUTOMATIC COVERAGE OF ALL FAMILY MEMBERS.
ASSET STANDARDS FOR ELIGIBILITY.
CO- PAYMENTS AND DEDUCTIBLES.
THE ARRAY OF SERVICES - SO LONG AS ANY LIMITATIONS ON SERVICES
ARE MIRRORED IN THE COUNTY'S MAINTENANCE OF EFFORT.
FINALLY, THE CURRENT SYSTEM FOR ELIGIBILITY DETERMINATION NEEDS TO BE
ASSESSED. MARICOPA COUNTY AND ALL 15 COUNTIES ARE PREPARED TO
ADDRESS ALTERNATIVES TO THE CURRENT ELIGIBILITY DETERMINATION
SYSTEM.
' THANK YOU FOR HEARING MY TESTIMONY ON BEHALF OF ARIZONA'S 15
COUNTIES. AS CHAIRMAN OF THE MARICOPA COUNTY BOARD OF SUPERVISORS
AND PRESIDENT OF THE COUNTY SUPERVISORS ASSOCIATION, I ASSURE YOU
WE WlLL FULLY PARTICIPATE IN THESE DISCUSSIONS WITH ALL INTERESTED
PARTIES TO SEEK RESOLUTION. THAT RESOLUTION, HOWEVER, MUST BE
SENSITIVE TO THE CONSIDERABLE RESOURCE LIMITATIONS OF THE COUNTIES.
I WlLL BE HAPPY TO RESPOND TO YOUR QUESTIONS.
Attachment 1
MARICOPA COUNTY - PI 1993- 94
FINANCIAL IMPACT OF OSPB AND JLBC BUDGET PROPOSALS
Joint Leaislative Budaet Committee Pro~ osal
Funding only Emergency Service for 18,000 undocumented aliens, eliminating MN/ MI coverage for
this population.
Estimated impact: < $ 4.4 million >
Note: impact estimate based on Maricopa County's share of the JLBC estimate. ( Maricopa County
will determine concurrence with this estimate when the assumptions made by JLBC in developing
their estimate are known.) Future year impact significantly higher ($ 10.2 million in FY 94- 95), with
multi- year increase undetermined. Uncompensated care provided by Maricopa Medical Center may
increase if private hospitals refuse or transfer patients for whom they are no longer compensated.
' Rdi back' SOBRA coverage for pregnant women and infants from 140% to 133% of Federal
Poverty Level.
Estimated impact: < $ 1.3 million >
Note: Based on JLBC estimate. Actual negative impact may be higher as Maricopa County does
not currently enrdi all potentially eligible women. Indirect costs related to expensive high- risk e
pregnancies/ complicated deliveries are not included in the estimate.
increase County Acute Care Contribution.
Estimated impact: < $ 20 million >
Note: Estimated impact based on JLBC and CSA analysis.
Increase County Long Term Care Contribution.
Estimated impact: < $ 5.5 million >
Note: Estimated impact based on JLBC and CSA analysis.
Net Impact All JLBC Proposals: < $ 31.2 million >
Office of Strategic Plannina and Budaetin- a Pro~ osal
Elimination of full MN/ MI coverage for 35,000 recipients.
Estimated impact: < $ 22.6 million >
Note: lmpact based on increased uncompensated care provided by MMC to acutely Rl/ lnjured
persons and loss of administrative revenue percentage for Maricopa Health Plan. This lmpact is
expected to increase significantly if private hospitals refuse or transfer patients for whom they are
no longer compensated.
Extension of SOBRA to 69,000 pregnant women and children up to 185% of Federal Pwerty Level.
Estimated impact: $ 3.5 million
Note: This is the estimated net benefit from lncrease in revenue. lmpact is based on additional
coverage of only 2% of the population currently being served, d which up to 50% would be
ineligibie based on inability to meet citizenship requirement of SOBRA. ( based on Ambulatory Care
Prenatal Pilot Study data)
Elimination of County Residuality.
Estimated impact: $ 11 million
Note: This is the amount currently spent on payments to outside hospitals for indigent care. This
estimate differs from the Maricopa County data Included in the table developed by CSA for FY 1992
due to large settlements and write- offs made to expedite resolution of the Perez lawsuit and
resulting backlog of daims during that year. It does not lndude the estimated ' tall' for remaining
daims ($ 2.5 million) or chronic conditions ($ 2.3 million).
Elimination of MN/ MI determination.
Estimated impact: $ 7.6 million
Note: This impact is based upon the net cost of all eligibility functions currently performed by the
County. The estimate assumes some eligibility functions will be retained by the County based on
the OSPB statement that ' Hospitals and other providers will probably invest more time making sure
persons whose expenses are potentially reimbursable under Title XIX fill out applications with DES.'
It also assumes these funds will remain with the County as a partial offset to increased costs
resulting from the implementation of other proposal components.
Increase County Long Term Care contribution.
Estimated impact: < $ 5 million >
Net Impact All OSPB Proposals: < $ 5.5 million >
This analysis Is intended as an esafnmfe only since a significant additional increase In uncompensated care
provided by both Maricopa Medical Center and the Ambulatory Care Primary Care Centers couM occur as
a result of the elimination of the MN/ MI program. In addition, as noted in the JLBC analysis, the multi- year
impacts are estimated to increase for many of the proposed changes.
Long Term Care Payments ( ALTCS)
county I ALTCS
Greenlee 0.34% $ 31 3,789 $ 346,739
La Paz 0.34% $ 31 3,789 $ 32,950 1 6346,7a
Maricopa 56.55% $ 52,190,057 $ 5,480,= 11 $ 57,870,438
ACTCS ] ALTCS Payment 1
County
Apache
Cochise
Santa Cruz 1.05% $ 969,151 ' $ 1 01,769
Yavapai 3.12% $ 2,879,453 4302,366 1
Yurna 2.75% $ 2,539,151 $ 266,632 1
Totals: 100.00% $ 92,297,600 $ 9,692,000 1
Percent Increase 5.43% f
OSPB Increase-- $ 101,242,559
Acute Care AHCCCS Payments
Percent
01 Total
0.22%
2.53%
Greenlee
La Paz
Maricopa $ 33,144,215 56.46% $ 37,723,963
Mo have $ 1,218,011 2.07% $ 1,207,812
Pirna $ 1 2,748,275 21.72% $ 1 4,590,061 22.420%
Santa Cruz
Totals: $ 58,707,227 100.00% $ 65,076,099 100.000%
' In 1901, the Legislature increased Pima and Maricopa counties' AHCCCS contribution by $ 6.6 million while keeping other
counites' amount constant The JLBC proposed increase of $ 34.6 million is distributed to all counties according to the revised
percentages and would accentuate Pima and Maricopa's proportional contfibutions in the future.
Payment
FY92- 93
$ 203,064
$ 2,335,924
Wcmase
FY99194
FY 33- 94
{ JlSC)
82%$ 23 f . ,$ 224,3W
$ 245,291 1 $ 2,589.21 5
ATTACHMENT 3
I COUNTY CONTRIBUTION TO AHCCCS ACUTE CARE
Acute Care includes AFDC, SSI,
( MAO, and MNIMI. There is no
federal reimbursement for
I COUNTY CONTRIBUTION TO ALTCS LONG TERM CARE
I Includes elderly and physically disabled. Counties pay 100%
of non- federal share.
LONG TERM CARE RESIDUAL
MARICOPA COUNTY
HEALTH CARE COSTS
FY 1991 - 92 AND 1992193
FY91 192
Actual Costs
FY92193
Projected Costs
8 Costs associated with County
Maintenance of Effort statutes.
1 Counties cannot reduce medical benefits and categories of
services for persons who meet ( county indigent standards
which were in place as of
January 1, 1981. I
I * Includes $ 4.8 million increase over FY90191 enacted by the Legislature.
I HOSPITAL
I Maricopa County Medical
Center is a $ 172.4 million
8 hospital with 106 departments, 194 attending physicians, and
31 1 visiting physicians.
REVENUE
EXPENSE I NET COUNTY COST
AMBULATORY CARE
1 Ambulatory care consists primary care centers providing
direct primary health- care
I services as well as dental, counseling, education,
pharmacy and laboratory
I services to eligible clients; county homeless alternative
psychiatric services; day
I treatment for seriouslly mentally ill; corrections health
care, and LARC.
REVENUE
EXPENSE
I NET COUNTY COST
I OUTSIDE HOSPITALS
Amount paid to various area
1 hospitals for residual populations including amounts
resultina from the 48- hour
FY91192
Actual Costs
FY92193
Projected Costs
I " rule.
ELIGIBILITY
! Eligibility determinations for
AHCCCS and other medical ( assistance programs are
available in various offices
throughout the county,
I including the Maricopa Medical Center and some other primary
care centers.
PUBLIC HEALTH
FY91 I92
Actual Costs
FY92193
Projected Costs
I Consists of community health,
disease control, epidemiology,
I vital statistics, rabieslanimal control, environmental health.
STATE MANDATED RESIDUAL RESPONSIBILITIES
MARICOPA COUNTY -- FISCAL YEAR 91/ 92
A. Eliaibilitv Determination
The County presently provides administration and eligibility workers for
determining patient eligibility for MN/ MI applicants and pre- screening of
applicants for Federal categoricals.
B. Medical Pre- AHCCCS Cost
The County remains responsible for paying medical costs for indigents until 48
hours prior to the time the County can notify AHCCCS of eligibility. Example:
An MN/ MI eligible patient arrives at a hospital on a Friday night and is
processed for eligibility. Final determination of eligibility can not be made until
Wednesday. The County is liable for services provided on Friday, Saturday and
Sunday.
C. Countv Medical Residual Services
The County remains responsible for providing additional services which are not
covered by AHCCCS. Example: Patients in Federal categories do not receive
dental care, the County must provide it.
The County is required to pay for the cost of care for individuals whose income
levels met indigency standards of the County in 1981. Also if an applicant for
AHCCCS fails to provide sufficient information to establish eligibility but is later
determined to be indigent, the County is liable for the cost of all services.
C FRCE OF THE
Pkna County A- ey
C i . Division
32 N. STONE
SUTE 1509
Tucsou, .4rkona & 701* 1412
( M27) 4 0- 5750
Fax ( 502) z0- e-
TO: ? at Ran& Director, Medical Auiraac4 Depamne~
SUBJECT: " Caunty Residual Li6bL. f for Ldigc; lt Health Ca- t
T3 assist you md & C otha mcmben of the Ccunty~ StatcT ask Fore in
dcvelo~ ing r dceniiion ni '' hntty RikdurJ Libbiliv, I submit the hiIowing & cmsion
of CTC sxtuces invclvd
C32fiu cha C C U ; ~ th~ e ~ pc we: t= ;; ra", Ct for ae art and rnaintenaacs d be bdige~ t
sick of ? ISe caunty snd to mair.* h ho~? it& t brtfot, M 3 tbe " gmd d3ddv
m~ bfiss: mx nnd Ehe bcsis of tke coades' residual bdit health a r e LicbSry kt
iu kcatits: senze.
Qli- 291( A] m! u the counriet ruporuibie lor prhding hospitaiidon 2nd rccdical
care (, sz! uuding ! an3 ern c x e but ind- laoLur: health & c? r ar d e e d m 9%
151) a kdfgeat p m , irsiudiq Ilrc# t mda the r u p c m : I rhe couq
oarncdo~ ag ency, to the arteat & at he cue is not the rtspodbility of AtiCCCS.
Under 511- 291( B), AHCCCS dcas not became rugonsi& prwiding csre to an
inc? igtnr W scch time as a c m ? y has made a fusl c& Mity and
pravidcd notica to AHCCCS of the * pmu's e i i g i i , Counties arc re& adly W h
for the c a m ai services pronded to a person who is " in fact ciig~% Icu" p to the p i n t at
which ae c o w gvu ? mpr notificatiolt of ' Sls ? man's eligiiity to MCCCS. For
nan- energezy care * ha ~ ~ Yliac~ ili~ tyis ' lim it4 to tbre prs4ns who actudly
conpiers the , UCCCS &?@ cadon prows, but rfie cotmica arr rcsgonaik for
mergenay sehcec, Subject to the knpital macadon rcquktmanu of # 1'; 3%'. 01.( C).
regadless of whether an appiiathn i~ cofipltted,
3y & e tsrms oi ? big statue, a c o wm ay zot iied~ crh c ciigibnfty iunduis, befit
levels and ategories of s~ vic: fot the hospitalirar'on and medical cart of the indigent
sick i3 cExt ~ t!!~ COUIIN0 2 ~ anuae1, 19K These requi:= ts ask four areas of
cc= ty tcsibud ability:
( 1) Tbc cnst ot care p d & d to pencar wk1: sc incmnc a d ruourar = ti% -
higher ! rv& that were in effect in a olmbcr d counties in hq 1981 bnt W
to r ~ c thhe cuntr. t AE- levth.
( 2) T~ acrt Of emergency care prCVided 10 ptnont during he pdod '= wen sped
' x, the 1981 c3unry : evd azld ~ 3 d to the blmtm XgCCCS level.
ms lhaity 3 enenled by $ 11- 291( 3) and $ 11- 297( Z1) 0 inc! ude zhe cost of
scfics ? rovided bctwedn qand doun ' x, lhe 198i ccury level ad mt5aQn : o
$,. Emoi the pt: scn's A3CCC. S wb3vI
( 3) Fk. c csn oi cue provided u, p o ~ r wwh o woAd ! EYC qurlifred m. ccr ; ie more
Inisat tiiginiiity . dw in ESCZ h C ~ U E = ~ iZ 1981, LC. ? imr Qmty & re3a. r& 3
& e e q i n~ T crrcn OW s k y ' ad h hi( 31 ha ~ O C Cw : w dctc- ns
r UOUrCr'S.
( 4) n ec ost of s e ~ u i uML civced by u. ca ht ? r& Ld by & e so~ ndcrin
1981, !. c. Gtntal, eyeglasses, non-? r: scipdon mediations and mental h d h
tanices.
? ll- WG) slku a auny raiCuany bb18 io plOPi& z and nan- m. dtri
as well u . o appli- n if the county fails to Drn~ iaea n mCCCS applica~ mu irhin
rhc time 5ame p~ ejcnidby M C C S rde. The mgh ewma lhblt far *& e cost
. of potcnddy AHCCCS c- cd xrrices f om ls hlat Sate that thc pcvrn should
have bttn determined elifilc untiS thr date : hat the mmty no- cilia MCCCS ai the
perm's dgixity.
In guc& this r t n ~ t em akes counties ! i& bk for & e csts of emergency nedicel
treatment pov. dcd ' y private Sospiral6 to ptsm who are " in hct eligiSe"
far o l e subject to aotifisation by the hospitd to me county. lhlr sta? ute : eiciorte~ he
residual liability creaud udsr 411- 31 eF3 $ 11- 291.01.
Sll- 297. M( C) cne& n saunq" s reddual WE; Bj ' o a e t t hcs@ to a poh; prior
w thu h 0 1 1 v ; ~ r~ ns w g t he county of a potcntbi indigmt'r cmcrpeny horpiirlizadco
if rhe patiecc submitted nideac; of insurance which w u law dcwmined to bc invaid
for the p y e s e for which tke patient was admit&
3362905.01 and 4 342903.02
Thm S - ~ ~ X CcrJa te Mires; residua! iiabbmy ! or b e ; pa& is hat ttbq p o d c iw
m ~ t i boy ~ tht . AHCCCS Admkisr~ tiona ild nimburemeut by lho counrier -
WCCCS inr the cost af nc& al scniccs ~ ronded by MCCCj o p c m % rcnv~ usky
du& d ciigiale ? or . GCCa by be COQR~~~ X,
la co.& i~ n, ae - tier sunsntly hare a broad md muhi- fasetrd residual Wcdky
for jocEgecor health care which ? rd.. c! es I " sakq adU ad r a W r fcdcnl nainrcnlocr
of & or. rqtirenet.;~, Tk: : eaiduaual ! iiibMty bc!&~; e r? u~~ ib8ityf m the cosu oi
m ~ wce- ey pr ddac ; o Ip erran fiw the ) oint ha or she 3seu ' he 1981 corny
~ SgoZtym- darcis . J? to * e point that : my mifiier hHaS' of ? ersc?' S
AIICCCS cli$ Dility xpmilsu oi rhthrr tie gem eve: ample*& <? e qplk! a* on
? races. it covc: s non- ezerpmq w. y; e$ : or * ac sacc ? sopie if ? by cmplctc % s
rppIbtian process. It indcda AIICCCS ma- co~ ned sc2viscs Ci!! a?. were pnided by
the mw. uer in Jannq 1981, rmcrgmey zanrparsrian for senor3 who for
awry arr, bmc tdth i r e scr4cs mc aedinl arc iro* iW 9 indipt : mny
@ oncs. It hc. Wr liability : o an eppficnxl fur sliga%$ if he or she inam cxpcnrtr
ax a poht 4dr whici fie sunry dodd hve mde w d$ ir) lrg& waination. and
ljsaility io AI;. CCX% for re* bbnblurcnent cl c..? ixaured W erroneous & giXity
& w& zutiorrr.
COUNTY MEDICAL ASSISTANCE BUDGETS, FY 91 - 92
CSA SURVEY 10/ 1 6/ 92, ELIGIBILITY DETERMINATION AND MEDICAL LIABILITY COSTS BY COUNTY
ADM COST PLUS
MED. LIABILITY
A. PERSONNEL INCLUDES ELIGIBILITY WORKERS, SUPERVISORS, QUALITY ASSURANCE, AND SUPPORT PERSONNEL ON THE DATE INDICATED.
B. COUNTY ADMINISTRATIVE COSTS FOR THE FISCAL YEAR ARE NET OF FEDERAL REIMBURSEMENTS FOR THE SAMETIME PERIOD.
C. MEDICAL PRE- AHCCCS COSTS INDICATE COUNTY MEDICAL RESIDUAL LIABILITY ASSOCIATED WlTH CONDUCTING AHCCCS ELIGIBILITY,
NOT INCLUDING LAWSUITS PAID IN FY 1991 - 1992 AMOUNTS PAID ON LAWSUITS ARE INDICATED IN COLUMN " En.
D. COUNTY MEDICAL RESIDUAL MEANS ONLY A COUNTY'S MAINTENANCE OF EFFORT FOR SERVICES PROVIDED TO PERSONS WHO MET A HIGHER
COUNTY INCOME STANDARD AND DID NOT QUALIFY FOR AHCCCS OR QUALIFIED FOR COUNTY RESIDUAL SERVICES.
CSA 1/ 20/ 92, admexp
MARIOOPA oxlIwY
1992- 93 ADOPTED BUDGET
The 1992- 93 Budget of $ 1.225 billion was adopted by the Marlcopa County Board d SupenrixKs on Jdy
20, 1992. Of this total budget, approximately $ 967 mllion, or 7996, Is the operating budget. The capkd
Improvement budget ( CIP) totals $ 175 m l i i or 14%. Debt Service amounts to $ 30 mllion ( 3%), and
contingency and reserve accounts represent the remalnlng $ 52 mllion ( 4%).
ADOPTED EXPENDITURE BUDGET
FY 1992- 93
DEBT SERVICE
1.66%
WLTURE AND RECREATKJN
47.48%
& SANITATION
MARIaXA CiUNTY
1992- 93 ADOPTED BUDGET
Total resources available for 1992- 93 expenditures Indude estimated fund balances d $ 132 mOlion and
revenues of approximately $ 1.094 Mlion. All revenue figures Muded h the Mget are estimates; the result
d a complex forecasting process. The pages that fdlw offer a more detaled desdpdon d major revenue
sources by gMng historical reference points, highlights d rcrvenue fludustions and the bads for current year
estimate. The conduding page d this s8ction combinss budgeted tqmd& uresa nd estimated tevenues to
present a projection d Maricopa County's f i# wrdlti on at Rscd year end.
ADOPTED REVENUE BUDGET
FY 1992- 93
FINES & FORFEITS M'XXUUIEwS
0.66%
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Description

Rating
TITLE	Testimony by the Honorable James D. Bruner, President County Supervisors Association Chairman, Board of Supervisors Maricopa County, before the Joint AHCCCS Ad Hoc Committee
CREATOR	Arizona. Joint AHCCCS Ad Hoc Committee.
SUBJECT	Legislative Study Committee--Arizona; Arizona Health Care Cost Containment System; Medical Care--Arizona--Cost Control;
Browse Topic	Government and politics
DESCRIPTION	37 pages (PDF version). File size: 1392.816 KB.
Language	English
Publisher	Arizona. Joint AHCCCS Ad Hoc Committee.
TYPE	Text
Material Collection	State Documents House Received Reports
Acquisition Note	Publication or link to publication sent to reports@lib.az.us
RIGHTS MANAGEMENT	Copyright to this resource is held by the creating agency and is provided here for educational purposes only. It may not be downloaded, reproduced or distributed in any format without written permission of the creating agency. Any attempt to circumvent the access controls placed on this file is a violation of United States and international copyright laws, and is subject to criminal prosecution.
DATE ORIGINAL	1993-01-21
Time Period	1990s (1990-1999)
ORIGINAL FORMAT	Paper
Source Identifier	LG 1.2:A 42/3
Location	ocn248643357
DIGITAL IDENTIFIER	RMDHOUSE_JAHCCSAHC_JAN_21_1993.pdf
DIGITAL FORMAT	PDF (Portable Document Format)
DIGITIZATION SPECIFICATIONS	Digitized into PDF form through scanning at the Records Management Division, Arizona State Library.
REPOSITORY	Arizona State Library. Archives and Public Records--Law and Research Library.
File Size	1392.816 KB
Full Text	TESTIMONY BY THE HONORABLE JAMES D. BRUNER PRESIDENT COUNTY SUPERVISORS ASSOCIATION CHAIRMAN, BOARD OF SUPERVISORS MARICOPA COUNTY BEFORE THE JOINT AHCCCS AD HOC COMMITTEE JANUARY 21, 1993 TESTIMONY BY THE HONORABLE JAMES D. BRUNER PRESIDENT COUNTY SUPERVISORS ASSOCIATION CHAIRMAN, BOARD OF SUPERVISORS MARICOPA COUNTY BEFORE THE JOINT AHCCCS AD HOC COMMITTEE JANUARY 21, 1993 TESTIMONY BY THE HONORABLE JAMES D. BRUNER, PRESIDENT, COUNTY SUPERVISORS ASSOCIATION OF ARIZONA, AND CHAIRMAN, BOARD OF SUPERVISORS, MARICOPA COUNTY, BEFORE THE JOINT AD HOC COMMITTEE ON AHCCCS, THURSDAY, JANUARY 21,1993. IT IS MY PLEASURE TO TESTIFY THIS EVENING IN MY CAPACITY AS CHAIRMAN OF THE MARICOPA COUNTY BOARD OF SUPERVISORS, AND AS PRESIDENT OF THE COUNTY SUPERVISORS ASSOCIATION. BOTH MARICOPA COUNTY AND THE COUNTY SUPERVISORS ASSOCIATION, REPRESENTING ALL OF ARIZONA'S FIFTEEN COUNTIES, ARE EXTREMELY CONCERNED WITH STATE BUDGET PROPOSALS IN THE AREA OF HEALTH CARE AND THEIR ENORMOUS POTENTIAL IMPACT ON ARIZONA COUNTIES. MY PRESENTATION WlLL BE THE ONE AND ONLY COMPREHENSIVE PRESENTATION ON BEHALF OF ALL OF ARIZONA'S COUNTIES AT THIS HEARING. IN HIS STATE- OF- THE- STATE MESSAGE, GOVERNOR SYMINGTON SAID: " IN 1993, WE MUST CONTINUE TO SEND WASHINGTON SOME OTHER SIGNALS OF FIERCE WESTERN INDEPENDENCE. WE WlLL CONTINUE TO PRESS OUR CASE THAT MANDATES FROM THE FEDERAL GOVERNMENT HAVE STRIPPED US OF OUR FISCAL SOVEREIGNTY. AND IN DOING SO THEY HAVE STRIPPED THE PEOPLE OF THEIR RIGHT TO REPRESENTATIVE GOVERNMENT AT THE STATE LEVEL, WHERE REPRESENTATIVE GOVERNMENT IS MOST IMPORTANT. WE WlLL CHALLENGETHESE FEDERAL MANDATES UNDER THE TENTH AMENDMENT AND WE WlLL DEFEND THE CONSTITUTIONAL RIGHT OF THIS STATE TO SELF- DETERMINATION." MOST MEMBERS OF THE LEGISLATURE APPLAUDED THOSE WORDS. YET IN RECENT DAYS, THERE HAVE BEEN INDICATIONS THAT SOME MEMBERS OF THIS LEGISLATURE ARE POISED TO PASS THE LARGEST UNFUNDED MANDATE UPON COUNTIES IN ARIZONA HISTORY. TONIGHT, I ASK THAT YOU STOP AND EXAMINE MORE CAREFULLY THE CONSEQUENCES OF THAT PROSPECTIVE ACTION. THERE ARE NOW TWO MAJOR PROPOSALS ON THE TABLE. ATTACHMENT 1 IS A CHART THAT SUMMARIZES THE IMPACT ON MARICOPA COUNTY OF THOSE TWO PROPOSALS. ATTACHMENT 2 SUMMARIZES THE IMPACT ON ALL 15 COUNTIES OF THE OVER $ 44 MILLION IN JLBC - PROPOSED CONTRIBUTION INCREASES FOR ACUTE CARE AND LONG TERM CARE. I WOULD LIKE TO COMPLIMENT GOVERNOR SYMlNGTON ON HIS STAND THAT SHIFTING COSTS TO LOCAL GOVERNMENT DOES NOT SOLVE PROBLEMS. WHILE MANY OF YOU AND MANY OF US ARE CONCERNED ABOUT THE PROSPECT OF DISCONTINUING COVERAGE FOR THE MEDICALLY NEEDY/ MEDICALLY INDIGENT POPULATION, HIS PROPOSAL DOES NOT SHIFT COSTS TO COUNTY GOVERNMENT AND RECOGNIZES THAT WHETHER THE EXPENSE RESTS WITH THE STATE OR THE COUNTY - THE SAME TAXPAYERS BEAR THE BURDEN. UNFORTUNATELY, WE CANNOT FIND ANYTHING POSITIVE TO SAY ABOUT THE JLBC STAFF PROPOSAL. IN FACT, THE JLBC STAFF PROPOSAL MAY BE THE SINGLE MOST DAMAGING FISCAL PROPOSAL EVER INTRODUCED AS FAR AS 2 ARIZONA'S COUNTIES ARE CONCERNED. IN CONTRAST TO THE TRUTH IN BUDGETING PRINCIPLES ADHERED TO BY THE GOVERNOR IN ADDRESSING THE MAJOR ISSUES IN HEALTH CARE, THE JLBC PROPOSAL RESORTS TO THE OLDEST TRICK IN THE BOOK - SHIFTING COSTS TO THE LOWER LEVEL OF GOVERNMENT. THlS APPROACH IS EXACTLY WHAT GOVERNOR SYMINGTON AND MANY MEMBERS OF THlS LEGISLATURE HAVE OPPOSED. THlS APPROACH DOES NOT SOLVE THE PROBLEM, IT ONLY PASSES THE PROBLEM ON TO THE COUNTIES. PLEASE UNDERSTAND THlS SIMPLE FACT - NEITHER MARICOPA COUNTY NOR ANY OF ARIZONA'S COUNTIES HAVE THE ABILITY TO WITHSTAND THE COST-SHIFTING THAT IS PROPOSED IN THE JLBC STAFF PROPOSAL, AND WE VIGOROUSLY OPPOSE IT OR ANYTHING SIMILAR TO IT. PLEASE ALSO UNDERSTAND THAT THERE ARE SERIOUS CONSEQUENCES ASSOCIATED WlTH SUCH COST- SHIFTING, AS WE WILL IDENTIFY TONIGHT AND IN THE DAYS AHEAD. AS I WILL OUTLINE FOR YOU TONIGHT, THlS IS NOT A MAlTER OF SELFISH PROTECTION OF COUNTY RESOURCES. IT IS MATTER OF FINANCIAL SURVIVAL. TONIGHT, I WOULD LIKE TO REVIEW WlTH THlS AUDIENCE THE SCOPE OF THE COUNTY ROLE IN HEALTH CARE. THAT ROLE ENCOMPASSES MUCH MORE THAN JUST THE COUNTY CONTRIBUTION TO THE ACUTE CARE AND LONG TERM CARE PROGRAMS OF AHCCCS. SECOND, I WOULD LIKE TO REVIEW WlTH YOU THE COUNTY FINANCIAL STRUCTURE AND ITS CURRENT FINANCIAL CONDITION. AS I WILL OUTLINE FOR YOU, THAT CONDITION CURRENTLY IS MOST UNFAVORABLE, PARTICULARLY IN THE HEALTH CARE AREA. THIRD, I WOULD LIKE TO DISCUSS AND REVIEW WlTH YOU THE IMPACT OF THE TWO BUDGET PROPOSALS ON THE TABLE. FINALLY, I WOULD LIKE TO RAISE SEVERAL ISSUES THAT I BELIEVE MERIT THE CONSIDERATION OF THIS GROUP IN CRAFTING A SOLUTION. LET ME ASSURE YOU THAT MARICOPA COUNTY, WHILE IT IS MOST STRONGLY OPPOSED TO THE JLBC PROPOSAL, IS COMMITTED TO PLAYING A CONSTRUCTIVE ROLE IN THESE DISCUSSIONS AND WISHES TO BE A PART OF THE SOLUTION, AS WE VIEW THE COUNTY TO HAVE A CONTINUING ROLE AS A REGIONAL LEADER IN THE AREA OF HEALTH CARE. COUNTY ROLE IN HEALTH CARE IN THE LATE 1 970tS, COUNTIES WERE THE SOLE PUBLIC PROVIDERS OF CARE TO THE INDIGENT SICK IN ARIZONA. COUNTIES WERE EXPERIENCING SEVERE FINANCIAL DISTRESS, AND ARIZONA TAXPAYERS WERE NOT RECEIVING THEIR SHARE OF AVAILABLE FEDERAL DOLLARS. FOR THESE REASONS, AND IN RESPONSE TO FEDERAL MANDATES, ARIZONA CREATED AHCCCS IN 1981 AS AN EXPERIMENTAL ALTERNATIVE SYSTEM TO MEDICAID. COUNTIES PAY AN ANNUAL CONTRIBUTION ESTABLISHED BY THE LEGISLATURE TO THE ACUTE CARE PROGRAM OF AHCCCS, AND COUNTIES PAY 100 PERCENT OF THE NON- FEDERAL PORTION OF THE PROGRAM COST FOR THE LONG TERM CARE PROGRAM. SOME OF YOU MAY BE UNDER THE IMPRESSION THAT THIS IS WHERE THE COUNTY ROLE IN HEALTH CARE NOW BEGINS AND ENDS. IN FACT, THE COUNTY ROLE IN HEALTH CARE IS MUCH BROADER THAN THAT. HEALTH CARE ACCOUNTS FOR 42 PERCENT OF MARICOPA COUNTY'S BUDGET AND OUR CONTRIBUTIONS TO THE ACUTE CARE AND LONG TERM CARE PROGRAMS OF AHCCCS ARE ONLY TWO COMPONENTS OF WHAT MARICOPA COUNTY EXPENDS ON HEALTH CARE OVERALL. THESE EXPENDITURES ARISE FROM A VARIETY OF PROGRAMS AND AREAS OF LIABILITY. OF PARTICULAR NOTE IS THAT WE OPERATE WHAT IS BY FAR THE LARGER OF THE STATE'S ONLY TWO REMAINING COUNTY- OPERATED HOSPITALS. AlTACHMENT 3 IS A CHART THAT DETAILS OUR ACTUAL EXPENDITURES IN THESE AREAS FOR THE LAST FISCAL YEAR AND PROJECTED EXPENDITURES FOR THE CURRENT FISCAL YEAR. AS YOU CAN SEE, THE HEALTH CARE RESPONSIBILITIES OF THE COUNTY ARE QUITE BROAD AND INVOLVE A SUBSTANTIAL PORTION OF OUR COUNTY BUDGET. AHCCCS DID NOT FULLY ASSUME RESPONSIBILITY FOR ALL POPULATION GROUPS AND TYPES OF SERVICES THAT THE COUNN WAS SERVING PRIOR TO 1981. IN FACT, AS A PART OF THE AHCCCS LEGISLATION, COUNTIES WERE LEFT WlTH A " MAINTENANCE OF EFFORT" STANDARD FOR PROVIDING HEALTH CARE TO INDIVIDUALS. UNDER THlS STANDARD, COUNTIES MUST CONTINUE TO PROVIDE, OR " MAINTAIN ITS EFFORT", WlTH RESPECT TO BOTH THOSE POPULATION GROUPS, AND THE ARRAY OF COUNTY SERVICES, THAT EXISTED AT THE TIME AHCCCS WAS CREATED. IN OTHER WORDS, IF AN INDIVIDUAL WAS ELIGIBLE FOR COUNN HEALTH CARE COVERAGE OR A TYPE OF SERVICE WAS PROVIDED BY THE COUNTY UNDER THE LAWS, RULES AND REGULATIONS THAT EXISTED IN 1981, AND AHCCCS DOES NOT TODAY COVER THAT INDIVIDUAL OR PROVIDE THAT SERVICE, THEN THE COUNN IS REQUIRED TO PAY THAT COST. THlS EXPENSE, WHICH CONSTITUTES OUR MAINTENANCE OF EFFORT OR RESIDUAL LIABILITY OBLIGATION, IS IN THE MANY MILLIONS OF DOLLARS EACH YEAR. 1 ATTACHMENT 4 CONTAINS A BRIEF EXPLANATION OF THE VARIOUS TYPES OF I RESIDUAL LIABILITY AND SUMMARIES OF THE STATUTES GOVERNING SUCH LIABILITY. ATTACHMENT 5 SETS FORTH RESIDUAL LIABILITY AND ELIGIBILITY DETERMINATION COSTS FOR ALL 15 COUNTIES. OBVIOUSLY, OUR RESIDUAL HEALTH CARE OBLIGATIONS REMAIN QUITE SIGNIFICANT OUTSIDE OF AHCCCS. PART OF THE JLBC PROPOSAL IS TO INCREASE THE COUNTY CONTRIBUTION TO THE ACUTE CARE PROGRAM TO RAISE THE LEVEL OF OUR FINANCIAL PARTICIPATION TO ONE THIRD OF TOTAL STATE- COUNTY COSTS, WHICH IS WHAT JLBC INDICATES IT WAS IN THE EARLY YEARS OF THE AHCCCS PROGRAM. WE BELIEVE THIS ANALYSIS TO BE FLAWED FOR TWO REASONS. FIRST, THIS ANALYSIS DOES NOT TAKE INTO ACCOUNT THE FULL RANGE OF THE COUNTY'S COMMITMENT TO HEALTH CARE SPENDING - IT ONLY LOOKS IN ISOLATION AT THE ACUTE CARE CONTRIBUTION. ALTHOUGH LEGISLATIVE HISTORY IS FREQUENTLY LACKING, WE BELIEVE THAT THE INTENT OF THE LEGISLATURE WHEN AHCCCS WAS CREATED WAS TO FIX THE COUNTY CONTRIBUTION AT A SET AMOUNT IN EXCHANGE FOR THE COUNTY RETAINING RESIDUAL RESPONSIBILITY. THE JLBC PROPOSAL PROPOSES TO UNCAP THE COUNTY CONTRIBUTION AND TO SET IT AT A PERCENTAGE EACH YEAR WITHOUT RELIEVING THE COUNTIES OF RESIDUAL RESPONSIBILITY. IF THE JLBC PROPOSAL IS TO BE SERIOUSLY CONSIDERED, THEN ELIMINATION OF RESIDUAL LIABILITY FOR COUNTIES DESERVES EQUALLY SERIOUS CONSIDERATION. THESE TWO ISSUES GO HAND IN HAND. RESIDUAL LIABILITY IS, IN FACT, THE FIRST MAJOR ISSUE WE WOULD IDENTIFY FOR THIS COMMITTEE TO CONSIDER IN ADDITION TO THE OSPB AND JLBC PROPOSALS. THE SECOND REASON WHY THE JLBC ANALYSIS IS FLAWED IS THAT IT FAILS TO TAKE INTO ACCOUNT THE CAPACITY OF COUNTIES TO GENERATE REVENUE. AS I WILL OUTLINE FOR YOU IN A MOMENT, MOST COUNTIES HAVE NO ABILITY TO DO SO. THUS, THE STATE AND THE COUNTIES ARE NOT IN PARALLEL POSITIONS WHEN IT COMES TO ABSORBING COST INCREASES. IF THE STATE, WlTH ITS GREATER FLEXIBILITY TO ABSORB COSTS, HAS CONCLUDED IT CANNOT AFFORD ANY MORE MONEY FOR AHCCCS - IT SHOULD NOT SEEK TO PAY FOR INCREASES WlTH REVENUE FROM COUNTIES WHICH HAVE ESSENTIALLY NO FLEXIBILITY AS FAR AS REVENUE IS CONCERNED. WHATEVER IT IS THAT THE STATE CANNOT AFFORD - THE COUNTIES CANNOT AFFORD EITHER. COUNTY FINANCIAL STRUCTURE AND CONDITION NOW, I WOULD LIKE TO SAY A FEW WORDS ABOUT MARICOPA COUNTY'S FINANCIAL STRUCTURE AND CONDITION. MARICOPA COUNTY GOVERNMENT IS FINANCED PRIMARILY BY PROPERTY TAXES, SALES TAXES, FEES AND CHARGES, AND OTHER NON- TAX SOURCES OF REVENUE SUCH AS GRANTS. THE TWO MAJOR VARIABLES IN THIS MIX ARE PROPERTY TAXES AND SALES TAXES. THE FINANCIAL STRUCTURE OF ALL 15 COUNTIES IS ESSENTIALLY THE SAME. AJTACHED AS AITACHMENT 6 ARE TWO CHARTS OUTLINING THE CATEGORIES OF REVENUES AND EXPENDITURES FOR MARICOPA COUNTY FOR THE CURRENT FISCAL YEAR. MARICOPA COUNTY'S ONLY SOURCE OF SALES TAX REVENUE IS ITS PORTION OF THE SALES TAX REVENUE SHARED BY THE STATE OF ARIZONA WlTH COUNTIES. MARICOPA COUNTY DOES NOT HAVE ANY AUTHORITY FOR A 8 COUNTYWIDE SALES TAX. WHILE OTHER COUNTIES DO HAVE THlS AUTHORITY, THE MOOD OF THE ELECTORATE IS CLEARLY IN OPPOSITION TO TAX INCREASES OF THlS NATURE. IN THE AREA OF PROPERTY TAXES, COUNTIES ARE GOVERNED BY THE 1980 VOTER APPROVED CONSTITUTIONAL LEVY AND EXPENDITURE LIMITS. OUR TOTAL LEVY FOR PROPERTY TAX PURPOSES MAY NOT INCREASE IN ANY GIVEN YEAR BY MORE THAN THE SUM OF 2 PERCENT OF THE PRIOR YEAR'S LEVY PLUS NEW CONSTRUCTION. MARICOPA COUNTY DOES NOT OBJECT TO OR OPPOSE THlS LEVY LIMITATION, BUT WE MUST POINT OUT TO YOU THAT THE EXISTENCE OF THE LEVY LIMITATION PREVENTS MARICOPA COUNTY FROM RAISING THE PROPERTY TAX LEVY IN ORDER TO RAISE REVENUE TO PAY FOR PROGRAMS. THlS IS ALSO TRUE FOR MOST OF THE OTHER COUNTIES. AlTACHMENT 7 OUTLINES THE CURRENT TAX RATES AND RATE LIMITS FOR ALL 15 COUNTIES. IT ALSO IDENTIFIES WHAT THE JLBC PROPOSAL WOULD MEAN IN TERMS OF TAX RATE INCREASES IF IT WERE POSSIBLE FOR COUNTIES TO PASS THEIR INCREASES ON TO PROPERTY TAX PAYERS. HOWEVER, MARICOPA COUNTY AND MOST OF THE OTHER COUNTIES DO NOT HAVE THE ABILITY TO INCREASE PROPERTY TAXES OR SALES TAXES, OR ANY OTHER TAXES, TO RAISE REVENUE TO PAY FOR ADDITIONAL COSTS PASSED ON BY THE LEGISLATURE IN THE AREA OF AHCCCS, OR ANY OTHER AREA. WE CERTAINLY HAVE NO WAY OF RAISING THE REVENUE TO ABSORB THE TYPES OF 9 INCREASES THAT ARE PROPOSED BY JLBC. EVEN IF JLBC'S REVENUE ESTIMATES ARE CORRECT, OUR SHARE OF THE ADDITIONAL SHARED SALES TAX REVENUE WHICH MARICOPA COUNTY WOULD RECEIVE NEXT YEAR WOULD PAY FOR LESS THAN HALF OF THE COST SHIFTS THAT ARE PROPOSED UNDER THE JLBC PROPOSAL. MANDATING THAT ALL NEW REVENUES PAY FOR HEALTH CARE ALSO LEAVES US WITH ABSOLUTELY NO NEW REVENUE TO DEAL WITH OTHER PROGRAMS WHERE WE ARE EXPERIENCING INCREASES DUE TO INFLATION IN COSTS, GROWTH IN SERVICE DEMANDS, OR BOTH. OUR JAILS WOULD BE AN EXAMPLE OF SUCH AN AREA. OUR JAIL EXPENSE IN 1983 WAS EQUAL TO $ 1 7.8 MILLION - THAT AMOUNT HAS MUSHROOMED 267% TO THE CURRENT YEAR LEVEL OF $ 47.5 MILLION. NEW REVENUES ARE NEEDED TO COPE IN MANY CRITICAL AREAS OF COUNTY RESPONSIBILITY BESIDES HEALTH CARE. ON THE EXPENDITURE SIDE, OUR CURRENT FINANCIAL SITUATION IS MOST UNFAVORABLE. MARICOPA COUNTY HEALTH CARE CARRIED INTO THE CURRENT FISCAL YEAR A NEGATIVE BALANCE OF APPROXIMATELY $ 1 5 MILLION DOLLARS. THIS NEGATIVE BALANCE RESULTED PRIMARILY FROM THE EVER GROWING AMOUNT OF UNCOMPENSATED CARE PROVIDED BY THE COUNTY HOSPITAL AND AMBULATORY CARE CLINICS. YESTERDAY MORNING, THE BOARD OF SUPERVISORS RECEIVED A REPORT FROM A MANAGEMENT COUNCIL THAT HAS BEEN APPOINTED TO OVERSEE VARIOUS ACTIVITIES IN THE HEALTH CARE AREA WHERE COSTS ARE SIGNIFICANTLY EXCEEDING BUDGETED AMOUNTS. THE REPORT WE RECEIVED FROM THE MANAGEMENT COUNCIL INDICATES THAT MARICOPA COUNTY HEALTH CARE CAN EXPECT TO END THE YEAR WlTH A NEGATIVE BALANCE OF APPROXIMATELY $ 30 MILLION DOLLARS. IMPACT OF JLBC PROPOSAL AS WE LOOK AT THE JLBC PROPOSAL, OUR EXISTING $ 30 MILLION PROBLEM WOULD BE INCREASED BY AT LEAST $ 31 MILLION DOLLARS IN NEW STATE MANDATED COSTS, INCLUDING A $ 20 MILLION DOLLAR INCREASE IN THE COUNTY ACUTE CARE CONTRIBUTION, AN OVER $ 5 MILLION DOLLAR INCREASE IN THE COUNTY LONG TERM CARE CONTRIBUTION, AND A $ 6 MILLION DOLLAR INCREASE IN UNCOMPENSATED CARE PROVIDED BY MARICOPA MEDICAL CENTER AND COUNTY CLINICS FOR UNCOMPENSATED CARE THAT WOULD ARISE FROM THE FACT THAT UNDOCUMENTED ALIENS WOULD NO LONGER BE COVERED FOR OTHER THAN EMERGENCY SERVICES, AND CUTS IN SOBRA COVERAGE FOR PREGNANT WOMEN AND CHILDREN. TO SUMMARIZE, TAKING OUR EXISTING PROBLEM AND ADDING TO IT THE JLBC PROPOSAL LEAVES US WlTH A $ 60 MILLION DOLLAR PROBLEM IN THE HEALTH CARE AREA THAT WE HAVE ABSOLUTELY NO REVENUE TO COVER. THIS SITUATION WlLL HAVE DEVASTATING CONSEQUENCES FOR MARICOPA COUNTY GOVERNMENT AND CITIZENS. THESE DEVESTATING CONSEQUENCES WILL BE RELFECTED ACROSS THE ENTIRE SPECTRUM OF COUNTY SERVICES, INCLUDING COURTS, LAW ENFORCEMENT, JAILS, ELECTIONS, SOCIAL SERVICES, ASSESSOR, RECORDER, PUBLIC DEFENDER, MEDICAL EXAMINER, PARKS AND RECREATION AND MANY OTHER AREAS. ALL ARIZONA COUNTIES WlLL SUFFER SIMILAR CONSEQUENCES. WE HAVE NO ALTERNATIVE BUT TO OPPOSE THE JLBC STAFF PROPOSAL. THlS PROPOSAL DOES NOT ADDRESS THE PROBLEM - IT ONLY SHIFTS THE PROBLEM TO OTHER LEVELS OF GOVERNMENT AND WlLL CREATE SEVERE PROBLEMS FOR LOCAL CITIZENS ON MANY OTHER ISSUES. ISSUES TO BE ADDRESSED THEREFORE, WE URGE THAT THlS AD- HOC GROUP SEEK REAL SOLUTIONS TO THE PROBLEM AND AVOID THE TEMPTATION TO SOLVE IT AT THE EXPENSE OF LOCAL TAXPAYERS BY SHIFTING COSTS TO COUNTY GOVERNMENT. GIVEN THE PRESENT ADVERSE FINANCIAL CONDITION OF THE COUNTIES, THE IMPACT OF THESE SOLUTIONS SHOULD BE NO WORSE THAN REVENUE NEUTRAL TO THE COUNTIES. AMONG THE ISSUES WE BELIEVE YOU SHOULD ADDRESS IN THlS REGARD IS THE ELIMINATION OF COUNTY RESIDUAL RESPONSIBILITY. TO THE EXTENT THAT THE STATE HAS CONCLUDED THAT INDIGENT HEALTH CARE CAN BE PROVIDED ONLY TO CERTAIN POPULATION GROUPS, AND THAT ONLY CERTAIN SERVICES CAN BE PROVIDED, IT MAKES NO SENSE TO HAVE A SEPARATE DEFINITION OF INDIGENCY OR SEPARATE MANDATED ARRAY OF SERVICES IN EACH COUNTY BASED ON CIRCUMSTANCES THAT EXISTED TWELVE OR MORE YEARS AGO. IT IS TIME TO HAVE A STATEWIDE UNIFORM STANDARD FOR INDIGENCY AND SERVICES AND TO ELIMINATE COSTLY RESIDUAL RESPONSIBILITY THAT OUR TAXPAYERS SIMPLY CAN NO LONGER AFFORD. I SHARE THE CONCERN OF MANY OF YOU ABOUT DISCONTINUING COVERAGE FOR THE MNIMI POPULATION. AS AN ALTERNATIVE TO EITHER DROPPING THAT POPULATION AS CALLED FOR IN THE EXECUTIVE PROPOSAL OR KEEPING THAT POPULATION AS CALLED FOR IN THE JLBC PROPOSAL, THIS AD- HOC GROUP SHOULD LOOK AT THE MIDDLE GROUND IN WHICH PERHAPS SOME OF THE RULES AND STANDARDS OF THE EXISTING MNIMI PROGRAM COULD BE MODIFIED TO REDUCE COSTS WHILE PROVIDING CARE TO THOSE WHO MOST DESPERATELY NEED IT. AMONG THE ASPECTS THAT MAY REQUIRE EXPLORATION ARE: THE LENGTH OF THE PERIOD OF ELIGIBILITY. AUTOMATIC COVERAGE OF ALL FAMILY MEMBERS. ASSET STANDARDS FOR ELIGIBILITY. CO- PAYMENTS AND DEDUCTIBLES. THE ARRAY OF SERVICES - SO LONG AS ANY LIMITATIONS ON SERVICES ARE MIRRORED IN THE COUNTY'S MAINTENANCE OF EFFORT. FINALLY, THE CURRENT SYSTEM FOR ELIGIBILITY DETERMINATION NEEDS TO BE ASSESSED. MARICOPA COUNTY AND ALL 15 COUNTIES ARE PREPARED TO ADDRESS ALTERNATIVES TO THE CURRENT ELIGIBILITY DETERMINATION SYSTEM. ' THANK YOU FOR HEARING MY TESTIMONY ON BEHALF OF ARIZONA'S 15 COUNTIES. AS CHAIRMAN OF THE MARICOPA COUNTY BOARD OF SUPERVISORS AND PRESIDENT OF THE COUNTY SUPERVISORS ASSOCIATION, I ASSURE YOU WE WlLL FULLY PARTICIPATE IN THESE DISCUSSIONS WITH ALL INTERESTED PARTIES TO SEEK RESOLUTION. THAT RESOLUTION, HOWEVER, MUST BE SENSITIVE TO THE CONSIDERABLE RESOURCE LIMITATIONS OF THE COUNTIES. I WlLL BE HAPPY TO RESPOND TO YOUR QUESTIONS. Attachment 1 MARICOPA COUNTY - PI 1993- 94 FINANCIAL IMPACT OF OSPB AND JLBC BUDGET PROPOSALS Joint Leaislative Budaet Committee Pro~ osal Funding only Emergency Service for 18,000 undocumented aliens, eliminating MN/ MI coverage for this population. Estimated impact: < $ 4.4 million > Note: impact estimate based on Maricopa County's share of the JLBC estimate. ( Maricopa County will determine concurrence with this estimate when the assumptions made by JLBC in developing their estimate are known.) Future year impact significantly higher ($ 10.2 million in FY 94- 95), with multi- year increase undetermined. Uncompensated care provided by Maricopa Medical Center may increase if private hospitals refuse or transfer patients for whom they are no longer compensated. ' Rdi back' SOBRA coverage for pregnant women and infants from 140% to 133% of Federal Poverty Level. Estimated impact: < $ 1.3 million > Note: Based on JLBC estimate. Actual negative impact may be higher as Maricopa County does not currently enrdi all potentially eligible women. Indirect costs related to expensive high- risk e pregnancies/ complicated deliveries are not included in the estimate. increase County Acute Care Contribution. Estimated impact: < $ 20 million > Note: Estimated impact based on JLBC and CSA analysis. Increase County Long Term Care Contribution. Estimated impact: < $ 5.5 million > Note: Estimated impact based on JLBC and CSA analysis. Net Impact All JLBC Proposals: < $ 31.2 million > Office of Strategic Plannina and Budaetin- a Pro~ osal Elimination of full MN/ MI coverage for 35,000 recipients. Estimated impact: < $ 22.6 million > Note: lmpact based on increased uncompensated care provided by MMC to acutely Rl/ lnjured persons and loss of administrative revenue percentage for Maricopa Health Plan. This lmpact is expected to increase significantly if private hospitals refuse or transfer patients for whom they are no longer compensated. Extension of SOBRA to 69,000 pregnant women and children up to 185% of Federal Pwerty Level. Estimated impact: $ 3.5 million Note: This is the estimated net benefit from lncrease in revenue. lmpact is based on additional coverage of only 2% of the population currently being served, d which up to 50% would be ineligibie based on inability to meet citizenship requirement of SOBRA. ( based on Ambulatory Care Prenatal Pilot Study data) Elimination of County Residuality. Estimated impact: $ 11 million Note: This is the amount currently spent on payments to outside hospitals for indigent care. This estimate differs from the Maricopa County data Included in the table developed by CSA for FY 1992 due to large settlements and write- offs made to expedite resolution of the Perez lawsuit and resulting backlog of daims during that year. It does not lndude the estimated ' tall' for remaining daims ($ 2.5 million) or chronic conditions ($ 2.3 million). Elimination of MN/ MI determination. Estimated impact: $ 7.6 million Note: This impact is based upon the net cost of all eligibility functions currently performed by the County. The estimate assumes some eligibility functions will be retained by the County based on the OSPB statement that ' Hospitals and other providers will probably invest more time making sure persons whose expenses are potentially reimbursable under Title XIX fill out applications with DES.' It also assumes these funds will remain with the County as a partial offset to increased costs resulting from the implementation of other proposal components. Increase County Long Term Care contribution. Estimated impact: < $ 5 million > Net Impact All OSPB Proposals: < $ 5.5 million > This analysis Is intended as an esafnmfe only since a significant additional increase In uncompensated care provided by both Maricopa Medical Center and the Ambulatory Care Primary Care Centers couM occur as a result of the elimination of the MN/ MI program. In addition, as noted in the JLBC analysis, the multi- year impacts are estimated to increase for many of the proposed changes. Long Term Care Payments ( ALTCS) county I ALTCS Greenlee 0.34% $ 31 3,789 $ 346,739 La Paz 0.34% $ 31 3,789 $ 32,950 1 6346,7a Maricopa 56.55% $ 52,190,057 $ 5,480,= 11 $ 57,870,438 ACTCS ] ALTCS Payment 1 County Apache Cochise Santa Cruz 1.05% $ 969,151 ' $ 1 01,769 Yavapai 3.12% $ 2,879,453 4302,366 1 Yurna 2.75% $ 2,539,151 $ 266,632 1 Totals: 100.00% $ 92,297,600 $ 9,692,000 1 Percent Increase 5.43% f OSPB Increase-- $ 101,242,559 Acute Care AHCCCS Payments Percent 01 Total 0.22% 2.53% Greenlee La Paz Maricopa $ 33,144,215 56.46% $ 37,723,963 Mo have $ 1,218,011 2.07% $ 1,207,812 Pirna $ 1 2,748,275 21.72% $ 1 4,590,061 22.420% Santa Cruz Totals: $ 58,707,227 100.00% $ 65,076,099 100.000% ' In 1901, the Legislature increased Pima and Maricopa counties' AHCCCS contribution by $ 6.6 million while keeping other counites' amount constant The JLBC proposed increase of $ 34.6 million is distributed to all counties according to the revised percentages and would accentuate Pima and Maricopa's proportional contfibutions in the future. Payment FY92- 93 $ 203,064 $ 2,335,924 Wcmase FY99194 FY 33- 94 { JlSC) 82%$ 23 f . ,$ 224,3W $ 245,291 1 $ 2,589.21 5 ATTACHMENT 3 I COUNTY CONTRIBUTION TO AHCCCS ACUTE CARE Acute Care includes AFDC, SSI, ( MAO, and MNIMI. There is no federal reimbursement for I COUNTY CONTRIBUTION TO ALTCS LONG TERM CARE I Includes elderly and physically disabled. Counties pay 100% of non- federal share. LONG TERM CARE RESIDUAL MARICOPA COUNTY HEALTH CARE COSTS FY 1991 - 92 AND 1992193 FY91 192 Actual Costs FY92193 Projected Costs 8 Costs associated with County Maintenance of Effort statutes. 1 Counties cannot reduce medical benefits and categories of services for persons who meet ( county indigent standards which were in place as of January 1, 1981. I I * Includes $ 4.8 million increase over FY90191 enacted by the Legislature. I HOSPITAL I Maricopa County Medical Center is a $ 172.4 million 8 hospital with 106 departments, 194 attending physicians, and 31 1 visiting physicians. REVENUE EXPENSE I NET COUNTY COST AMBULATORY CARE 1 Ambulatory care consists primary care centers providing direct primary health- care I services as well as dental, counseling, education, pharmacy and laboratory I services to eligible clients; county homeless alternative psychiatric services; day I treatment for seriouslly mentally ill; corrections health care, and LARC. REVENUE EXPENSE I NET COUNTY COST I OUTSIDE HOSPITALS Amount paid to various area 1 hospitals for residual populations including amounts resultina from the 48- hour FY91192 Actual Costs FY92193 Projected Costs I " rule. ELIGIBILITY ! Eligibility determinations for AHCCCS and other medical ( assistance programs are available in various offices throughout the county, I including the Maricopa Medical Center and some other primary care centers. PUBLIC HEALTH FY91 I92 Actual Costs FY92193 Projected Costs I Consists of community health, disease control, epidemiology, I vital statistics, rabieslanimal control, environmental health. STATE MANDATED RESIDUAL RESPONSIBILITIES MARICOPA COUNTY -- FISCAL YEAR 91/ 92 A. Eliaibilitv Determination The County presently provides administration and eligibility workers for determining patient eligibility for MN/ MI applicants and pre- screening of applicants for Federal categoricals. B. Medical Pre- AHCCCS Cost The County remains responsible for paying medical costs for indigents until 48 hours prior to the time the County can notify AHCCCS of eligibility. Example: An MN/ MI eligible patient arrives at a hospital on a Friday night and is processed for eligibility. Final determination of eligibility can not be made until Wednesday. The County is liable for services provided on Friday, Saturday and Sunday. C. Countv Medical Residual Services The County remains responsible for providing additional services which are not covered by AHCCCS. Example: Patients in Federal categories do not receive dental care, the County must provide it. The County is required to pay for the cost of care for individuals whose income levels met indigency standards of the County in 1981. Also if an applicant for AHCCCS fails to provide sufficient information to establish eligibility but is later determined to be indigent, the County is liable for the cost of all services. C FRCE OF THE Pkna County A- ey C i . Division 32 N. STONE SUTE 1509 Tucsou, .4rkona & 701* 1412 ( M27) 4 0- 5750 Fax ( 502) z0- e- TO: ? at Ran& Director, Medical Auiraac4 Depamne~ SUBJECT: " Caunty Residual Li6bL. f for Ldigc; lt Health Ca- t T3 assist you md & C otha mcmben of the Ccunty~ StatcT ask Fore in dcvelo~ ing r dceniiion ni '' hntty RikdurJ Libbiliv, I submit the hiIowing & cmsion of CTC sxtuces invclvd C32fiu cha C C U ; ~ th~ e ~ pc we: t= ;; ra", Ct for ae art and rnaintenaacs d be bdige~ t sick of ? ISe caunty snd to mair.* h ho~? it& t brtfot, M 3 tbe " gmd d3ddv m~ bfiss: mx nnd Ehe bcsis of tke coades' residual bdit health a r e LicbSry kt iu kcatits: senze. Qli- 291( A] m! u the counriet ruporuibie lor prhding hospitaiidon 2nd rccdical care (, sz! uuding ! an3 ern c x e but ind- laoLur: health & c? r ar d e e d m 9% 151) a kdfgeat p m , irsiudiq Ilrc# t mda the r u p c m : I rhe couq oarncdo~ ag ency, to the arteat & at he cue is not the rtspodbility of AtiCCCS. Under 511- 291( B), AHCCCS dcas not became rugonsi& prwiding csre to an inc? igtnr W scch time as a c m ? y has made a fusl c& Mity and pravidcd notica to AHCCCS of the * pmu's e i i g i i , Counties arc re& adly W h for the c a m ai services pronded to a person who is " in fact ciig~% Icu" p to the p i n t at which ae c o w gvu ? mpr notificatiolt of ' Sls ? man's eligiiity to MCCCS. For nan- energezy care * ha ~ ~ Yliac~ ili~ tyis ' lim it4 to tbre prs4ns who actudly conpiers the , UCCCS &?@ cadon prows, but rfie cotmica arr rcsgonaik for mergenay sehcec, Subject to the knpital macadon rcquktmanu of # 1'; 3%'. 01.( C). regadless of whether an appiiathn i~ cofipltted, 3y & e tsrms oi ? big statue, a c o wm ay zot iied~ crh c ciigibnfty iunduis, befit levels and ategories of s~ vic: fot the hospitalirar'on and medical cart of the indigent sick i3 cExt ~ t!!~ COUIIN0 2 ~ anuae1, 19K These requi:= ts ask four areas of cc= ty tcsibud ability: ( 1) Tbc cnst ot care p d & d to pencar wk1: sc incmnc a d ruourar = ti% - higher ! rv& that were in effect in a olmbcr d counties in hq 1981 bnt W to r ~ c thhe cuntr. t AE- levth. ( 2) T~ acrt Of emergency care prCVided 10 ptnont during he pdod '= wen sped ' x, the 1981 c3unry : evd azld ~ 3 d to the blmtm XgCCCS level. ms lhaity 3 enenled by $ 11- 291( 3) and $ 11- 297( Z1) 0 inc! ude zhe cost of scfics ? rovided bctwedn qand doun ' x, lhe 198i ccury level ad mt5aQn : o $,. Emoi the pt: scn's A3CCC. S wb3vI ( 3) Fk. c csn oi cue provided u, p o ~ r wwh o woAd ! EYC qurlifred m. ccr ; ie more Inisat tiiginiiity . dw in ESCZ h C ~ U E = ~ iZ 1981, LC. ? imr Qmty & re3a. r& 3 & e e q i n~ T crrcn OW s k y ' ad h hi( 31 ha ~ O C Cw : w dctc- ns r UOUrCr'S. ( 4) n ec ost of s e ~ u i uML civced by u. ca ht ? r& Ld by & e so~ ndcrin 1981, !. c. Gtntal, eyeglasses, non-? r: scipdon mediations and mental h d h tanices. ? ll- WG) slku a auny raiCuany bb18 io plOPi& z and nan- m. dtri as well u . o appli- n if the county fails to Drn~ iaea n mCCCS applica~ mu irhin rhc time 5ame p~ ejcnidby M C C S rde. The mgh ewma lhblt far & e cost . of potcnddy AHCCCS c- cd xrrices f om ls hlat Sate that thc pcvrn should have bttn determined elifilc untiS thr date : hat the mmty no- cilia MCCCS ai the perm's dgixity. In guc& this r t n ~ t em akes counties ! i& bk for & e csts of emergency nedicel treatment pov. dcd ' y private Sospiral6 to ptsm who are " in hct eligiSe" far o l e subject to aotifisation by the hospitd to me county. lhlr sta? ute : eiciorte~ he residual liability creaud udsr 411- 31 eF3 $ 11- 291.01. Sll- 297. M( C) cne& n saunq" s reddual WE; Bj ' o a e t t hcs@ to a poh; prior w thu h 0 1 1 v ; ~ r~ ns w g t he county of a potcntbi indigmt'r cmcrpeny horpiirlizadco if rhe patiecc submitted nideac; of insurance which w u law dcwmined to bc invaid for the p y e s e for which tke patient was admit& 3362905.01 and 4 342903.02 Thm S - ~ ~ X CcrJa te Mires; residua! iiabbmy ! or b e ; pa& is hat ttbq p o d c iw m ~ t i boy ~ tht . AHCCCS Admkisr~ tiona ild nimburemeut by lho counrier - WCCCS inr the cost af nc& al scniccs ~ ronded by MCCCj o p c m % rcnv~ usky du& d ciigiale ? or . GCCa by be COQR~~~ X, la co.& i~ n, ae - tier sunsntly hare a broad md muhi- fasetrd residual Wcdky for jocEgecor health care which ? rd.. c! es I " sakq adU ad r a W r fcdcnl nainrcnlocr of & or. rqtirenet.;~, Tk: : eaiduaual ! iiibMty bc!&~; e r? u~~ ib8ityf m the cosu oi m ~ wce- ey pr ddac ; o Ip erran fiw the ) oint ha or she 3seu ' he 1981 corny ~ SgoZtym- darcis . J? to e point that : my mifiier hHaS' of ? ersc?' S AIICCCS cli$ Dility xpmilsu oi rhthrr tie gem eve: ample*&

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Home Testimony by the Honorable James D. Bruner, President County Supervisors Association Chairman,...

Testimony by the Honorable James D. Bruner, President County Supervisors Association Chairman, Board of Supervisors Maricopa County, before the Joint AHCCCS Ad Hoc Committee

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