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Tag: Arizona Health Care Cost Containment System

2nd lawsuit filed against AHCCCS over autism therapy contract dispute

Key Points:
  • Parents of 11 children filed a class action lawsuit against the state’s Medicaid agency
  • The complaint accuses the agency of unlawfully approving changes to provider networks
  • The dispute impacts children with autism spectrum disorder receiving applied behavioral analysis therapy

Another lawsuit has been filed against the Arizona Health Care Cost Containment System over contract disputes between insurance companies and two autism therapy centers.

Parents of 11 children with autism spectrum disorder filed a class action lawsuit against AHCCCS on Feb. 6, alleging the agency unlawfully approved changes to provider networks for two insurers: Mercy Care and Arizona Complete Health. The complaint follows another lawsuit filed by families and Centria Autism Center on Dec 15 against AHCCCS, Mercy Care and the Department of Economic Security. 

“AHCCCS’ decision to allow these private insurers to place their own profits over the treatment of low-income kids with autism is shocking,” said Tim Nelson, attorney for the 11 families, in a statement. “These companies have never retained enough autism providers for Medicaid beneficiaries, and waiting lists for families with autistic children were already way too long.”

The lawsuits were sparked by Mercy Care and Arizona Complete Health terminating contracts with Centria Autism and Action Behavior Centers, forcing many families to switch providers for their children’s applied behavioral analysis therapy. Centria and ABC allege Mercy Care terminated their contracts after the insurer attempted to reduce reimbursement rates for services without negotiating in good faith.

Arizona Complete Health terminated its contract with ABC around the same time Mercy Care began terminating contracts, though ABC staff allege that Arizona Complete Health terminated the contract without cause. The class action suit also alleges the insurer has not been assisting patients in finding new therapy providers. 

Applied behavioral analysis, known as ABA, is an increasingly popular form of therapy for children on the autism spectrum and is currently covered by the state’s Medicaid system. Parents of children who receive services from Centria and ABC are afraid that moving their children to unfamiliar therapy centers will cause their children to regress. 

Children with autism spectrum disorder are incredibly sensitive to change and parents of children attending Centria told the Arizona Capitol Times in November that their children have experienced regression as a result of disruptions to their ABA therapy. 

In court filings in the first lawsuit, AHCCCS argued that Mercy Care has openings for clinic-based and in-home ABA services for more than 1,000 of its members, more than the number of members losing access to Centria and ABC.

“Plantiffs’ declarations speak of their emotionally charged preferences and the worries they have about changing ABA providers …” attorneys for AHCCCS wrote on Jan. 9. “… the individual Plaintiffs’ concerns and attachment to Centria’s services (even if understandable) do not rise to the level of irreparable injury.” 

However, the class action suit filed on Feb. 6 argues that the parents’ resistance to switching ABA providers is not just about “emotionally charged preferences” but also about logistical issues such as transportation, a lack of providers with openings in rural areas and reduced hours for services. 

Attorneys for AHCCCS said the families and Centria had no dispute with the agency, but with Mercy Care, and a lawsuit against AHCCCS would not “achieve Plaintiffs’ desired outcome” because the agency cannot reinstate the contracts. 

Attorneys for the 11 families represented in the class action suit argue that allowing the insurers to terminate contracts with ABA providers not only violates state and federal law, but it could result in a wave of other insurers terminating contracts with ABA providers in Arizona. 

The contract terminations are set to take effect in March, leaving families little time to find new providers or a new insurer to cover their children’s ABA therapy. Both lawsuits ask the court to temporarily stay the effective dates while the cases play out, but a ruling on those requests has not yet been issued in either case. 

Parents turn to rulemaking agency over proposed age caps for disability services

Key Points:
  • Parents are raising concerns over cuts to the Arizona Long Term Care System 
  • The state Medicaid system is proposing age caps for caregiving services
  • Parents took their concerns to the Governor’s Regulatory Review Council on Nov. 25

Parents of children receiving services under the Arizona Long Term Care System are continuing to sound the alarm over potential age caps for Medicaid coverage of services for medically complex children and adults.

During a Nov. 25 meeting of the Governor’s Regulatory Review Council, 12 parents spoke against proposed rule changes for caregiving services for children and adults with developmental disabilities and complex medical needs. The Home and Community Based Services Needs Tool, created by the Arizona Health Care Cost Containment System, will determine state coverage for those services by age. 

The age caps stem from a budget shortfall due to the Parents as Paid Caregivers program within the Department of Economic Security’s Division of Developmental Disabilities. A standoff over the future of the program between legislative Republicans and Gov. Katie Hobbs ultimately ended with a mandate for AHCCCS to develop “a strengthened standardized assessment tool to determine the need for extraordinary care for minor children.” 

Any cuts to the program, including the proposed age caps, have been widely decried by parents and advocates. 

“We’re all here today because we care about families and doing what’s right, but we cannot wait for long-term reforms to fix the crisis that is harming families right now,” Melissa De Leon told GRRC. “Once these policies are finalized the damage becomes significantly harder to undo.” 

According to GRRC staff, 118 petitions were submitted to the council after AHCCCS announced policy statements in September imposing age caps for services. Responding to the backlash, Hobbs directed AHCCCS to delay implementation and submit an emergency rulemaking, which the agency did on Oct. 15. 

The emergency rulemaking allows the agency to take public comment from affected families, health care providers and other stakeholders into account while expediting the typical rulemaking process, which can sometimes take months or even over a year. 

AHCCCS is also developing an exception process to the new rules for children who require “extraordinary care” as part of the emergency rulemaking. Services affected by the emergency rulemaking include in-home care, bathing, eating and feeding, general supervision, and other round-the-clock care needed for individuals who cannot care for themselves. 

The Oct. 15 filing of the emergency rulemaking superseded the original policy statements and effectively rendered the petitions to GRRC moot, preventing the council from taking any action on them. The council can only revise, modify, or invalidate policy statements within its statutory authority, but it cannot use any of those options now that the policy statements are no longer being enforced by AHCCCS.

However, GRRC chair Jessica Klein allowed several parents to speak about the emergency rulemaking and the effects the potential cuts will have on their families. Most parents argued that the age caps proposed in the emergency rulemaking are arbitrary or even illegal under federal disability law. 

“The age does not determine a disability, it does not determine safety, it does not determine medical necessity, but the needs tool and the (Extraordinary Care Review) process use age as a deciding factor,” said Marissa Martinez, a parent of a disabled child receiving DDD services. 

Some suggested assessing eligibility based on the individual’s skills or needs and argued that the state is more focused on reducing the cost of caring for medically or developmentally complex individuals than on ensuring those individuals have adequate care. 

Other parents highlighted how the confusing and often convoluted nature of agency rulemaking has made it difficult for them to understand how their children and families will be affected by these changes.

Sara Goldsen told GRRC: “I really want to advocate for families that when all of this jargon and proposal come out, if you guys could include a plain English version — I understand you have to have all of your red tape — but if you could distill it into just basic English and in this state, frankly, basic Spanish, that would help families lessen anxiety and know what’s going on and what’s being proposed.” 

Klein emphasized to the parents present at the Nov. 25 meeting that GRRC has little authority to govern how or when AHCCCS conducts its emergency rulemaking, but said council members understood the concerns raised by their comments.

A representative from AHCCCS was also present at the meeting and told parents she would take the comments back to the agency for review and consideration. The public comment period on the emergency rulemaking ended on Nov. 24. 

However, AHCCCS will undertake a regular rulemaking to keep the new rules on the books long term, as emergency rules expire after 180 days, and expects to start that process in January. 

Ultimately, GRRC is likely to reject the 118 petitions filed over the policy statements, but it will review and provide final approval or denial of the regular rulemaking package when it is complete. 

New AHCCCS director says she is ready to tackle fraudulent billing

Key Points:
  • New Medicaid director vows to tackle fraudulent billing issues
  • Lawmakers scrutinize AHCCCS for alleged $650 million fraud scheme
  • Lawmakers seek to reduce administrative burden for ethical Medicaid providers

The new director of the state’s Medicaid program promised lawmakers that she will work to solve issues in fraudulent billing and a loss of access to health care with the long-scrutinized agency.

“The alarming situations of abuse, brokering and displacements of vulnerable individuals and sadly, even individuals who have died — It’s pretty overwhelming,” Ginny Roundtree, director of the Arizona Health Care Cost Containment System, told lawmakers at a Senate Health and Human Services Committee on Nov. 12. “The members that we serve are the most important. They’re the highest priority.”

Lawmakers have been examining AHCCCS for months to address growing reports of fraudulent claims tied to resident treatment facilities targeting Native American and homeless patients. That includes an alleged $650 million scheme with at least 41 substance abuse treatment clinics cited by the U.S. Department of Justice to have been committed by Jarar Ali, the owner of Pakistan-based ProMD Solutions.

Ali is alleged to have submitted $650 million in false and fraudulent claims to AHCCCS for addiction treatment services that were not provided, resulting in the agency paying $564 million. Senators on the Health and Human Services Committee say this kind of behavior became far too common, leading to nearly $2.8 billion in Medicaid billing fraud while 140,000 patients were disenrolled from the program and struggled to receive care. 

“Arizona families and providers deserve honesty, transparency, and meaningful corrective action,” said Health Committee Chairwoman Sen. Carine Werner, R-Scottsdale. 

The hearing was the third this year organized by Werner to examine how fraud has impacted AHCCCS and Arizona patients. It was also the first time a director of the agency spoke to the committee, after Gov. Katie Hobbs appointed Roundtree as the agency’s director on Oct. 6. AHCCCS had been operating with an interim director since April. 

“Ginny is a dedicated leader with a deep understanding of the challenges and opportunities in health care,” Hobbs said of Roundtree’s appointment. “Her expertise and passion for serving our community prepared her to lead this critical agency. I’m confident she will help us protect and enhance vital health care for everyday Arizonans.”

Roundtree said she is looking to bring in outside resources who are knowledgeable about the billing claims process to help her staff address a backlog of claims and get health care providers paid. 

“There’s a lot to do and I understand the urgency and priority,” Roundtree said. 

Since Roundtree was appointed, health care providers are already reporting a better working relationship with AHCCCS, said Michelle Coldwell, director of public policy at the Arizona Council of Human Service Providers.

The council now has a working group with AHCCCS that meets regularly to discuss pre-authorization issues —the process of determining which health care services are covered by Medicaid prior to treatment. Coldwell said the council is planning to launch a behavioral health training catalyst program in partnership with AHCCCS by next spring. 

“There’s still work to be done,” Coldwell said. “But the progress made over the last several months is encouraging.”

Some lawmakers have expressed concern about the AHCCCS pre-payment review process, in which the agency will withhold payments to health care providers to identify claims that might not be medically necessary or require additional information before the agency pays providers. 

Sen. Hildy Anguis, R-Bullhead City, said the agency’s pre-payment review process with fraud claims can be overly long, taking up to a year in some cases, while the agency treats a provider as “guilty until proven innocent.”

“It ain’t working. It’s just not working,” Anguis said.

Werner said the Legislature will be looking at ways to reduce the administrative burden for ethical Medicaid providers while AHCCCS recalibrates its internal processes in its mission to reduce fraudulent billing after two providers serving more than a combined 5,700 patients had to close practices in Arizona this week alone. 

“We are demanding a lot from providers without any alignment in reimbursements, causing an already fragile system to shutter,” Werner said. 

Battle royale over childhood disabilities programs continues

Gov. Katie Hobbs lashed out Feb. 26 at Republican lawmakers, accusing them of using families with children with developmental disabilities as “pawns” in the fight over the budget.

“Their negligence is jeopardizing the health, independence and lives of more than 50,000 Arizonans with disabilities and autism, intellectual disability and cerebral palsy who depend on DDD for health services and support for independent living,” the governor told members of the Arizona Disability Advocacy Council who were meeting at the Capitol. She said the program immediately needs $122 million or it will not be able to pay providers by May.

“Funding for DDD is under threat because the legislative majority has decided that they want to use the people in this room as political pawns rather than serve you and do their job,” she said.

But Rep. David Livingston, who heads the House Appropriations Committee, said there’s a simple reason the program is running out of funds: the governor overspent her authorized budget.

“The Legislature was never consulted before these funds were spent,” he said in an open letter this week to the governor. “Yet now taxpayers are being asked to cover the consequences.”

At the heart of the funding problem is a program that provides funds for parents who serve as caregivers for their own children.

That program did not exist until 2020, when federal officials agreed to finance it entirely with Medicaid dollars. That was designed to help address the difficulty some families faced in finding caregivers during the Covid outbreak.

The problem is that most of those federal dollars are disappearing, but Hobbs has continued the program anyway.

The governor, by contrast, has insisted that everyone — including the Republican-controlled Legislature when it adopted a new budget for the current year — understood that the state would pick up the difference.

Yes, she acknowledged, there is a shortfall. But Hobbs said that’s due entirely to unanticipated growth in the entire developmental disabilities program.

And that has led to the current stalemate — and war of words — with Hobbs hoping to build public support by saying all this is an emergency and speaking publicly, with TV cameras present, to an audience who brought their children with disabilities to hear her. 

“It does not matter how many times they try to spin it,” the governor said. “They are trying to put the blame for this on me and it is squarely on them.”

She said the solution is simple: allocate more money right now. In fact, Hobbs said she sent them a budget in January not just for the new fiscal year that begins July 1, but also to provide the needed funds for the balance of this budget year.

“If they have other ideas, they should give me a budget instead,” Hobbs said. “If you don’t like the budget I presented, then send me your budget.”

Livingston said that simply providing more dollars because, as he puts it, the governor overspent, is not an option. What is needed, he said, is “serious, responsible discussions.”

“Rather than engaging with the Legislature in good faith, you and your staff have chosen to issue public statements, assign blame, and demand more taxpayer dollars — without addressing the broken system that led us here,” he wrote to the governor.

Hobbs, for her part, said that she had sent them her proposal and that the next move was up to the Legislature.

“I haven’t seen one plan from them,” she said. “Why would I negotiate with them if I don’t even know what they want?”

And Hobbs sniffed at the idea that there’s something unusual in a governor asking for supplemental funding in the middle of a budget year. She pointed out that such requests are not only routine but also granted, as happened two years ago when funding fell short for the universal voucher program that provides tax dollars for parents to send their children to private and parochial schools as well as have their own home schools.

“The same legislators who rubber stamped supplemental funding year after year, who haven’t batted an eye at the blank checks being written for pet projects, today are refusing to fund critical services for Arizona’s most vulnerable population,” Hobbs said.

This fight over funding disability programs is likely just the start of a larger battle over what happens in Arizona if and when Medicaid funds dry up.

The Arizona Health Care Cost Containment System, the state’s Medicaid program, provides care for those up to 138% of the federal poverty level, about $35,100 for a family of three. The feds pick up about three-fourths of the cost.

More than 2 million Arizonans currently receive care from one or more of the AHCCCS programs.

But the Republican-controlled Congress is moving to make cuts in Medicaid funding, leaving Arizona holding the financial bag in what, even with federal funding, is among the largest single item expenses at $2.6 billion of the $17 billion state budget.

“It is something that is looming,” Hobbs said Feb. 26.

“The hospitals and everyone are sounding the alarm,” she said, particularly rural hospitals, which might have to close because they could not bear the cost of uncompensated health care.

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