Wednesday, April 15, 2009

Legislative Inaction Costing the State

Around the Legislature, Republicans like to talk about “protecting taxpayer money” or about “eliminating wasteful spending.” But here on tax day, when they are holding tea parties around the state, those same Republicans are wasting another $6,400. What am I talking about? I am talking about the daily interest penalty that the state is incurring for every day that the Legislature sits around and does nothing toward changing the redetermination period for childless adults from current 6 month period back to a 12 month period.

As part of the Federal Stimulus Package, Arizona received a lifeline to our $3 billion budget hole. A key component of that was the increase in the federal medical assistance percentage or FMAP monies the state received. Specifically, Arizona can potentially draw down approximately $1.6 billion through an enhanced FMAP though 2010.

However, in order to be eligible for these enhanced Medicaid dollars, the federal stimulus included a “maintenance of effort (MOE)” provision that prohibited states from enacting “eligibility standards, methodologies or procedures” that are more restrictive than those in effect on July, 1 2008.

In March, AHCCCS received its first draw of enhanced FMAP in the amount of approximately $286 million. Around that same time, the federal government notified AHCCCS that the redetermination included in the original FY09 budget passed last June violated the MOE provision of the federal stimulus bill.

On March 20th, Governor Brewer wrote the letter to the Department of Health and Human Services (HHS) asking it to reconsider this decision. In a letter to Governor Brewer dated April 2nd, the HHS affirmed its support of the original CMS decision that the change in the redetermination period put Arizona out of compliance with MOE provisions which disqualified Arizona for the increased FMAP monies.

The good news is that we still have time to change the redetermination period as long as it is done before July 1, 2009. The bad news is that we are probably going to be charged interest penalties on the $286 million in FMAP that we have already drawn down until we comply with the MOE requirements.

So, every day that the Legislature does nothing, the state incurs another $6,400.00.
That means, in the 3 weeks since the State drew down this money, the Legislature has already wasted approximately $135,000.

And the worst part about this is that we all know that whatever budget comes out, the redetermination issues will be fixed because the state has to have this money.

So why aren’t we fixing it. I don’t know. You will have to ask the Republicans. Democrats are tired of sitting around waiting for the Republicans to act.

Today, I will ask President Burns to allow the late introduction of a bill to fix this issue. It is a simple change.

And it is about time that Legislature stopped sitting around. We can solve this problem today and we can stop needlessly wasting taxpayer money by acting on this very simple change. We need every dollar we have and we cannot sit around while thousands of dollars a day are being wasted.

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