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SPECIAL TERMS AND CONDITIONS ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM (AHCCCS ) SPECIAL TERMS AND CONDITIONS

ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM (AHCCCS )

MEDICAID SECTION 1115 DEMONSTRATION



NUMBER: 11-W-00032/09

TITLE:
Arizona Health Care Cost Containment System -- AHCCCS, A Statewide
Approach of Cost Effective Health Care Financing

AWARDEE: Arizona Health Care Cost Containment System


The following special terms and conditions apply to the project:

1.
The State of Arizona will continue to provide access to Arizona Long Term Care System
(ALTCS) services to American Indians on the reservation as it does to other citizens of
the State.

2.
The State will conduct a comprehensive medical audit of all plans between October 1 and
September 30 of each year and prepare a report to be submitted to the Centers for
Medicare and Medicaid Services (CMS) by July 31 of the following year.

3.
The State will not deny Medicaid eligibility for any potentially disabled individual based
on using PAS criteria in lieu of the SSI-disability determination. Prior to rendering a
final decision of ineligibility based on disability, the State will use the SSI criteria as
required under section 1902(a)(10) interpreted through Federal regulations at sections
435.120 and 435.601.

4.
Effective October 1, 1999, the provision of home- and community-based services
(HCBS) to the elderly and physically disabled (EPD) will no longer be capped. In the
absence of a limit, AHCCCS will report annually on current placements and ongoing
activities for expanding HCB services and settings. The report will be due by March 31
of each year.

5.
The State will submit quarterly progress reports on the encounter data collection process
as well as on the quality improvement initiative. These reports are due 60 calendar days
after the end of each quarter.

AHCCCS will submit all identified reports for the Quality Improvement Initiative, based
on agreements between CMS and AHCCCS regarding report content, reporting frames,
and submission schedules.



6.
The State will submit quarterly progress reports, which are due 60 calendar days after the
end of each quarter. The reports should include a discussion of events occurring during
the quarter that affect health care delivery, quality of care, access, financial results, and
other operational issues. The report should also include proposals for addressing any
problems identified in the quarterly report. The intent of the report is to present the
State's analysis and status of the various operational areas.

7.
The Department of Economic Security/Developmental Disabilities Division (DES/DDD)
will comply with all contractual and reporting requirements as specified in the Request
for Proposal (RFP) between AHCCCS and DES/DDD and in any subsequent
amendments. DES/DDD will be sanctioned as specified in the RFP if DES/DDD fails to
comply with the stated contractual and reporting requirements. All comparable
requirements will apply to the relationship between AHCCCS and the Department of
Health Services/Behavioral Health Services (ADHS/BHS).

8.
The State will enforce financial penalties on individual health plans and on LTC program
contractors that are not complying with data collection requirements.

9.
The State will take appropriate action to correct deficiencies identified in the collection of
100 percent encounter data. Steps to be taken will include, at a minimum, data validation
studies to determine problems that exist at health plans, technical assistance to plans to
correct problems, and sanctioning plans for failure to meet the allowable error rates
imposed by CMS. Failure to undertake these activities will result in CMS withholding up
to 0.25 percent of Federal matching funds for the current contract year. CMS will inform
AHCCCS in writing that it did not carry out the encounter data requirement, specifying
what needs to be done, and giving AHCCCS 90 days to correct the deficiency before
payments are reduced by 0.25 percent in matching funds for the year. For FY 2002, the
effectiveness of AHCCCS' actions will be determined based on the error rates for acute
care data and LTC data for the period October 1, 1999 through September 30, 2000, and
on the error rates for behavioral health data for the period October 1, 1999 through
September 30, 2000. For FY 2003 through FY 2006, these baseline years will advance
by one year for each year. AHCCCS' actions will be considered ineffective if error rates
exceed the following, over all plans:

ERROR RATES

Criterion Institutional Professional


Omission 6.9% 11.9%
Timeliness 12.8%*
Correctness 12.9%*



* Does not include hospital or LTC data.



If AHCCCS' actions are ineffective, CMS may immediately invoke the withhold. Failure
to conduct and complete the data validation studies on schedule will also be the basis for
invoking the withhold.

10.
The allowable error rate for encounter data for all AHCCCS contractors will be 5 percent.
Penalty sanctions will be imposed by AHCCCS on all contractors that exceed this error
rate.

11.
By January 15 of each year, the State will submit a draft annual report, documenting
accomplishments, project status, quantitative and case study findings, and policy and
administrative difficulties for the fiscal year ended the previous September 30, and a
revised annual report incorporating CMS s comments within 30 days of receipt of these
comments.

12.
AHCCCS will submit to CMS a summary of financial and operational reviews of
AHCCCS Health Plans and ALTCS Program Contractors immediately upon completion.
In addition, AHCCCS will submit separate summaries of financial and operational
reviews that it conducts of DES/DDD and of ADHS/BHS.

13.
The State will forward summaries of the financial and operational reviews that
ADHS/BHS completes on the Regional Behavioral Health Authorities (RBHAs), as well
as summaries of any reviews AHCCCS conducts of ADHS/BHS. The State will also
forward summaries of any comparable information prepared by or pertaining to
DES/DDD.

14.
AHCCCS will require the same level of quality reporting for DES/DDD and ADHS/BHS
as for Health Plans and Program Contractors, subject to the same time lines and penalties.

15.
Each year, AHCCCS will monitor and ensure that for each contract year, the DES/DDD
and the ADHS/BHS have provided the appropriate State match necessary to draw down
the FMAP for title XIX services provided, respectively, to ALTCS eligible persons and
to AHCCCS eligible persons enrolled with ADHS/BHS. Specifically, AHCCCS and
DES/DDD entered into an Intergovernmental Agreement, effective July 1, 1998, whereby
DES/DDD transfers to AHCCCS the total amount appropriated for the State match for
title XIX ALTCS expenditures. Likewise, AHCCCS and ADHS/BHS entered into an
Intergovernmental Agreement, effective July 1, 1999, whereby ADHS/BHS transfers to
AHCCCS the total amount appropriated for the State match for title XIX expenditures.
AHCCCS deposits the monies transferred into an Intergovernmental Fund from which
AHCCCS has sole disbursement authority.

16.
AHCCCS will report on a comparison of revenues and costs associated with the DES
Interagency Agreement, including how any excess revenues are spent. AHCCCS will
also report this information for ADHS/BHS. Both reports will be due by January 15 of
each year for the State fiscal year ending the previous June 30.

17.
Before contracting with any provider of service, the State will obtain from the provider
full disclosure of ownership and control and related party transactions, as specified in


sections 1124 and 1902(a)(38) of the Act. No Federal financial participation (FFP) will
be available for providers that fail to provide this information.

18.
CMS will utilize the rate-setting method specified below.

The Federal match for acute-care and ALTCS services will be based on the actual
capitation rates AHCCCS negotiates with each provider. Thirty days before the effective
date, the acute-care rates and ALTCS rates that AHCCCS negotiates with each provider
should be submitted to CMS for review and approval.

19.
CMS retains the right to renegotiate rate-setting methodologies used by the AHCCCS and
ALTCS programs during the period of the award if the assumptions or projections used in
the methodologies are not in reasonable alignment with national projections or with any
uniform restriction on Federal matching that applies to all title XIX programs.

20.
At any phase of the project, including at the project's conclusion, AHCCCS, if so
requested by the project officer, must submit to CMS analytic data file(s), with
appropriate documentation, representing the data developed/used in end-product analyses
generated under this award. The analytic file(s) may include primary data collected,
acquired, or generated under the award and/or data furnished by CMS. The content,
format, documentation, and schedule for producti