Douglas A. Ducey, Governor Thomas J. Betlach, Director

August 25, 2017

The Honorable Steve Yarbrough Arizona State Senate
1700 W. Washington
Phoenix, AZ 85007

The Honorable J.D. Mesnard Speaker of the House
Arizona House of Representatives 1700 W. Washington
Phoenix, AZ 85007

SUBJECT:  FY 2017 13th Month Appropriation Status Report

Dear President Yarbrough and Speaker Mesnard:

Pursuant

to  A.R.S.

§’s  36-29

0  and  36-2994,  enclosed  is   the

Arizona  Health  Care

Cost

Containment System’s (AHCCCS) Appropriation Status Report (ASR) for the period ended June 99, 2017.

Status Summary – AHCCCS is forecasting a FY 2017 surplus of $121.1 million Total Fund

($9.8 million General Fund) on a total FY 2017 appropriation ($1.751 billion General Fund).

of  $11.7  billion Total

Fund

This  report reflects

expenditures  and  transfers  through  the “13th

Month”.  AHCCCS  will be

utilizing surplus funding to administratively adjust other expenditures with dates of service  from

FY  2017.	The   projected   surplus   amounts  in  this administrative adjustments.

report   include   projections  of

those

If you have any questions about this report, please do not hesitate to call me at (602) 417-4111 or Jeffery Tegen at (602) 417-4705.

Sincerel ,

Thomas J. Betlach Director

Enclosure

801 East Jefferson, Phoenix, AZ 85034 • PO Box 25520, Phoenix, AZ 85002 • 602-417-4000 • www.azahcccs.gov

The Honorable Steve Yarbrough The Honorable J.D. Mesnard August 25, 2017
Page 2

cc:	The Honorable Douglas A. Ducey, Governor
The Honorable, Debbie Lesko, Chairman, Senate Appropriations Committee The Honorable Don Shooter, Chairman, House Appropriations Committee
The Honorable Nancy Barto, Chairman, Senate Health and Human Services Committee The Honorable Heather Carter, Chairman, House Health Committee
Matthew Gress, Director, Governor’s Office of Strategic Planning and Budgeting Richard Stavneak, Director, Joint Legislative Budget Committee

Appropriation Status Report (ASR)
Fiscal Year 2017
Through June 99, 2017

Prepared by: Division of Business and Finance

Appropriation Status Report
Table of Contents
APPROPRIATED SOURCES AND USES OF FUNDS	Page
Summary of Appropriated Expenditures for SFY 2017…	2
Appropriated Expenditures by Funding Source…	3
Appropriated Revenue Received Detail Schedule…	5
FOOTNOTES	7
CASELOAD AND EXPENDITURES BY RATE CODE	11

Appropriation Status Report
Appropriated Sources and Uses of Funds

ARIZONA  HEALTH  CARE  COST  CONTAINMENT SYSTEM
FY 2017 APPROPRIATION STATUS REPORT
For the Period Ending June 99,  2017
SUMMARY OF APPROPRIATED EXPENDITURES

	

ANNUAL APPROPRIATION		(A)      EXPENDITURE PLAN
YTD		(B)

EXPENDITURES YTD		(A) - (B)

VARIANCE YTD		
PROJECTED ANNUAL EXPENDITURES		

ANNUALIZED VARIANCE		

APPROPRIATIONS:													
ADMINISTRATION													
AHCCCS Operating Lump Sum	$	102,048,900		$	106,048,900		$	90,679,603		$	15,369,297		$	102,048,900		$	-		
AHCCCS Prop 204 Administration	18,666,600		18,666,600		15,098,806		3,567,794		18,666,600		-		
DES Eligibility	88,874,500		88,874,500		73,700,922		15,173,578		88,874,500		-		
DES Prop 204 Eligibility	44,358,700		44,358,700		39,238,752		5,119,948		44,358,700		-		
TOTAL  ADMINISTRATION	 	253,948,700 		 	257,948,700 		 	218,718,082 		 	39,230,618 		 	253,948,700 		 	-			

Traditional Medicaid Services	3,757,694,400	3,757,694,400	3,561,224,044	196,470,356	3,708,006,699	49,687,701	
Proposition 204 Services	2,693,529,300	2,693,529,300	2,651,418,751	42,110,549	2,687,242,907	6,286,393	
ACA Adult Expansion	436,402,900	436,402,900	432,054,549	4,348,351	436,402,900	-	
Children's Rehabilitative Services	280,814,200	280,814,200	265,087,448	15,726,752	278,729,520	2,084,680	
KidsCare Services	61,180,800	61,180,800	23,717,252	37,463,548	23,894,746	37,286,054	
ALTCS Services	1,439,188,100	1,439,188,100	1,383,824,122	55,363,978	1,430,587,609	8,600,491	
Disproportionate Share Payments	5,087,100	5,087,100	4,202,300	884,800	5,087,100	-	
Rural Hospitals	22,650,000	22,650,000	22,650,000	-	22,650,000	-	
Voluntary Political Subdivision Programs	469,609,000	344,786,300	344,786,303	(3)	469,609,000	-	
Behavioral Health Traditional Medicaid Services	1,157,271,200	1,157,271,200	1,150,212,984	7,058,216	1,150,212,984	7,058,216	
Behavioral Health Proposition 204 Services	723,910,100	723,910,100	720,697,332	3,212,768	720,697,332	3,212,768	
Behavioral Health ACA Adult Expansion	81,143,500	81,143,500	79,004,313	2,139,187	79,004,313	2,139,187	
Behavioral Health CMDP	177,266,400	177,266,400	172,511,172	4,755,228	172,511,172	4,755,228	
Non Medicaid Seriously Mentally Ill Services	78,846,900	78,846,900	78,680,865	166,035	78,846,900	-	
Supported Housing	5,324,800	5,324,800	5,237,844	86,956	5,324,800	-	
Crisis Services	16,391,300	16,391,300	16,332,629	58,671	16,391,300	-	

TOTAL PROGRAMMATIC	 	11,406,310,000	 	11,281,487,300	 	10,911,641,907	 	369,845,393	 	11,285,199,281	 	121,110,719 

TOTAL EXPENDITURES

$	11,660,258,700

$  11,539,436,000

$  11,130,359,990

$	409,076,010

$   11,539,147,981

$	121,110,719

2

ARIZONA  HEALTH  CARE  COST  CONTAINMENT SYSTEM
FY 2017 APPROPRIATION STATUS REPORT

ANNUAL APPROPRIATION	(A)      EXPENDITURE PLAN
YTD	(B)

EXPENDITURES YTD	(A) - (B)

VARIANCE YTD	
PROJECTED ANNUAL EXPENDITURES	

ANNUALIZED VARIANCE	

STATE - GENERAL FUND		
Administrative Expenditures	$	58,901,000	$	58,901,000	$	53,697,666	5,203,334	$	58,901,000	$	-	
Proposition 204 - Administrative Expenditures	21,746,500	21,746,500	19,028,167	2,718,333	21,746,500	-	

Programmatic Expenditures							
Traditional Medicaid Services Proposition 204 Services	827,655,600
-	827,655,600
-	796,413,764
-	31,241,836
-	827,655,600
-	-
-	
Children's Rehabilitative Services	84,424,100	84,424,100	74,833,156	9,590,944	82,339,420	2,084,680	
KidsCare Services	-	-	(30,495)	30,495	-	-	
ALTCS Services	167,841,100	167,841,100	167,838,172	2,928	167,841,100	-	
DSH and Rural Hospitals	7,239,300	7,239,300	6,967,100	272,200	7,239,300	-	
Behavioral Health Traditional Medicaid Services	324,968,100	324,968,100	321,004,189	3,963,911	321,004,189	3,963,911	
Behavioral Health Proposition 204 Services	103,150,500	103,150,500	99,949,520	3,200,980	99,949,520	3,200,980	
Behavioral Health ACA Adult Expansion	1,931,900	1,931,900	1,836,566	95,334	1,836,566	95,334	
Behavioral Health CMDP	54,770,500	54,770,500	54,277,708	492,792	54,277,708	492,792	
Non Medicaid Seriously Mentally Ill Services	78,846,900	78,846,900	78,680,865	166,035	78,846,900	-	
Supported Housing	5,324,800	5,324,800	5,237,844	86,956	5,324,800	-	
Crisis Services	 	14,141,100	 	14,141,100	 	14,082,429 	 	58,671 	 	14,141,100	 	- 	
TOTAL GF EXPENDITURES	1,750,941,400	1,750,941,400	1,693,816,649	57,124,751	1,741,103,702	9,837,697	

FEDERAL		
Administrative Expenditures	131,522,400	135,522,400	110,221,861	25,300,539	131,522,400	-	
Proposition 204 - Administrative Expenditures	37,715,500	37,715,500	32,636,916	5,078,584	37,715,500	-	

Programmatic Expenditures	
Traditional Medicaid Services	2,192,740,600	2,192,771,800	2,069,080,815	123,690,985	2,184,997,319	7,743,281	
Proposition 204 Services	2,312,463,100	2,312,463,100	2,286,640,943	25,822,157	2,312,463,100	-	
ACA Adult Expansion	430,324,100	430,324,100	425,979,767	4,344,333	430,324,100	-	
Children's Rehabilitative Services	196,390,100	196,390,100	190,254,293	6,135,807	196,390,100	-	
KidsCare Services	60,810,800	60,810,800	23,377,747	37,433,053	23,524,746	37,286,054	
ALTCS Services and Nursing Facility Assessment	894,587,700	894,587,700	860,706,208	33,881,492	894,587,700	-	
DSH and Rural Hospitals	20,497,800	20,497,800	19,885,200	612,600	20,497,800	-	
Behavioral Health Traditional Medicaid Services	796,737,300	796,737,300	794,032,648	2,704,652	794,032,648	2,704,652	
Behavioral Health Proposition 204 Services	599,490,000	599,490,000	599,478,212	11,788	599,478,212	11,788	
Behavioral Health ACA Adult Expansion	79,028,900	79,028,900	76,985,047	2,043,853	76,985,047	2,043,853	
Behavioral Health CMDP	122,495,900	122,495,900	118,233,464	4,262,436	118,233,464	4,262,436	
Voluntary Political Subdivision Programs - See Note 5	 	323,477,800 	 	237,215,500 	 	237,215,491 	 	9 	 	323,477,800 	 	- 	
TOTAL FEDERAL EXPENDITURES	8,198,282,000	8,116,050,900	7,844,728,612	271,322,288	8,144,229,936	54,052,064	

COUNTY		
Administrative Expenditures Proposition 204 - BNCF	3,563,300	3,563,300	2,672,475	890,825	3,563,300	-	
Traditional Medicaid Services Acute Care	49,687,700	49,687,700	49,687,700	-	49,687,700	-	
ALTCS Services	 	249,980,000 	 	249,980,000 	 	237,100,934 	 	12,879,066 	 	249,980,000 	 	- 	
TOTAL COUNTY EXPENDITURES	303,231,000	303,231,000	289,461,109	13,769,891	303,231,000	-	

For the Period Ending June 99, 2017 APPROPRIATED EXPENDITURES BY FUNDING SOURCE

Programmatic Expenditures

3

ARIZONA  HEALTH  CARE  COST  CONTAINMENT SYSTEM
FY 2017 APPROPRIATION STATUS REPORT
For the Period Ending June 99, 2017 APPROPRIATED EXPENDITURES BY FUNDING SOURCE

	(A)	(B)	(A) - (B)			
	EXPENDITURE			PROJECTED		
ANNUAL	PLAN	EXPENDITURES	VARIANCE	ANNUAL	ANNUALIZED	
APPROPRIATION	YTD	YTD	YTD	EXPENDITURES	VARIANCE	

	TOBACCO FUNDS		

Programmatic Expenditures			
Traditional Medicaid Services - Medically Needy		37,432,400	37,432,400	36,866,554	565,846	36,522,156	910,244	
Behavioral Health Traditional Medicaid Services - Medically Needy		35,565,800	35,565,800	35,176,146	389,654	35,176,146	389,654	
Proposition 204 Services - Emergency Health Services		18,747,200	18,747,200	18,747,200	-	18,747,200	-	
Proposition 204 Services - Proposition 204 Protection		16,251,400	16,251,400	16,251,400	-	16,251,400	-	
Behavioral Health Proposition 204 Services - Proposition 204 Protection		21,269,600	21,269,600	21,269,600	-	21,269,600	-	
Proposition 204 Services - ATLSF	 	100,000,000 	 	100,000,000 	 	100,000,000 	 	- 	 	100,000,000 	 	- 	
TOTAL TOBACCO EXPENDITURES	229,266,400	229,266,400	228,310,900	955,500	227,966,502	1,299,898	

Administrative Expenditures Prescription Drug Rebate Program
Programmatic Expenditures	

OTHER

500,000	

500,000	460,997	39,003	500,000	-	
Acute Care - Prescription Drug Rebate Program State Match	105,837,600	105,837,600	105,837,600	-	105,837,600	-	
Acute Care - Prescription Drug Rebate Program Federal Authority	544,114,600	544,114,600	502,764,847	41,349,753	502,764,846	41,349,754	
Long Term Care - Prescription Drug Rebate Program State Match	7,441,300	7,441,300	7,441,300	-	7,441,300	-	
Long Term Care - Prescription Drug Rebate Program Federal Authority	42,338,000	42,338,000	33,346,728	8,991,272	33,346,728	8,991,272	
Proposition 204 Services - Hospital Assessment	246,067,600	246,067,600	229,779,208	16,288,392	239,781,208	6,286,392	
ACA Adult Expansion - Hospital Assessment	6,078,800	6,078,800	6,074,782	4,018	6,078,800	-	
Behavioral Health ACA Adult Expansion - Hospital Assessment	182,700	182,700	182,700	-	182,700	-	
Traditional Medicaid Services - TPL	194,700	194,700	510,277	(315,577)	510,277	(315,577)	
ALTCS Services - TPL	-	-	1,083,595	(1,083,595)	1,083,595	(1,083,595)	
ALTCS Services - Nursing Facility Assessment	77,000,000	77,000,000	76,307,185	692,815	76,307,186	692,814	
KidsCare Services Premiums	370,000	370,000	370,000	-	370,000	-	
Freedom to Work Premiums	31,200	-	62,488	(62,488)	31,200	-	
Crisis Services - Substance Abuse Services Fund	2,250,200	2,250,200	2,250,200	-	2,250,200	-	
Voluntary Political Subdivision Programs - See Note 5	 	146,131,200 	 	107,570,800 	 	107,570,812 	 	(12)	 	146,131,200 	 	- 	
TOTAL OTHER EXPENDITURES	1,178,537,900	1,139,946,300	1,074,042,720	65,903,580	1,122,616,841	55,921,100	

TOTAL		
Administrative Expenditures	253,948,700		257,948,700		218,718,082		39,230,618		253,948,700		-	
Acute Care	9,967,121,900		9,842,299,200		9,527,817,785		314,481,415		9,854,611,672		112,510,228	
Long Term Care	 	1,439,188,100 		 	1,439,188,100 		 	1,383,824,123 		 	55,363,977 		 	1,430,587,609 		 	8,600,491 	
TOTAL EXPENDITURES	  $	11,660,258,700 		  $	11,539,436,000 		  $	11,130,359,990 		  $	409,076,010 		  $	11,539,147,981 		  $	121,110,719 	

4

ARIZONA  HEALTH  CARE  COST  CONTAINMENT  SYSTEM
FY 2017 APPROPRIATION STATUS REPORT
APPROPRIATED REVENUE AND OTHER COLLECTIONS RECEIVED DETAIL SCHEDULE
For the Period Ending June 99, 2017

BUDGET

BUDGET YTD

RECEIPTS YTD

GENERAL FUND:
Traditional Medicaid Services & Administrative	$	978,220,000	$	978,220,000	$	931,911,685	
Proposition 204 Services & Administrative	21,746,500	21,746,500	140,247,287	
KidsCare Services	-	-	(30,495)	
ALTCS Services	167,841,100	167,841,100	167,838,172	
Behavioral Health Traditional Medicaid Services	 	583,133,800	 	583,133,800	 	473,283,034 	
TOTAL	1,750,941,400	1,750,941,400	1,713,249,683	

FEDERAL:
Acute & Administrative	5,645,131,400		5,562,900,300		5,622,866,127	
KidsCare Services	60,810,800		60,810,800		22,858,887	
ALTCS Services	894,587,700		894,587,700		922,107,559	
Behavioral Health Traditional Medicaid Services	 	1,597,752,100 		 	1,597,752,100 		 	1,588,253,550 	
TOTAL	8,198,282,000		8,116,050,900		8,156,086,123	

COUNTY:						
Acute & Administrative	53,251,000		53,251,000		52,992,201	
ALTCS Services	 	249,980,000 		 	249,980,000 		 	249,980,000 	
TOTAL	303,231,000		303,231,000		302,972,201	

TOBACCO FUNDS:						
Traditional Medicaid Services	72,998,200		72,998,200		72,042,700	
Proposition 204 Services	 	156,268,200 		 	156,268,200 		 	134,998,600 	
TOTAL	229,266,400		229,266,400		207,041,300	

OTHER:

Administrative	500,000		500,000		460,997	
Acute Care - Prescription Drug Rebate Program	649,952,200		649,952,200		608,602,447	
Long Term Care - Prescription Drug Rebate Program	49,779,300		49,779,300		40,788,028	
Hospital Assessment	252,329,100		252,329,100		264,478,005	
ALTCS - Nursing Facility Assessment	77,000,000		77,000,000		24,296,978	
Acute TPL - Note 1	194,700		194,700		510,277	
LTC TPL - Note 1	-		-		1,083,595	
KidsCare TPL - Note 1	-		-		975	
Member Premiums - CHIP	370,000		370,000		2,617,518	
Member Premiums - Freedom to Work	31,200		-		62,488	
Behavioral Health Traditional Medicaid Services	2,250,200		2,250,200		5,027,267	
Voluntary Political Subdivision - State Match	 	146,131,200 		 	107,570,800 		 	186,438,677 	
TOTAL	1,178,537,900		1,139,946,300		1,134,367,252	

TOTAL REVENUE

$	11,660,258,700

$	11,539,436,000

$	11,513,716,559

5

Appropriation Status Report
Footnotes

ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM
FY 2017 APPROPRIATION STATUS REPORT
For the Period Ending June 99, 2017	
Note 1:    Third Party Liability Collections:	June 99, 2017	June 99, 2016	July 1, 2016		July 1, 2015	
Gross Collections:	June 99, 2017		June 99, 2016	
Acute	$	-	$	-	$	5,542,690		$	5,490,063	
LTC	-	-	4,764,758		3,339,609	
KidsCare	-	-	4,878		133,263	
Total TPL Collections	$	-	$	-	$	10,312,326		$	8,962,935	

AHCCCS Net Collections (Net of Federal Share): Expenditure Offsets:	
Acute	$	-	$	-	$	510,277		$	482,752		
LTC	-	-	1,083,595		780,010		
KidsCare	-	-	975		26,508		
Total Expenditure Offsets	$	-	$	-	$	1,594,847		$	1,289,270		

FY 17 Total
Note 2:    Authorized Positions	1,141.2
Actual Positions as of June 30, 2017	1,065.0

7

ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM
FY 2017 APPROPRIATION STATUS REPORT
For the Period Ending June 99, 2017

Note 3:	Intergovernmental Service Agreement - State of Hawaii:		
	Beginning Balance July 1, 2016	$	1,933,160	
	Revenues	7,052,293	
	Transfers-In	 	2,457,764 	
	Total Revenues	 	9,510,056 	
	Expenditures	6,701,714	
	Transfers-out	 	2,285,461 	
	Total Expenditures	 	8,987,175 	
	Ending Balance June 99, 2017	  $	2,456,040 	

Of the $2,456,040 ending balance, $796,247 represents restricted cash for prepaid expenses from the State of Hawaii for the projected expenditures through July 2017.

Note 4:

Summary of HHS Office of Inspector General Questioned Costs.
Schedule of Outstanding Liabilities
As of June 99, 2017
Description	Amount

School Based Claiming Direct Services Costs	19,923,489	HHS-OIG

Type

Note 5:

Summary of Voluntary Political Subdivision Contribution Expenditures:

As of June 99, 2017 Expenditures

State Match	Federal	Total

DSH Voluntary	$	7,448,849	$	16,104,917	$	23,553,767	
GME Voluntary	70,175,159	154,300,537	224,475,695	
Safety Net Care Pool	29,946,804	66,810,037	96,756,841	

Total Voluntary Political Subdivision Program Expenditure $

107,570,812	$

237,215,491    $

344,786,303

8

ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM
FY 2017 APPROPRIATION STATUS REPORT
For the Period Ending June 99, 2017

Note 6:

The following is a summary of $322,230,579 Total Fund ($52,943,687 General Fund/ALTCS Fund state match and $12,797,628 Hospital Assessment Fund) administrative adjustment transactions for medical service claims processed through December 2016 that either pay for or transfer expenditures with dates of service prior to June 30, 2016. Additionally, the $11,716,850 questioned cost previously reported in Note 4 was officially disallowed by CMS and administratively adjusted against the FY 2016 surplus General  Fund.

FY 2016 YTD June 99, 2017	
State Match	Expenditure	ALTCS	Total	
Funds	Authority Funds	Fund	Fund	

Traditional Medicaid Services	
$	28,379,022	$	134,920,254	$	-	$	163,299,276	
Proposition 204 Services	12,797,628	69,990,802	-	82,788,430	
ACA Adult Expansion	-	21,164,951	-	21,164,951	
KidsCare - Children Services	-	146,990	-	146,990	
Children's Rehabilitative Services	2,702,559	7,769,127	-	10,471,686	
Long Term Care	-	-	32,642,396	32,642,396	
SBC Medicaid Administrative Costs CMS  Disallowance	11,716,850	-	-	11,716,850	

Total

$	55,596,059	$

233,992,124	$

32,642,396	$

322,230,579

Note 7:	Summary of non-appropriated expenditures from the Arizona Tobacco Litigation Settlement Fund and the Hospital Assessment Fund by   program.

As of June 99, 2017

Expenditures YTD

Proposition 204 Services - ATLSF	$	1,521,746
ACA Adult Expansion - Hospital Assessment	2,230,461

9