Developmental disabilities; appropriations; waivers
HB2945 makes several changes to Arizona’s developmental disabilities and Medicaid waiver framework, with a primary focus on the “parents as paid caregivers” program. It creates new statutory rules for billing and verification, including electronic visit verification, service modifiers distinguishing parent-provided care from nonparent care, limits on billing when the child is not present, and a requirement for a strengthened standardized assessment tool to determine extraordinary care needs. The bill also restricts when parents may provide paid services, limits a parent to employment by only one agency for these services, and imposes a six-month Arizona residency requirement for parent caregivers, subject to federal approval.
The bill also adds a new chapter governing section 1115 waiver proposals. Under that chapter, AHCCCS may not submit certain waiver amendments or extensions without legislative authorization if they expand eligibility, add new covered services, or are projected to increase utilization by more than 10 percent for affected services. It requires committee review and legislative notification for qualifying changes, and it creates a monitoring-and-termination process for unapproved waiver changes that later exceed the utilization threshold. In addition, the bill requires implementation of a 40-hour-per-week-per-child care limit under the parents as paid caregivers waiver amendment and directs the Governor’s budget office to provide more detailed reporting on federal grant monies and potential service impacts.
HB2945 also includes a special audit of the parents as paid caregivers program by the Auditor General, with a report due in 2026 and a delayed repeal of that audit section at the end of 2026. The bill appropriates substantial additional funding in fiscal year 2024-2025 for developmental disabilities Medicaid program expenses, a developmental disabilities cost-effectiveness study, and the special audit, using prescription drug rebate funds and developmental disabilities Medicaid expenditure authority. It is an emergency measure, so it became operative immediately upon enactment.
The general sentiment reflected in the vote history suggests the bill had majority support but was not unanimous. It passed the House Appropriations Committee by a narrow margin, cleared House Rules, and then passed the House floor with a comfortable but not overwhelming margin. The Senate approved it overwhelmingly after substituting it for SB1734, indicating broad legislative acceptance of the package overall.
The main points of contention appear to center on oversight, spending, and limits on the parents as paid caregivers program. Supporters likely viewed the bill as a way to control costs, improve accountability, and standardize assessments and billing practices, while critics may have been concerned about tighter restrictions on family caregivers, the residency requirement, and the Legislature’s increased control over waiver changes that are often managed through the executive branch and federal approval process. The appropriations and the 40-hour care cap were also likely key issues because they directly affect program access, service levels, and state spending.
HB2945 amends Title 36 to create new statutory requirements for the parents as paid caregivers program and to regulate future section 1115 Medicaid waiver changes. It adds reporting, verification, billing, assessment, residency, and service-limit rules affecting AHCCCS and the Department of Economic Security, and it requires legislative approval for certain waiver amendments that expand eligibility, benefits, or utilization. The bill also amends the Governor’s federal grants reporting statute and appropriates additional funds for developmental disabilities Medicaid services, a cost-effectiveness study, and an Auditor General audit, thereby increasing state oversight and spending authority in the developmental disabilities system.
The bill’s legislative path suggests generally favorable sentiment, with strong final passage in both chambers and especially broad Senate support. At the same time, the earlier committee votes show that the measure was not without resistance, particularly in the House Appropriations Committee where passage was close. Overall, the bill appears to have been viewed as a significant but acceptable package of program controls, oversight measures, and funding for developmental disabilities services.
The most notable contention appears to involve how much flexibility the executive agencies should have in administering Medicaid waiver changes versus how much direct legislative approval should be required. Another likely point of disagreement is the bill’s tighter regulation of the parents as paid caregivers program, including the 40-hour weekly cap, residency requirement, billing restrictions, and the prohibition on billing for ordinary household tasks. Fiscal concerns also likely played a role because the bill appropriates large sums from the prescription drug rebate fund and other Medicaid-related authority, while supporters framed those funds as necessary to sustain services and improve accountability.