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The Health Care Financing Administration's Monitoring of the Arizona Health Care Cost Containment System

Published: Jun 15, 1984. Publicly Released: Jun 15, 1984.
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Highlights

Testimony was given concerning the Health Care Financing Administration's (HCFA) monitoring of the Arizona Health Care Cost Containment System (AHCCCS). AHCCCS is a 3-year demonstration project to provide Medicaid services in Arizona which contains a number of innovations including: (1) contracting with health care providers to deliver services for a fixed, monthly fee determined through competitive bidding; (2) requiring beneficiaries to choose one provider from whom they will receive their health care for a year; and (3) imposing copayments on beneficiaries for the services which they receive. HCFA has contracted with a private organization to evaluate the program. Since Arizona had no precise fee-for-service cost data upon which to determine the maximum Federal share of AHCCCS in the first year, estimates were made based on the cost of Medicaid programs in other nearby States. The HCFA contractor concluded that this methodology was sound given the absence of data attributable to the insured group; however, he suggested that data from Arizona's county health care programs should be used as a check on these estimates and questioned whether a valid second year estimate could be prepared without the use of local data. GAO was unable to determine the financial performance of the contracting providers since all of the contractors had not submitted required reports. In addition, GAO found that neither HCFA nor Arizona had adequate information to ensure that quality and appropriate care is being provided, and accurate utilization data was needed. Furthermore, GAO found that an adequate grievance process had not yet been fully implemented. Finally, although HCFA and Arizona concluded that the medical audits conducted showed that AHCCCS recipients received medical care equivalent to non-AHCCCS patients, a HCFA medical advisor reported that the quality of care was generally substandard and questioned the validity of the medical audits.

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