Legislative Session Hotwash: The Bills, the Budget & the Ballot Measures

Arizona’s 2024 legislative session officially ended last week with the passage and signing of a FY2025 fiscal year budget. The session saw the passage of about a dozen laws that will be good for public health and state government accountability – especially in the areas of behavioral health and licensing of care facilities. There were also many missed opportunities – mostly in the areas of behavioral healthcare and care home assurance accountability.

Some proposed detrimental bills were successfully vetoed or blocked, and there was a concerted push towards improving mental health services and expanding access to healthcare for underserved communities. These measures are crucial steps forward in addressing the state’s long-standing health disparities​

The budget saw across the board modest cuts for many agencies and sweeps of several professional license funds.

The legislature also placed 11 measures on the November ballot. AZPHA will be opposing 7 of them. Voters are likely to place an additional two propositions on the ballot: One updating the law around abortion care and another that would eliminate partisan primaries. AZPHA is supporting both of those measures.

The session underscored the critical role of public advocacy in shaping health policy, as community organizations and health professionals continue to fight for the resources and policies needed to protect and promote public health in Arizona.

Below is a PowerPoint summarizing the session from a public health point of view – including the bills, the budget and the ballot propositions. The presentation includes links to each of the laws, bills and propositions.

2024 Legislative End of Session Summary: The Bills, the Budget & the Ballot Measures
Budget Breakdown

The Arizona Legislature is required by the state constitution to adopt a balanced budget for each fiscal year (Article IV, Section 20, Part 2). That provision says the legislature needs to pass a General Appropriations Act (called informally a feed bill) which has appropriations for the different state departments, state institutions, public schools and interest on public debt.

This year’s “feed bill” is HB2897 and includes the primary budget provisions for state departments and agencies and focuses just on appropriations without including substantive law changes.

Statutory changes needed to reconcile the appropriations made in the feed bill and other changes are put into separate budget bills, called Budget Reconciliation Bills. Most years have a “Health BRB”, but this year there was just a Health Care BRB and a Human Services BRB, as there weren’t any changes needed in state law for ADHS to implement the budget (except for the provisions relating to the Arizona State Hospital in the Health BRB (see HB2903 below).

You can click on the links below for those BRBs to do a deeper dive.

The main ‘feed bill’ gave the ADHS a ‘lump sum’ reduction in their budget of about $719K. Interim Director Cunico has the discretion about what state fund to tap to cut. She has many options…  let’s hope she’s thoughtful and doesn’t pull those funds from a critically important service.

Any of you with ADHS special line-item funding should be asking the Director what she intends to cut and explain why it shouldn’t be your program and why before it’s too late. Here is that Feed Bill: HB2897

There were a few other details in the feed bill as well including:

  • A new $100K for an ADOA ombudsman to handle all the Arizona State Hospital complaints (a good thing).
  • $500K in ongoing funds & an additional $900K one-time funds for ADHS to improve their clunky Az Care Check IT system which is supposed to provide transparent information about the compliance of hundreds of care facilities – but by all accounts, is currently wholly insufficient.

A few funds were exempted from reverting to the general fund including:

  • The $1.2M FY2025 appropriation to support more licensing compliance staff won’t lapse until June 30, 2026.
  • The unused $1M in behavioral health care provider loan repayment program won’t lapse until June 30, 2025.
  • Old unused FY2023 nursing program funds won’t lapse until June 30, 2025.
  • The unused FY2024 appropriation for nurse-family partnership programs won’t lapse until June 30, 2027.
  • The $1M FY2025 appropriation for combating fentanyl won’t lapse until June 30, 2026.

AZPHA Considering Opposing Two Additional Ballot Propositions

Our public health policy committee met last week and recommended that our Board (who meets next Friday) oppose both the “Secure the Border Act” (HCR 2060) and the “Arizona Legislative Ratification of Rules that Increase Regulatory Costs Measure” (SCR1012).

You can review the measures (which will be on the November ballot) above. Below you’ll see some draft language that the Board will review next Friday. If approved by the Board, arguments will be sent to the Voter Publicity Pamphlet on behalf of our members. Note: This is just rough draft language.

Protect Our Seniors: Vote NO on Proposition XXX

Arizona’s ballot Proposition xxx is an unnecessary and potentially harmful measure that will impede the effective governance of critical sectors, especially healthcare in senior care.

Arizona law already mandates that state agencies have statutory authority with guardrails before they enact regulations. Additionally, all final proposed state agency rules must receive final approval from the Governor’s Regulatory Review Council. This existing oversight ensures that any new regulations are carefully vetted and justified, balancing regulatory needs with public interests.

Approving Proposition XXX would add an added layer of bureaucracy by requiring new regulations to also be approved by the state legislature. This would significantly slow down the process of enacting essential regulations and might even halt necessary health and safety regulations altogether. The consequences for healthcare, particularly in senior care facilities, could be severe.

As highlighted in a detailed report by The Arizona Republic, there are already alarming instances of resident harm in Arizona’s senior living facilities, including abuse, neglect, and inadequate care. 

The delay or inability to update regulations promptly under Proposition XXX could make matters even worse, leading to deteriorating conditions and insufficient safeguards for vulnerable Arizonans.

Without being able to implement new health and safety regulations or change fees to hire inspectors, senior care facilities may continue using outdated rules that fail to address current challenges, such as emerging health threats, evolving care standards, and needs due to population growth. This could lead to further neglect and mistreatment of residents, undermining their health and well-being.

Proposition XXX poses a significant risk to effective governance and public safety. It threatens to stifle regulatory development crucial for maintaining and improving care standards in Arizona, especially in the most vulnerable sectors such as assisted living and nursing homes. 

Please reject this harmful proposition to ensure we protect our elders and people living with disabilities who need services in Arizona care facilities.

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Vote No on Proposition xxx ‘Secure the Border Act’

Proposition xxx (aka the ‘Secure the Border Act’) presents a troubling path for Arizona. This extreme proposition is an unfunded mandate that could lead to enormous costs for cities and counties in Arizona. This unfunded proposition burdens local law enforcement, courts, and the jail and prisons, and prevents them from prioritizing the public safety needs relevant to their communities.

This proposition also imposes unjust and excessive regulations on working immigrant families in Arizona.  If you pass Proposition xxx, essential health and public services for many Arizona families could be denied, leading to worsening economic disparities and health inequities among Arizona’s communities. 

In addition, this proposition has no protections against enforcement actions in sensitive locations like hospitals, schools, or places of worship.  This proposition also has no protections for the elderly, children, or other vulnerable individuals.

Additionally, Proposition xxx would deepen existing divides and foster discrimination within our society. It would lead to unfair policing, harassment, and racial profiling, violating basic safeguards like due process that we all deeply value. Proposition XXX also provides immunity to law enforcement and government officials, meaning they can’t be held accountable by Arizonans.

By voting no on this proposition, we send a clear message: discrimination has no place in Arizona. Our neighbors should not be denied their basic rights.

Please vote no on Proposition xxx to stand for a fair future for all Arizonans.

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Last month our Board approved our Public Health Policy Committee’s recommendation to take a position on 5 of the ballot measures. Our ballot arguments have been completed and filed with the Secretary of State. Here are links to those Arguments:

State Budget Update

The State House and Senate were uncharacteristically in session last Friday and yesterday mulling over a budget proposal reached by the senate president Petersen, speaker Toma and the Hobbs team. A lot of the discussion among members appeared to be behind closed doors and in caucus meetings. As I write this on Saturday afternoon there was not yet a final vote on the bills.

The bottom line is that our elected officials are trying to both balance the current fiscal year budget (which ends June 30) and develop what they think will be a balanced budget for the next FY.

One of the main ways they’re trying to do it is to claw back some of the spending from last fiscal year (to help erase the $729M current year deficit) and come up with ways to make up for the projected gap between spending and revenue for the coming fiscal year (an estimated $690M gap).

I say estimated because, while there’s relative certainty about spending (except for off the grid and out of control private school and homeschool voucher spending), the revenue side is really just a projection.

Opioid Fund Sweep

A point of major controversy in the negotiations is a plan to sweep $75M from AZ’s opioid lawsuit settlement fund to help fund the state prison system. It’s unclear whether that’s legal as the Attorney General is the Plaintiff in that suit – giving her rather than the legislature primary control of the money.

Agency Lump Sum Cuts

On the health side of things, I didn’t see anything that was a catastrophic cut. Yes – both AHCCCS and ADHS were slated to get about a 3.5% ‘lump sum’ cut to their operating budget, which for ADHS only amounts to about $700K. This is a manageable figure, as there are clever ways to switch staff funding sources and find unused other funds to contribute.

I say manageable because I lived through cuts far more drastic than this. For example, in early 2009 we were given a $20M lump sum cut and a few months later an addition $30M cut…  so, while not desirable, a $700K cut is entirely manageable. Hopefully the agency leadership takes the funds from their operating budget and not other line items like their loan repayment program etc. That’s what we need to watch out for.

Drug Rebate Fund

AHCCCS got a similar percentage operating fund cut (manageable). The big contribution from AHCCCS in the negotiated proposal is a $33M sweep of their drug rebate fund. The drug rebate fund is seldom discussed, as AHCCCS has generally liked to keep the existence of the fund quiet, and for good reason.

AHCCCS collects rebates from pharmaceutical manufacturers based on the volume of drugs dispensed to Medicaid members. The beauty of the rebate fund and (and why previous AHCCCS didn’t discuss it much) is that it’s:

  • Not part of the general fund;
  • Doesn’t need to be appropriated by the legislature, and (best of all);
  • Fungible, meaning AHCCCS can decide how and when they spend it.

The legislature also worked through several languishing bills on Friday and Saturday include the one that will charge ADHS with developing a regulatory program for magic mushroom (psilocybin) service centers where people could receive the psychedelic in a medically supervised setting

I’ll write up a summary of the final budget once it’s passed and signed.

Years of Full Court Press Childhood Vaccination Advocacy Pays Off: ADHS Overhauls their Vaccines for Children Program

Arizona’s Vaccines for Children (VFC) program, designed to ensure kids from low-income families can get vaccinated, has hit a rough patch in recent years. Over the past few years, the state has seen a significant drop in participating providers, meaning it’s been getting harder and harder for parents to actually get their kids vaccinated.

Under the Ducey administration, the number of providers fell by 50%, leaving Arizona with only six VFC providers per 10,000 Medicaid-eligible kids, compared to the national average of 24 per 10,000​.

Several issues have been at the heart of this decline. Providers have faced cumbersome ADHS administrative processes, like complicated vaccine ordering and returns, and difficulties integrating their systems with the Arizona State Immunization Information System​​.

Additionally, the program’s enforcement of strict policies, including restitution (fines), has been a major deterrent for many providers. These fines, coupled with accusations of fraud for administrative errors, created a punitive environment that many found off-putting​, running many providers off the VFC program.

I’m happy to report that ADHS has finally begun making some changes to turn things around after several years of full court press administrative advocacy on the part of a constellation of stakeholders and county health departments

They’re working to stop the bleeding of VFC providers and hopefully eventually increase the number of VFC providers by streamlining the application process and offering more support to healthcare providers​. A recent report by the Arizona Partnership for Immunization, in collaboration with the OMNI Institute, has laid out recommendations to address these challenges and improve the program​.

See: An Assessment of the Facilitators and Challenges to Providing Vaccine)

This week ADHS Deputy Director posted a blog highlighting new measures aimed at expanding the provider network and simplifying processes. For instance, the department is pausing the enforcement of the contentious dose-for-dose restitution policy and implementing more provider-friendly approaches and updating their VFC Program Operations Guide. Policy changes include:

  • Elimination of the penalties for unused vaccine doses (known as “restitution” or dose for dose replacement)
  • Reducing the requirement for a provider to be open at least 4 days-a-week to 4 consecutive hours on a given day
  • Clearer guidance on operating mobile clinics
  • Reducing the requirement to record temperature readings from twice per day to once per day
  • Clarifying that records can be stored electronically and/or off-site

The Arizona VFC Program Operations Guide and a summary of the changes can be found on the Arizona VFC Home Page in the announcement box or on the VFC Operations Guide and Resources page.

AZPHA commends Ms. Sjolander’s leadership in trying to turn the ship around. These new policy changes (if implemented consistently), have a chance at rebuilding and enhancing Arizona’s VFC program and ensuring more children can access crucial vaccinations​.

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Important Background

The Vaccines for Children Program makes sure kids whose parents can’t afford vaccines can still get their kids vaccinated. Funding for VFC comes via the CDC, who buys vaccines at a discount and distributes them to states. States distribute them to physicians’ offices & clinics that take part in the VFC program. ADHS manages the VFC program in our state.

Arizona lost 50% of its VFC providers during the Ducey administration – going from 1,200 to 600… reducing access to vaccine, lowering childhood vaccination rates and harming overall AHCCCS network capacity. 

Maricopa County Department of Public Health contracted with The Arizona Partnership for Immunizations to study this issue and prepare a report describing the facilitators and challenges to participating in the VFC program from healthcare providers’ perspectives, as well as recommendations for reversing this course. TAPI hired OMNI Institute, a social sciences non-profit consultancy to conduct this assessment.

That report, entitled An Assessment of the Facilitators & Challenges Providing-Vaccine in Arizona was released in December 2023. The 96-page report has many findings. A common theme as presented in the Executive Summary:

“Respondents expressed frustration with the complexity surrounding ordering and returning vaccines, the challenges integrating practice electronic medical record systems with the Arizona State Immunization Information System and the administrative burdens regarding compliance and reconciliation.”

“When asked about the significant challenges/barriers to their continued participation in the VFC program, a common theme respondents raised was an adversarial tone in the enforcement of VFC policies and communications, with administrative errors (some of which stemmed from ASIIS) often being met with accusations of fraud and/or wastage. Many non-VFC providers pointed to administrative burdens, expensive charges to rectify incorrect dose counts, and a generally punitive tone from the VFC program as rationales for their non-participation.”

2025 Executive Director Annual Report

Protecting Public Health Authority & Advocacy Toolkit

Protecting Public Health Authority & Advocacy Toolkit

This toolkit was created based on the technical assistance requests of APHA affiliates working to protect public health authority in their states. These resources can be shared with affiliate membership, advocates, and partners, or used to support affiliate activities. This toolkit is designed to equip users with resources they need to support an effective advocacy campaign to protect public health.

AZPHA Public Health Policy Committee Meeting to Recommend Whether We Oppose HCR2060

The Legislature passed HCR2060 along party lines last week. The measure asks voters to approve a hodgepodge of new laws like empowering local law enforcement to enforce federal immigration laws. That authority comes with vague limits on how they would make that decision. HCR2060 also gives law enforcement civil immunity for apprehending persons they believe crossed at other than a port of entry.

It prohibits people from submitting false documents when applying for public benefits or employment, and hikes penalties for manufacture, sale of and possession of fentanyl.

We’ve scheduled a Public Health Policy Committee meeting for next Friday at 2pm to have the committee discuss whether they recommend to the Board whether to oppose HCR2060 – which will be on the November ballot.

We’ll include the committee’s recommendation in the June 21 Board meeting for a final decision. The SOS extended the deadline to submit arguments in the Publicity Pamphlet to July 3 – so we have time (the former deadline was June 20).

Note: The state constitution requires that all ballot propositions be of a ‘single subject’ See: AZ Single Subject Rule. HCR2060 is being challenged in court for violating this rule, which I believe it clearly does.

Last month our AZPHA Board of Directors approved our Public Health Policy Committee’s recommendation to take a position on 5 of the ballot measures. Our ballot arguments have been completed and filed with the Secretary of State.

Here are links to our Arguments:

See also: RHC-Presentation-2024-Ballot-Measures

Anybody can turn in an argument. Simply write up an argument (300-word limit) and submit it to the General Election Ballot Measure Argument Portal along with the $75 fee. The portal is open through July 2.

The Arizona Corporation Commission Part V: ACC Election Important for AZ Public Health

The Arizona Corporation Commission plays a crucial role in influencing public health through its regulatory decisions on utilities like electricity, gas, and water. These decisions have far-reaching impacts on the social determinants of health, affecting everything from air quality to the economic well-being of Arizonans.

One significant area of impact is utility rates. The ACC’s approval of rate increases for utilities such as Arizona Public Service and Southwest Gas directly affects household finances, particularly for low-income families.

For instance, recent approvals of rate hikes have led to increased annual revenues for these utilities, but also higher utility bills for consumers. Higher utility costs can strain household budgets, reducing funds available for essentials like food, healthcare, and education, which are all critical components of overall health​.

The ACC’s energy policies significantly impact air quality and, consequently, public health. When the ACC supports renewable energy initiatives, it promotes cleaner air by reducing reliance on polluting fossil fuels. Renewable energy sources like solar and wind help cut down on harmful emissions, leading to fewer respiratory issues, cardiovascular diseases, and other health problems associated with air pollution​​.

Conversely, decisions that favor traditional energy sources can lead to poorer air quality and higher healthcare costs due to increased rates of pollution-related illnesses. This underscores the importance of regulatory decisions and the commissioners elected to the ACC, as their policies can either enhance or hinder public health outcomes​.

We recently wrote a four-part series describing the ways in which the decisions Arizona Corporation Commissioners influence public health.

Overall, the ACC’s regulatory choices ripple out into the broader social determinants of health, highlighting the need for informed voting and advocacy to ensure that the Commission prioritizes the well-being of all Arizonans.

The November Election

The 2024 Arizona Corporation Commission election will be held on November 5, 2024. Three of the five seats on the Commission are up for election in November – so this year presents a real opportunity to shift the commission away from protecting utilities and other businesses – focusing it more on their public health role.

Republicans currently hold 4 seats on the board, while Democrats hold just 1. Lea Márquez Peterson (Republican) is running for re-election, while James O’Connor ( R) and Anna Tovar (D) are not.

While a primary election will be held this summer, it won’t really matter, because each party is nominating just 3 candidates.

On the Republican side, we will see Rene LopezLea Marquez Petersen and Rachel Walden on the November ballot. Democrats on the November ballot will be Ylenia AguilarJonathon Hill and Joshua Polachek.

The 3 vote getters among the six candidates on the Nov ballot will earn a 4-year term on this important public health body.

In the coming weeks we’ll dive into the details of each candidate’s priorities to see how each matches up with public health priorities.

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AZPHA Draft Letter to AZ Corporation Commission Candidates

July xx, 2024

Dear [Candidate’s Name],

I hope this letter finds you well. I’m writing to you as the Executive Director for the Arizona Public Health Association highlight our organization’s priorities related to the Arizona Corporation Commission (ACC) and to seek your commitment to policies that promote public health, environmental sustainability, and economic equity as you campaign for the November 2024 election.

The ACC plays a pivotal role in shaping Arizona’s economic and environmental landscape by regulating utility rates and services. Recently, we have witnessed significant rate increases from Arizona Public Service (APS) and Southwest Gas (SW Gas).

These rate hikes have far-reaching consequences on the social determinants of health, especially for our most vulnerable populations. Rising utility costs can lead to difficult choices between paying for utilities and other essentials such as food, housing, and healthcare, exacerbating health disparities among low-income families, seniors, and individuals with chronic health conditions.

The AZPHA is deeply concerned that the routine approval of these rate hikes undermines the well-being of Arizona residents. The 2022 APS rate increase, for example, was a substantial burden on many households, and the 2023 SW Gas rate hike followed suit.

These increases are not just numbers on a bill; they translate to real sacrifices and hardships for families across our state. We urge the ACC to adopt a more critical stance on rate increase proposals, ensuring that any approved increases are justifiable and do not disproportionately burden those already struggling to make ends meet.

It is essential to evaluate the impact of rate increases through a public health lens, considering how financial stress and energy insecurity can deteriorate health outcomes.

In addition to protecting consumers from unjust rate hikes, the ACC has a pivotal role in steering Arizona towards a sustainable energy future.

The AZPHA believes that the commission should be more proactive in incentivizing clean energy development and protecting our environment. Arizona, with its abundant sunshine, has tremendous potential for solar energy. Prioritizing investments in renewable energy not only mitigates climate change but also reduces pollution-related health issues, such as respiratory and cardiovascular diseases.

Moreover, clean energy initiatives can stimulate economic growth by creating green jobs and reducing energy costs in the long term. By supporting policies that favor renewable energy and energy efficiency, the ACC can ensure a healthier environment and a more resilient economy for all Arizonans.

Initiatives like expanding rooftop solar programs, enhancing grid storage capabilities, and promoting energy efficiency measures are crucial steps towards a sustainable future. Additionally, the ACC should consider the health implications of energy production and prioritize reducing emissions from fossil fuels.

As you campaign for a position on the ACC, we urge you to consider these priorities. Commitment to fair utility rates and clean energy development aligns with the broader goal of improving public health and reducing health disparities. Your leadership on these issues can make a significant difference in the lives of Arizona residents.

Thank you for your attention to these critical matters. We look forward to your response and to the possibility of working together to create a healthier and more sustainable Arizona.

Sincerely,

 

Will Humble, MPH

Executive Director, Arizona Public Health Association

Director, Arizona Department of Health Services (2009-2015)

 

 

 

Report Outlines Recommendations to Prevent Future Medicaid Fraud in Arizona

In April 2023, AHCCCS contracted with Berry Dunn, to analyze AHCCCS data, identify trends, and make recommendations on what they should do to prevent future Medicaid fraud moving forward. The audit focused on AHCCCS’ claims and enrollment processes.

View the Report

Berry Dunn made 25 programmatic recommendations. AHCCCS says they’ve implemented 20 of the 25 recommendations and is in the process of implementing another five.

AHCCCS Sober Living Fraud Website

As Stephanie Innes points out in her story last week (see: Audit on big Arizona Medicaid fraud focuses on processes, not people) the report: “… does not name any individuals responsible for ongoing fraud against the agency but rather name process and procedural issues to help prevent abuse in the future.”

However, that doesn’t mean that the persons who oversaw AHCCCS’ American Indian Health Plan (former Assistant Director Markay Adams and former Deputy Director Shelli Silver) are off the hook (Ms. Silver is retired & Ms. Adams is in senior leadership at Blue Cross Blue Shield of Arizona).

The criminal investigation by the Attorney General is still underway. One has to believe that the AG investigators are examining emails and other internal AHCCCS records to determine whether this crisis was facilitated by former staff criminal misconduct.   

You can contact the AHCCCS Office of Inspector General with questions about fraud AHCCCSFraud@azahcccs.gov.

Investigative Journalists Uncovering New Details About Unchecked Medicaid Fraud During the Ducey Administration

Arizona has been grappling with a significant Medicaid fraud and human trafficking crisis, particularly targeting Native Americans. The fraud primarily involved behavioral health providers exploiting lax AHCCCS staff oversight of the fee-for-service American Indian Health Plan.

Lax staff oversight allowed unscrupulous operators to enroll as Medicaid providers without proper oversight. Some providers even forged signatures of licensed healthcare professionals to submit fraudulent claims.

One of the major issues was the manipulation of billing codes. During the Ducey administration AIHP reimbursed up to $1,400 per day for addiction treatment services. Fraudulent operators exploited this high reimbursement rate by billing for services that were either not provided or grossly inflated. This led to a surge in Medicaid payouts, straining the system and costing taxpayers hundreds of millions of dollars.

The impact on Native American communities has been devastating. Many individuals seeking help for addiction were lured away from their homes under false pretenses, only to be abandoned once the fraudulent providers were shut down. This has led to an increase in homelessness and a lack of access to legitimate healthcare services for those most in need.

Arizona Republic journalists Stephanie Innes, Arlyssa Becenti, Richard Ruelas, Lane Sainty and others have been investigating the fraud and human trafficking for more than a year, trying to get public records requests filled and piecing together the factors and lax staff oversight that led to this tragic and expensive crisis.

I encourage you to read the developing series on azcentral below:

Arizona Republic Series: A SOBERING SCANDAL

The victims | Timeline | Inside the scam | Arizona’s failure | Rebuilding trust

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