Arizona never fully put in place the 2025 cost controls meant to rein in its program paying parents to care for children with disabilities, missing up to $493 million in savings. The Arizona Auditor General released the special audit of the Parents as Paid Caregivers model on July 30, 2026.
The model lets parents be paid to care for children with disabilities through the Arizona Long Term Care System.
What the auditors found
A 2025 state law required new cost controls. The audit found that AHCCCS, the state Medicaid agency, launched a new standardized assessment tool on Oct. 1, 2025, then stopped using it on Oct. 16 because of the threat of litigation, missing an estimated $133 million to $493 million in potential savings in fiscal 2026. Auditors said AHCCCS and the Department of Economic Security did not begin enforcing a 40-hour weekly limit on paid parent care until April 2026, although the law required it from July 2025. Other controls lacked oversight, such as a six-month residency rule and a ban on paying for care between 10 p.m. and 6 a.m. It also found missing assessment records and inaccurate assessed hours.
Why this matters for providers and DSPs
Arizona is likely to tighten rules on paid parent caregivers, which could shift more hours to agency DSPs. Providers should expect closer scrutiny of assessments and authorized hours.