Arizona’s Paid Parent Caregiver program was created to provide relief to families of children with developmental disabilities who couldn’t bring paid caregivers into their homes during the COVID-19 pandemic.
The program continued after the world reopened, but federal funding was dramatically reduced. Now the state is paying hundreds of millions of dollars a year to parent caregivers, as KJZZ and other media outlets have reported.
The state agencies involved say there’s more to the story.
According to the audit, Arizona’s Medicaid agency — called the Arizona Health Care Cost Containment System (AHCCCS) — and the Division of Developmental Disabilities (DDD) could have saved the state between $133 and $493 million in the most recent fiscal year if they had employed the cost-saving methods cemented in state law last summer.
Some families call the program a lifesaver.
Shawn Cutting’s son Dominic, who has autism, was approved for DDD services when he was 3. Finding caregivers was a challenge.
“I started finding different support groups and that is really how: word of mouth,” Cutting says. “And then I was working at a gas station and a customer told me about where her daughter worked. And it was God, it was God, [who] brought that person to me.”
Cutting told KJZZ in January that she was able to quit her job at the gas station and provide care for her 7-year-old son full-time.
“That's how I started my journey as a paid caregiver is finding that company through her. Because I was overwhelmed. No, there was no help,” she says.
Like many other states, Arizona has long had a shortage of paid care providers.
The demand became clear after the state extended pandemic-era approval to allow family members like Cutting to be paid to provide that care themselves.
By 2025, spending had more than doubled in the prior fiscal year alone. Gov. Katie Hobbs signed legislation to address that.
Guardrails include a new assessment tool to determine how many paid service hours a child qualifies for.
According to the state’s audit released July 30, many of those requirements still haven’t been fulfilled. A 40-hour cap was set in 2024. In one week alone, auditors found 257 parents were paid for more than 40 hours of care.
The new assessment tool has still not been put into effect. Hobbs paused that after outcry from parents who felt the new guidelines were unreasonable. That tool is being tweaked and is set to take effect on Dec. 1.
Cynthia Macluskie isn’t surprised by the audit’s findings.
“First of all, it's nice to be vindicated,” Macluskie says. “Because for months and months now, we have been asking DDD about what exactly was happening, and were they meeting those metrics that they were supposed to be meeting? And we were constantly being told it was going great. But it didn't seem like it was going great when I was talking to families and providers. So nothing in the report shocked me.”
Macluskie is the advocacy director for the Autism Society of Greater Phoenix. She says that from the outset, many in the community raised questions about the program’s sustainability.
“Before this was rolled out, we had meetings. And, there was many of us that said, `What are the guardrails? What is the plan? This is gonna be a real problem. Does anybody not see that this is gonna be a problem?’" she says.
And the answer back from AHCCCS and DDD is, 'It's gonna be just fine. Thank you. And we're gonna roll it back as soon as COVID's over, and we have no concerns.’ And there were many of us that were like, 'Oh my God, this is gonna be a train wreck.’”
Jon Meyers, executive director of the Arizona Developmental Disabilities Planning Council, has reservations about the audit’s findings.
“They should have at least asked more questions … before they made sort of overarching statements about how Arizona's program could be improved,” he says.
But the audit wasn’t wrong about everything, Meyers adds.
“I think what happened with Arizona's system was largely, if not entirely, a result of implementing the Parents as Paid Caregivers program incorrectly, not having good controls over it, not enforcing the rules that were spelled out in the application to CMS to get approval of the program.”
Hobbs declined comment for this story. State legislator Matt Gress, a Phoenix Republican who has been involved in discussions regarding the paid parent caregiver program, did not respond to a request for comment.
Both AHCCCS and the Department of Economic Security, which oversees DDD, provided responses to auditors, which mirror responses they sent to KJZZ. Both agencies say they can’t comply with the assessment tool yet since the governor imposed delays.
AHCCCS argued the increased spending cited in the audit isn’t only attributable to this program but to other costly, widely used services like ABA therapy. The agency also said it has been moving toward a 40-hour cap and has valid reasons for continuing to pay some families more.
DES says it’s been compliant with the law and is requiring parent caregivers to sign forms acknowledging the 40-hour limit.
Full statement from DES
The Arizona Department of Economic Security (DES/Department) remains fully committed to fiscal accountability and legislative compliance while ensuring Arizona families continue to receive the essential, medically necessary care they require. In the formal response published on July 30, DES respectfully disagreed with the Auditor General’s finding that enforcement of HB 2945 was delayed or absent. As acknowledged in Chapter 3 (pages 29–31) of the Auditor General’s own report, DES began actively implementing and monitoring Parents as Paid Caregivers (PPCG) requirements in May 2025, months before the requirements took effect.
The Department’s complete formal response is available starting on page 78 of the audit report. Below is a summary of our implementation timeline and enforcement methodology:
- Early Communication and Enforcement (May 2025): Beginning in May 2025, the DDD Provider Network Support team built weekly data tracking to identify Qualified Vendors with parents exceeding 40 hours or working across multiple vendors. DES proactively issued compliance notices, required corrective action plans, and provided technical assistance to drive immediate compliance.
- System Adjustments (October 2025 – Early 2026): Monitoring was temporarily adjusted in October 2025 while AHCCCS transitioned to its new Electronic Visit Verification (EVV) aggregator. As higher-quality, synchronized data became available through this new system, DES enhanced its tracking capabilities to support formal contract enforcement.
- Formal Corrective Actions Issued (April 2026 – Present): Using refined, highly granular EVV data, DES escalated enforcement in April 2026 by issuing over 200 formal Corrective Action Plans (CAPs) to non-compliant Qualified Vendors. Approximately 10% of these CAPs were subsequently rescinded after thorough reviews accounted for billing calendar discrepancies. These actions demonstrate our commitment to rigorous data accuracy. Vendors failing to resolve CAPs are immediately elevated to DDD’s Contract Action Unit.
It is important to note that authorized care hours are determined strictly by medical necessity. Whether care is provided by a Direct Support Professional or a parent, the authorized hours and overall cost to the state remain the same.
EDITOR'S NOTE: The story has been updated to correct where Matt Gress resides.
