AHCCCS officials say that as a managed-care system, Arizona's program doesn't fit into the traditional Medicaid scheme of things. Often, they claim, HCFA forces them to jump through regulatory and procedural hoops they otherwise would not have to deal with. The aforementioned project, for instance, was essentially designed to streamline the fee-for-service process. As a managed-care system, AHCCCS never had the problems the new project was designed to alleviate.

There is, in fact, remarkably little oversight of key AHCCCS functions, especially considering the scope of the program and the amount of money involved. State financial audits are performed regularly, checking out the program on strictly monetary lines. But the state Auditor General's Office says AHCCCS is not scheduled for a full-blown performance audit (which might reveal costly functional problems, such as keeping dead people on the benefit rolls) until the year 2002. HCFA does not do the types of audits on AHCCCS that might reveal such problems, either.

Linda Minamoto, a computer systems analyst at HCFA's San Francisco office, says AHCCCS is regarded as a good program, that it receives no more or less oversight than any other state's Medicaid program. Federal regulations regarding prior approval of expenditures, she says, are vague. Often, those regulations could be interpreted inconsistently by different federal officials at different times.

HCFA did eventually approve the funding for the AHCCCS data-interchange project. Formal confirmation came after two and a half years of discussion--and just days after New Times inquired about the project.

Although federal funding has been approved, one last problem remains. After spending years of staff time and millions of dollars getting the computer project rolling, the state and federal governments have reconsidered. They have decided the system, actually, is not necessary.

AHCCCS now says the project has been put on hold. Indefinitely.