In 1999, a state audit said the health system was registering billing returns significantly higher than expected, but more data was needed to pinpoint the problem. One year later, auditors concluded that there were, in fact, no discrepancies, but the next audit in 2001 suggested otherwise and recommended further hindsight reviews. By 2002, auditors had once again decided that problems with the system were immaterial.
County administrative officer David Smith laments the "stalemate of educated opinions" as to whether there were indeed budgetary errors. In defensive steps against potential billing troubles, Maricopa had adopted a new computer system to track medical charges and established a $53 million reserve fund in case officials were missing something big.
Unfortunately for the county, the new computer system was delinquent, and its programming glitches only exacerbated the existing billing problems. By 2004, when an outside auditing firm finally confirmed the discrepancies, the reserve fund was the only thing standing between the county and a health system that had undercharged anywhere from $33 million to $84 million.
Two years ago, county administrators had already begun plans to encourage accountability and solvency in the health system by turning it into a fully autonomous district, complete with its own elected board. Meanwhile, Maricopa's reserve fund has allowed it to avoid taking a hit for the health system's woes, but the fiscal mess has focused negative attention on the county leadership.
