Arkansas sets spending limits for tobacco settlement Medicaid services

The Department of Human Services may spend up to $145,569,113 on Medicaid Tobacco Settlement Program grants. The starting amounts are $140,426,470 for hospital and medical services and $5,142,643 for prescription drugs. The money comes from the Medicaid Expansion Program Account. Actual spending cannot exceed available funds and must follow state spending rules. Approved transfers may shift spending authority between medical services and prescriptions. The spending authority covers July 1, 2026, through June 30, 2027.

The Department of Human Services may pay program staff and operating costs within the spending and staffing limits. The Division of Medical Services has a one-employee limit. The Division of Aging, Adult, and Behavioral Health Services has an 18-employee limit. The money comes from the Medicaid Expansion Program Account, and spending cannot exceed available funds. The state does not promise continued funding for settlement-funded positions when settlement money is insufficient. Replacing expired settlement funds with state money requires a General Assembly funding measure and the governor’s authorization. The Tobacco Settlement Commission must disclose these funding limits to new and current staff. They must also appear in employee handbooks or professional services contracts when applicable. The staffing, spending, and temporary funding rules apply from July 1, 2026, through June 30, 2027.

Agency leaders may request approval to move spending authority between certain program budget categories. The permission covers operating-budget categories and shifts between hospital and medical services grants and prescription drug grants. Operating-budget transfers require the chief fiscal officer’s approval after approval by the Legislative Council or Joint Budget Committee. For grant transfers, the Human Services secretary must find a shift necessary for effective operation and obtain the governor’s approval before requesting it from the chief fiscal officer. Legislative approval and the department’s resource-transfer limits also apply. Transfers cannot raise the total budget above authorized spending or available funds. Money may move only under this law’s transfer rules. Transfers from equipment or data-processing budgets need specific legal authority. An exception allows equipment money to shift to state data-processing services when the Division of Information Systems finds that approach more cost-efficient than buying equipment. The transfer rules apply from July 1, 2026, through June 30, 2027.