State Senate reaches deal on AHCCCS funding bill

State lawmakers on Wednesday passed legislation that will allow the state’s Medicaid agency to access federal dollars that figure into the payments that reimburse health care providers across the state for delivering service to program enrollees. 

HB 2432, sponsored by Rep. David Livingston, R-Peoria, extends the required expenditure authority to the Arizona Health Care Cost Containment System, or AHCCCS, for the remainder of fiscal year 2023, which ends June 30. 

The bill passed the House of Representatives by a wide margin in February but languished in the state Senate.  

The Senate instead in March tacked a partial expenditure authority provision onto another bill, HB 2624 by Rep. Leo Biasiucci, R-Lake Havasu City, that dealt with Medicaid eligibility determinations.  

The amendment only granted AHCCCS the expenditure authority for $1.6 billion in federal funds – enough to cover one month – causing concern in the health care community and broader business community that payments to providers would be delayed if additional expenditure authority wasn’t granted by a late April deadline, forcing providers and the private sector health plans the state contracts with to bear the financial burden in the meantime.  

After a weeklong delay, the Senate took up the original bill Wednesday, passing it 26-3 and sending it to Gov. Katie Hobbs for her signature.  

Following the bill’s passage, Hobbs tweeted, “I am glad to see Republicans and Democrats come together to pass HB2432, a critical bill that will keep millions of Arizonans insured. The health and safety of Arizonans is not a partisan issue, and I hope we can continue to work together to deliver for our state.” 

Arizona Chamber of Commerce & Industry President and CEO Danny Seiden said he was pleased a deal was reached, but that he worries about risks to the stability of the public policy environment. 

“We’re pleased both parties came together to pass this bill that is of major importance not only to the health care sector but to the entire state economy,” Seiden said. “I did hear concern from the business community about how disruptive a failure to pass this procedural bill in a timely manner could be, so I want to thank Senate President Warren Petersen, House Speaker Ben Toma, and Gov. Hobbs for coming together to reach an agreement. The state has major challenges ahead of it that will require bipartisan cooperation to maintain its competitiveness, so I’m hopeful these leaders will continue to work hard for Arizona.

Legislators include expenditure authority language in the annual state budget, but they must sometimes pass a supplemental bill when the authority in the adopted budget is insufficient. 

Budget forecasters’ ability to project AHCCCS budget needs in the fiscal year 2023 budget language was complicated by additional federal reimbursements that flowed to states during the pandemic and by the federal requirement that state Medicaid agencies not disenroll anyone during the public health emergency. Subsequent federal legislation granted states the ability to reassess enrollees’ eligibility beginning April 1, the same date the pandemic era enhanced federal reimbursement rates began to be reduced. The enhanced reimbursement rate will fully phase out at the end of 2023. The public health emergency ends May 11.