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AHCCCS pays hospitals for inpatient and outphospitalsatient services to AHCCCS members. Additionally,
AHCCCS pays supplemental payments to hospitals for different purposes and activities.
summary of all hospital payments
[Excel] (claims as well as supplemental payments) is
On March 29, 2012, Governor Brewer approved Laws 2012, Second Regular Session, Chapter
122 which, in part, ends the inpatient hospital tiered per diem methodology utilized
by AHCCCS and its Contractors effective September 30, 2013. The AHCCCS tiered per
diem methodology for the payment of acute care hospital inpatient claims has been
in place since 1993. This payment structure is the default methodology, as required
by Arizona State law, that must be used by AHCCCS' Managed Care Organizations (MCOs)
when no contract exists between an MCO and a hospital. Pursuant to the newly signed
law, AHCCCS is required to obtain legislative approval of an alternative reimbursement
methodology for inpatient dates of service on and after October 1, 2013. AHCCCS
is exploring the benefits of the APR-DRG payment methodology and will be establishing
workgroups to seek stakeholder input on such a methodology.
Read more about the
AHCCCS Transition to DRG-based Payment.
Information on the individual supplemental payment programs is provided below:
Critical Access Hospitals (CAHs) are rural community hospitals that meet defined
criteria outlined in the Conditions of Participation, 432CFR-485 and subsequent
legislative refinements to the program through the BBA, BIPA, and Medicare Modernization
Act. The Arizona State Legislature has directed AHCCCS to allocate additional funds
appropriated in the annual state budget.
More information about Critical Access payments.
The Rural Hospital Inpatient Fund was established by the Legislature in 2005 in
response to a 2002 hospital inpatient study that showed rural hospital inpatient
cost structures are higher than urban hospital cost structures for inpatient services.
This fund was designed to supplement rural hospital inpatient payments.
More information about Rural Hospital Inpatient Fund payments.
In November 2002, Arizona voters approved Proposition 202, the Indian Gaming and
Self-Reliance Act. Among other things, the initiative established the Arizona Benefits
Fund, consisting of tribal gaming revenues paid to the State on a quarterly basis.
The Benefits Fund is administered by the Department of Gaming. To help offset the
readiness and costs of Level 1 Trauma Centers and the increasing volume in Emergency
Departments, a portion of these funds are transferred to AHCCCS for distribution.
More information about Proposition 202 payments.
Graduate Medical Education (GME) funds are distributed to hospitals that provide
training and education for medical school graduates. This training includes internships,
residencies and fellowships. GME funds are either designated to cover direct medical
education expenses or indirect medical education expenses.
More information about Graduate Medical Education payments.
Disproportionate Share Hospital (DSH) payments provide financial assistance to hospitals
that serve a large number of low-income patients such as people on Medicaid and
the uninsured. Medicaid DSH payments are the largest source of federal funding for
More information about Disproportionate Share Hospital payments.
Under the Health Information Technology for Economic and Clinical Health (HITECH)
Act, eligible health care professionals and hospitals can qualify for Medicare and
Medicaid incentive payments when they adopt certified EHR technology and use it
to achieve specified objectives.
More information about EHR Incentive payments.
The Safety Net Care Pool (SNCP) is a funding pool that uses monies from political subdivisions to
draw down federal matching dollars. The funds are then distributed to participating hospitals to help
defray the costs of uncompensated care provided to AHCCCS members and the uninsured.
More information about Safety Net Care Pool payments.
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