5 Things Arizona: Health bills, Workforce shortages, HCBS spending plan


Eli Kirshbaum


As the legislative session begins, we invite you to let us know if there are any specific bills or topics you’d like to see us cover this year. Your input here is incredibly valuable.

This newsletter features several health bills being advanced by the legislature, Will Humble from AzPHA’s thoughts on Omicron-fueled staffing shortages, and a breakdown of Arizona’s recently-approved HCBS spending plan.

Thank you for reading!

Eli Kirshbaum
State of Reform


1. Health committees debate legislation

With committee work underway in the legislature, Reps. Cobb and Udall are sponsoring a bill to allow psychiatric and mental health nurse practitioners to perform psychiatric assessments for minors—something Cobb said they are adequately qualified for. Rep. Blackman is sponsoring legislation to double the current funding for the Healthy Families Arizona Program within DCS to $10 million. While supporters believe this significant increase is warranted, opposed legislators like Rep. Joseph Chaplick are concerned about the bill’s hefty price tag. Both of these bills were voted out of the House health committee.

Sen. Barto is relaunching an effort to cover chiropractic services through AHCCCS with SB 1077. Despite receiving strong bipartisan support in the past few sessions, the bill was stalled in the past due to budgetary concerns. Supporters are hopeful the bill will become law this year, however, as Senate Health & Human Services Chair Rep. Osborne—who chose not to hear the bill in her committee last year—has said she will do so this year.


2. 5 Slides We’re Discussing: Gene therapy and the promise for rare disease

We recently hosted a “5 Slides” discussion with Jennifer Hodge, Ph.D., U.S. DMD gene therapy lead at Pfizer, Danny Seiden, president and CEO of the Arizona Chamber of Commerce and Industry, Rafael Fonseca, M.D., chief innovation officer for Mayo Clinic, and Sharon Hesterlee, M.D., chief research officer for the Muscular Dystrophy Association, to discuss how gene therapy can be made more accessible and affordable.

Hodge said educating gene therapy developers about the human impact of rare diseases is critical. “It can’t be a line item in a bill, it can’t be something on a piece of paper that you hear about, it has to be someone telling their story [and] … thinking about the patient and what they’re going through.”

3. Hospital staffing shortages increase deferred care

As of Jan. 9, round 40% of hospitals in Arizona were reporting staffing shortages. State of Reform recently spoke to AzPHA executive director Will Humble about how these shortages are causing increased amounts of deferred medical care. Elective procedures concerning heart valves that aren’t life-threatening and hip replacements are being put off because hospitals simply don’t have the capacity for them amidst the Omicron surge, he said.

Humble emphasized that since rural hospitals aren’t part of big health systems, transferring patients is much more difficult. “They don’t have a system where they can move and transfer patients. They can’t move hospital staff around to help staffing problems … you’re just a small, non-profit hospital. You’re not part of any big system. So they’re at a huge disadvantage …”


4. CMS approves HCBS spending plan

CMS approved AHCCCS’s $1.5 billion HCBS spending plan last week, which primarily consists of ARPA funds. AHCCCS’s plan to strengthen HCBS includes $216.9 million to fund the expansion of a caregiver career pathway platform, $96.6 million to invest in HCBS telehealth delivery models, and $74.7 million to fund new and updated technologies and information systems that would improve care coordination and communication. The plan still needs final approval from the Arizona Legislature in order to be implemented.

AHCCCS says allowing Arizona Long Term Care System members to reside in their own homes and utilize HCBS results in significant program savings while also enhancing members’ quality of life. Among ALTCS members, 91% are currently receiving services in their own homes or in community-based settings, generating over $2.2 billion in annual ALTCS program savings.

5. Budget neutrality rules for section 1115 waivers

Now an integral part of 1115 waiver consideration, the requirement that state waiver proposals don’t exceed spending that would have occurred without the waiver hasn’t always been the norm. In this analysis, State of Reform columnist James Capretta breaks down the “budget neutrality” rule that CMS uses in its waiver approval process, explaining that federal statute doesn’t mention this criterion at all.

Budget neutrality first became a standard during the Reagan administration, Capretta says, due to concerns that states would use waivers to leverage more federal funding. He also explains that many states apply for 1115 waivers to pursue programs that don’t need waiver authority, like managed care initiatives, because using a waiver allows them to direct the saved money from the program to cover additional services and populations under Medicaid.