Arizona FQHCs sue AZ Medicaid program for unpaid services, cite 9th circuit case

Last week, several Arizona federally qualified health centers (FQHCs) filed a lawsuit seeking payment for a series of health care services that were provided to low income, uninsured Arizonans. The lawsuit claims that the state is required to reimburse FQHCs for care in “medically underserved areas.” Reimbursement includes services provided by doctors, dentists, podiatrists, optometrists, and chiropractors. 

Attorneys who filed the suit claim that AHCCCS is required to pay for the services provided to these individuals even if the state does not provide some of these services to those enrolled in the state’s health care program. Many optometrics and dental appointments are not covered under Arizona’s current Medicaid program, but were provided to to other low income uninsured individuals at these centers. 

The total cost of care that has been provided is unknown at this point. 


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Federally qualified health centers are set up under federal law to provide medical care in underserved areas of the state. In the opinion of the case, it is federal law to provide these services, and thus the state must reimburse for the costs. These services will be required to be reimbursed 100% on a per-visit basis. 

In a 2016 California 9th circuit court of appeals case, the procedure for reimbursement by states to FQHCs was upheld despite the limiting nature of states’ individual Medicaid requirements. While the case took place in California, the law is to be upheld by all states that reside within the 9th circuit, including Arizona. 

“…the decision concludes that RHCs and FQHCs must still be reimbursed by Medicaid for providing these services to their patients,” the case concluded. 

The lawsuit will ultimately ask the judge to require AHCCCS to reimburse these health centers for the full cost of care, and use this 9th circuit case as the backbone for the argument. 

There has not been a date set for the proceedings, and AHCCCS has not released an official statement on their position following filing.