How the Senate budget reconciliation bill text would result in $2 billion in cuts to Arizona’s hospitals.
A coalition letter regarding Medicaid provider tax-related and directed payment program provisions.
Supporting the AzHHA PAC.
Senate budget reconciliation bill text would result in $2 billion in cuts to Arizona’s hospitals
On Monday, June 16, 2025, the Senate Finance Committee, which has jurisdiction over Medicare, Medicaid and tax policy, released draft bill text of its portion of the Senate budget reconciliation bill.
Why it matters: Much of the Senate legislative text mirrors H.R. 1, the House-passed bill. The most consequential differences in the Senate legislative text are:
The “hold harmless threshold” for provider taxes, which is 6% under current law, would be reduced by 0.5% annually until the threshold reaches 3.5% in expansion states, except for taxes on nursing homes and intermediate care facilities.
The payment limit for existing state-directed payments would be reduced by 10% annually until the amount is less than or equal to 100% of Medicare payment limits in expansion states.
The Senate bill text’s provision that would reduce the hold harmless threshold to 3.5% would result inapproximately $2 billion in cuts to Arizona’s hospitals when fully phased in.
Absent other changes, AzHHA estimates that Arizona hospitals’ average operating margins would fall from 6.1% to -1.5% and the percentage of Arizona hospitals with negative operating margins would surge to 55%.
What’s next: There is a very short window of time to influence these proposed policies.
The Senate plans to vote on its version of the budget reconciliation bill next week.
The House will then need to pass an identical bill, and the GOP hopes to have it signed into law by President Trump prior to the August recess.
Take action: Please contact your senators and representatives today to explain the devastating impacts these proposals would have on Arizona.
Coalition letter regarding Medicaid provider tax-related and directed payment program provisions
AzHHA joined 12 other hospital associations writing a letter to the Senate Majority Leader John Thune and the Committee on Finance Chairman Mike Crapo.
Why it matters: The letter urges the Senators to move forward with the carefully negotiated Medicaid provider tax-related and Medicaid directed payment program provisions in the House-passed budget reconciliation bill (H.R. 1).
The intent of the House bill is to grandfather existing state programs and funding mechanisms upon which our hospitals and our patients depend.
The bottom line: Hospitals across the states in the coalition that wrote the letter are facing unprecedented financial pressures. Chronic underpayment from Medicaid and Medicare, combined with increasing instances of commercial insurers failing to meet contracted obligations, has pushed many facilities to the brink.
Directed payments help offset these shortfalls by leveraging provider taxes and other lawful mechanisms to support hospitals that serve a high volume of Medicaid patients.
Support the AzHHA PAC and take a stand for Arizona hospitals
If you believe in strong hospitals, healthy communities and smart healthcare policy, then this is your cause.
The AzHHA Political Action Committee (PAC) is our shared commitment to protecting healthcare access and quality across Arizona.
Why it matters: Policy decisions made at the Arizona Capitol directly shape the care available in your community.
By supporting the AzHHA PAC, you help ensure that hospitals in urban, rural and everywhere in between have a powerful voice at the state and federal levels.
The big picture: This is about more than politics.
It’s about:
Standing with your fellow nurses, doctors and frontline teams who care for us all.
Defending the future of healthcare in our state.
The bottom line: Whether a one-time gift or a recurring commitment, your contribution helps shape a better tomorrow.
Thank you to everyone who attended the 2025 AzCHER Conference, where we explored the critical areas of readiness, response and recovery in healthcare.
Why it matters: This conference is pivotal for fostering a collaborative dialogue among industry leaders to enhance preparedness and training for healthcare threats.
Attendees gained valuable insights from experts, equipping them to better handle emergencies and recover quickly.
The turnout was impressive, reflecting strong engagement and commitment from the healthcare community.
A special thanks to our sponsors for their generous support and to our speakers for their invaluable contributions.
Future engagement: If you’d like to sponsor or speak at one of AzCHER's future events, please email us at azcheradmin@azhha.org.
Looking ahead: Please check back in the fall for information about our 2026 conference!
Community Health Needs Assessment and Improvement Plan published for Mohave County
On Monday, June 16, 2025, the Mohave County Department of Public Health and Kingman Regional Medical Center published two reports about health in Mohave County.
The 2025 Mohave County Community Health Needs Assessment and the 2025-2028 Mohave County Community Health Improvement Plan are available here.
Why it matters: Since 2012, the Mohave County Department of Public Health and Kingman Regional Medical Center have partnered to lead the “Live Well Mohave” initiative, prompted by aligning agency requirements.
Every three years, this initiative engages various community groups, local governments and healthcare allies in Mohave County to evaluate community health.
The result is a comprehensive effort to improve quality of life for people and families in Mohave County. Through collaboration across all sectors of the community, the effort encourages the effective use of limited resources for addressing unmet community health needs.
UPCOMING EVENTS
Save the date: 2025 Arizona Hospital Leadership Conference Mark your calendar and plan to engage with healthcare leaders during the AzHHA Foundation’s 2025 Arizona Hospital Leadership Conference. This year’s conference is Oct. 29-31, 2025, at the Loews Ventana Canyon Resort in Tucson, Ariz. Stay tuned for more information!
