Senate Health and Human Services Committee: At the time of writing, the committee planned to hear SB1162 (health care institutions; licensing; complaints). With Senator Angius’s support, AzHHA offered an amendment to narrow the bill’s oversight of hospitals.
Another priority, SB1253, would clarify and expand safe‑haven provisions, allowing parents to surrender a newborn immediately after an in-hospital delivery.
We appreciate Senator Mesnard’s leadership on this measure. We’ll recap the hearing in the Friday legislative update.
Friday member call: Make sure you’ve registered for the Friday legislative update call.
Registered participants receive a Zoom email with a calendar link. If you don’t see the event on your calendar or have trouble connecting, please contact Donna Di Orio for help.
Spending package funds HHS through September, extends flexibilities and enacts PBM reforms
On Tuesday, Congress approved and President Trump signed into law an appropriations package that funds most federal agencies through the end of the federal fiscal year.
The bill includes $116.6 billion in discretionary funding for the Department of Health and Human Services (HHS).
The legislation ended the brief partial government shutdown that began on Saturday, Jan. 31, 2026, due to an impasse over appropriations for the Department of Homeland Security.
The deal also finalizes key healthcare extenders including extensions of Medicare telehealth flexibilities, the Acute Hospital Care at Home waiver and supplementary funding programs for rural and safety-net hospitals.
The bill also eliminates Medicaid DSH cuts through Sept. 30, 2027, and requires separate identification numbers and attestations for off-campus hospital outpatient departments.
It does not include an extension of the Affordable Care Act enhanced premium subsidies that expired at the end of 2025.
The appropriations bill also includes pharmacy benefit manager (PBM) reforms aimed at tighter oversight of business practices and contract terms.
Among the reforms are policies requiring PBMs to accept “bona fide service fees” for Medicare Part D drugs to prevent PBMs from tying compensation to higher-list-price drugs driven by rebate maximization.
The bill also contains new reporting and audit requirements and requires PBMs to pass through 100% of manufacturer rebates, fees and other remuneration to payers.
Medicare Advantage prior authorization: By the numbers
Medicare Advantage insurers made nearly 53 million prior authorization determinations in 2024, according to Centers for Medicare and Medicaid Services (CMS) data analyzed by KFF.
By the numbers:
Medicare Advantage enrollees averaged 1.7 prior authorization requests each in 2024. In contrast, prior authorization remains rare in traditional Medicare, with roughly 0.02 requests per beneficiary.
Medicare Advantage plans fully or partially denied 7.7% of prior authorization requests in 2024, totaling 4.1 million decisions.
Only 11.5% of Medicare Advantage denials were appealed, but more than 80% of those appeals were partially or fully overturned, meaning many initially denied services were ultimately approved after additional review.
Prior authorization use and denial rates varied across Medicare Advantage insurers.
Why it matters: As prior authorization continues to draw scrutiny from regulators, lawmakers and beneficiaries, the data highlights a persistent tension: while denials are relatively infrequent, they are often reversed on appeal.
This raises concerns about delays in care, administrative burden for providers and whether some patients face avoidable barriers to timely access to medically necessary services.
AHA’s 2026 Advocacy Agenda in brief
The American Hospital Association (AHA) has released its 2026 Advocacy Agenda, which is a federal policy roadmap AHA uses to guide its engagement with Congress and the Administration.
Why it matters: The agenda’s contents signal AHA’s near-term legislative and regulatory priorities and can be used to align hospitals’ government affairs strategies, talking points and stakeholder education.
The agenda frames the following four priorities for 2026:
Ensure access to and affordability of care. AHA’s top focus is protecting access to essential services in every community, making care more affordable and ensuring hospitals have sustainable funding. Key aspects include safeguarding federal funding for Medicare, Medicaid, CHIP and the Affordable Care Act (ACA) Marketplace, extending the enhanced premium tax credits, opposing additional site-neutral payment cuts, protecting 340B, and holding commercial health insurers accountable for inappropriate denials and excessive utilization management.
Strengthen and support the healthcare workforce. AHA prioritizes tackling workforce shortages by investing in recruitment, retention and training. AHA calls for stronger protections against violence in healthcare settings, increasing the number of residency slots eligible for Medicare funding while rejecting cuts to Medicare, GME and reducing administrative burdens that contribute to burnout.
Reduce burdensome and unnecessary regulations. AHA calls for eliminating outdated and duplicative requirements, especially Conditions of Participation and overlapping/conflicting rules across agencies, which drive inefficiency and divert resources from care. AHA also prioritizes modernizing and standardizing payer processes like prior authorization to reduce administrative costs.
Spearhead innovation to advance health. AHA supports policy frameworks that allow innovation to scale, especially around AI, while protecting privacy and patient safety. AHA calls for making coverage of certain telehealth services permanent, continuing the Centers for Medicare and Medicaid Services (CMS) hospital-at-home program, creating incentives to support the shift to value-based care and improving health IT infrastructure.
Last chance to register: 2026 AzCHER Medical Response and Surge Exercise
Join the AzCHER team for the 2026 Medical Response and Surge Exercise (MRSE).
Why it matters: This exercise is designed to enhance your preparedness, foster collaboration and identify and address gaps in your response capabilities.
Who should register?
Acute care hospitals
Behavioral health hospitals
Long-term care facilities
State, tribal and county emergency management and public health departments
Emergency medical services
Transfer centers
Exercises will be held by region:
Central region: 9 a.m. to 2 p.m. on Wednesday, April 1, 2026
Southern region: 9 a.m. to 2 p.m. on Wednesday, April 8, 2026
Northern region: 9 a.m. to 2 p.m. on Tuesday, April 28, 2026
Western region: 9 a.m. to 2 p.m. on Wednesday, April 29, 2026
Michaels is a national leader in residential real estate, offering full-service capabilities in development, property and asset management, construction and investment management.
Get to know Michaels: Founded in 1973, Michaels has long been a housing provider of choice for cities, housing authorities, universities and the Department of Defense, among others, and has developed and manages all segments of the market from subsidized public housing to tax credit, military and student housing, and market-rate multifamily.
Now, amidst a mounting workforce housing crisis that’s pushing Americans out of the communities where they work, Michaels is leveraging its decades of experience to address the “missing middle,” focusing its expertise on creating attainable workforce housing.
Michaels has recognized that the lack of attainable workforce housing has become especially acute for healthcare systems, impacting hospitals’ ability to recruit and retain essential workers, in turn affecting patient care and driving up operating costs.
As a partner to several leading healthcare systems, Michaels is offering innovative solutions that leverage the unique strengths and resources of each partner, allowing the healthcare professionals to concentrate on delivering care, while Michaels delivers the housing.
Now, AzHHA members, whose teams and systems are experiencing issues spurred by the lack of attainable housing in their communities, have access to Michaels’ specialized expertise. This includes a complimentary market and feasibility study, including preliminary site, zoning and financial underwriting of new housing developments.
What’s next: Learn more about housing solutions that are customized for a healthcare workforce by visiting Michaels’ website.
UPCOMING EVENTS
Wednesday, Feb. 11, 2026 - Overview of Arizona hospital assessments and HEALTHII payments Join us for a 1-hour member’s only webinar for a concise, practical overview of Arizona’s hospital assessments and the HEALTHII payments that are now a major source of hospital reimbursement statewide. We will explain how the assessments work, how funds flow and why they are critical to supporting AHCCCS coverage and provider payments, then turn to major federal changes ahead, including assessment cap reductions under P.L. 119‑21 (the One Big Beautiful Bill) and CMS’s move to embed state‑directed payments into managed care rates beginning in 2027. AzHHA members who did not receive an email and would like to attend may reach out to Donna Di Orio.
Friday, Feb. 13, 2026 - The Hertel Report Winter State of the State This bi-annual conference offers networking and timely insights on Arizona’s healthcare market, including Medicaid, Medicare Advantage, the Affordable Care Act Marketplace, ACOs and commercial trends. Speakers include AzHHA’s SVP of Policy and Advocacy Helena Whitney. AzHHA members can use coupon code AZHHA2026 for $15 off. Register here.
Tuesday, Feb. 17, 2026 - Arizona Rural and Public Health Policy Forum Join the 2026 Policy Forum for in-depth discussions on pressing rural and public health policy issues and their impact on communities statewide. This year’s forum will feature insights into legislative priorities for the upcoming session and conclude with a special networking reception. Learn more and register.
Save the Date: 2026 Arizona Hospital Leadership Conference Mark your calendar for the AzHHA Foundation’s 2026 Arizona Hospital Leadership Conference, taking place Oct. 21–23 at the El Conquistador Tucson, a Hilton Resort. This annual gathering brings together hospital and healthcare leaders from across the state for engaging discussions, networking and forward‑focused learning. Additional details, registration information and sponsorship opportunities will be shared in the coming months. Questions may be directed to communications@azhha.org.
