Ways and Means scrutinizing hospital CEOs on costs, consolidation and site-neutral payments.
AzHHA issuing RFP for audit and tax services.
Budget talks ramping up again
The Arizona Legislature returned this week to introduce its initial package of budget bills — and off to a more promising start than last year.
Unlike the previous session, where the House and Senate released separate budget proposals that created confusion and friction within the majority party, both chambers this year took a collaborative approach and released a joint proposal from the outset.
Mirror budget bills were dropped simultaneously in the House and Senate on Monday, followed by a joint appropriations committee meeting on Tuesday morning.
The committee heard testimony on each bill and held off on voting until all testimony was complete.
The package ultimately passed on a party-line vote, advancing the bills to the House Committee of the Whole on Wednesday.
As for the Senate, things are less clear.
Rumors are circulating, but the Senate has confirmed it will recess until next week.
Some attribute the pause to members being out of town; others point to a lack of votes to pass the budget.
What’s next: We will be monitoring the House closely for the remainder of the week and will keep you updated as the situation develops.
AzHHA members should be on the lookout for a detailed breakdown of the budget landing in their inbox this week.
AzHHA priority bills - momentum continues: Amid the budget activity, we are pleased to report significant progress on one of our priority bills.
SB1162(health care institutions; licensing; compliance) passed with a strong 49–8 vote. This practical, consensus-driven legislation will modernize the regulation of healthcare institutions in Arizona.
Notably, an amendment added in the House strengthens the bill further by addressing a critical gap in the behavioral health workforce.
Because the bill was amended in the opposite chamber, it will now be transmitted back to the Senate for final concurrence. A meaningful step in the right direction!
Ways and Means scrutinizes hospital CEOs on costs, consolidation and site-neutral payments
On Tuesday, the House Ways and Means Committee held a hearing scrutinizing the CEOs of HCA Healthcare, CommonSpirit Health, NewYork-Presbyterian and ECU Health over increasing hospital prices, industry consolidation, nonprofit tax exemptions and site-neutral payment policies.
Ways and Means Chairman Jason Smith (R-MO) opened the hearing with sharp criticism, accusing hospitals of overcharging patients and exploiting federal programs.
He contended that “[h]ospitals with more than 100 beds have a higher profit margin than Delta Airlines, Disney and Target… Hospital prices have skyrocketed 300 percent in just over two decades – more than any other sector of our economy.”
Chairman Smith referenced a recent report finding that hospitals accounted for nearly one-third of U.S. healthcare spending in 2024.
Ranking Member Richard Neal (D-MA) and Democrats framed the hearing as a GOP effort to distract from the massive Medicaid cuts in H.R. 1 and the broader affordability crisis facing patients.
Ways and Means member Lloyd Doggett (D-TX) remarked that “[t]his is more a deflection hearing than a hospital hearing.”
Compared with Republicans, Democrats’ criticism of hospitals was more subdued.
In response to GOP attacks, the health system CEOs attributed rising hospital spending to sicker and more complex patients, uncompensated care, higher drug and labor costs, health insurer practices, administrative burdens and technological advances.
They also acknowledged that hospitals rely on higher commercial rates to offset losses from Medicare and Medicaid.
Site-neutral payment policy was a recurring focus.
Chairman Smith stated that “Congress – including this Committee – has taken efforts to right this wrong and ensure patients and taxpayers pay lower prices for the same service with the same quality. But every time we try to advance these so-called “site-neutral” policies, big hospitals fight us tooth and nail.”
Hospital CEOs defended the higher costs associated with hospital-based care, but as the hearing progressed, some suggested they may be willing to consider narrow changes to site-neutral payment policy. “I think there [are] absolutely opportunities, as we look at site neutrality, to look where things aren’t reasonable,” said NewYork-Presbyterian President and CEO Brian Donley, M.D.
Chairman Smith also raised concerns about the 340B program, arguing that large systems manipulate the program to retain drug discounts rather than pass savings on to low-income patients.
Dr. Donley responded that major urban hospitals support rural facilities by accepting referred patients, and that NewYork-Presbyterian uses 340B savings to care for patients “as designed.”
The American Hospital Association submitted a statement for the record emphasizing rising workforce costs, higher-acuity patients, medical supply and drug inflation, insurer practices and administrative burdens as key drivers of hospital financial pressure.
AzHHA issues RFP for audit and tax services
AzHHA has issued a request for proposals (RFP) for audit and tax preparation services beginning with the 2026 audit year.
The big picture: Services include an annual financial statement audit, federal single audit and tax return preparation across multiple nonprofit and for-profit entities.
The selected firm will support a complex, multi-entity organization, including a 501(c)(6), 501(c)(3), 501(c)(4) and affiliated for-profit subsidiaries.
The bottom line: AzHHA is seeking CPA firms with strong nonprofit audit experience, particularly with trade associations, grant funded programs and consolidated financial statements.
The organization has approximately $8 million in annual operating revenue and administers federal, state and private grant funding, making single audit experience essential.
What’s next: Proposals are due on Friday, May 22, 2026, with selection subject to approval by the AzHHA Finance & Audit Committee.
Firms based outside of Arizona are encouraged to apply, provided they demonstrate flexibility for onsite fieldwork as needed.
Now available: 2026 Arizona Hospital Leadership Conference Sponsorship Prospectus
Join this year’s Sponsorship Program for the 2026 Arizona Hospital Leadership Conference, Oct. 21-23 in Tucson, Ariz., and have the enhanced ability to reach more than 200 hospital and healthcare industry leaders.
Choose from bundled options at the Title, Quality Awards Luncheon, Platinum, Gold or Silver level, or select an a la carte Bronze option.
The big picture: By sponsoring the AzHHA Foundation’s 2026 Arizona Hospital Leadership Conference, you will have opportunities to:
Gain corporate exposure and brand visibility with healthcare decision-makers.
Secure exclusive, high-impact networking time with hospital executives in an intimate setting to build meaningful connections.
Attend conference sessions, including keynote and breakout sessions on Thursday and Friday.
Achieve insight into Arizona’s healthcare community, including strengths and issues.
Support hospitals’ delivery of quality care.
Go deeper: View the entire prospectus here and access the Intent to Sponsor Form here.
AzHHA releases DataGen reports
In relationship with DataGen, AzHHA distributes reports to hospitals based on information submitted to the Centers for Medicare and Medicaid Services. DataGen generates hospital-specific reports which are sent to AzHHA hospital members as part of their membership.
Why it matters: This data helps hospitals understand the financial impact of proposed changes and annual updates.
The reports can also assist in preparing budgets or benchmarking results with other similar organizations.
The below reports were recently sent to members:
CYs 2020-2024 ED and observation analysis (sent Friday, April 3, 2026)
Friday, May 1, 2026 - From Crisis to Care: Improving Outcomes in Arizona’s Behavioral Health System The Arizona Public Health Association’s 98th Annual Conference will focus on strengthening Arizona’s behavioral health system and improving outcomes for people with mental and behavioral health needs. This year’s conference will highlight innovative strategies, evidence-based practices and policy approaches that move the system beyond crisis response and toward sustainable, person-centered care. Learn more and register.
Monday, May 11, 2026 - Medical Leadership in Disaster Preparedness and Response This half-day virtual conference will bring together individuals who have a medical role during disasters to discuss the spectrum of medical leadership responsibilities and some of the specific challenges of this role. Topics will include developing/implementing best practices during a disaster, navigating downtime, using data for action, learning about the new disaster medicine subspecialty and discovering healthcare surge tools. Register now.
Friday, May 15, 2026 - West CMS QIN-QIO Region 7 Emergency Preparedness Webinar In 2023 and 2025, the Maui, Palisades and Eaton fires forced urgent evacuations that tested emergency preparedness plans across the healthcare system and challenged hospitals, nursing homes, public health agencies and emergency responders. The Health Services Advisory Group is hosting a webinar to bring together firsthand insights on what worked, where challenges emerged and how lessons learned can strengthen emergency preparedness across all provider types. Register today.
Tuesday, May 19, 2026 - 2026 Healthier Together Summit Contexture is presenting a summit that will include engaging discussions and dynamic sessions on the evolving Arizona health ecosystem, statewide priorities and innovative approaches to improving outcomes. This year’s gathering brings together leaders, innovators and community partners from across the state to inform, inspire and strengthen the partnerships that move whole person health forward. Learn more and register.
June 9-10, 2026 - 2026 AzCHER Healthcare Emergency Preparedness Conference This year’s theme is “Many voices, one mission: Advancing healthcare preparedness together.” The one-and-a-half-day conference features sessions shaped by member feedback and brings together experts across healthcare, public health and emergency management. Register now.
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 and registration information will be shared in the coming months. Questions may be directed to communications@azhha.org.
