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Connection newsletter – the latest health news, events and information for Arizona healthcare

Quarterly hospital finance report released, transition to practice request for proposal and AzHHA’s latest advocacy efforts are summarized in this week’s Connection newsletter.

Legislative Update - another six week recess

The Legislature resumed business for two days this week, then adjourned again until Monday, July 31. This week marks over 155 days of legislative session, and while they adjourn for six more weeks, it’s worth noting that members continue to collect their per diem stipends. While they were working on Monday and Tuesday, the legislature sent more than a dozen pieces of legislation up to Governor Hobbs, bringing the total of passed bills to 305. That being said, Governor Hobbs has already stated her intent to veto several of them—including a major transportation issue—the Prop. 400 tax extension which has been a highly fraught policy issue all year.

Additionally, Sen. Steve Kaiser (R-Dist. 2) announced he will resign this week, and Minority Leader Rep. Andres Cano (D-Dist. 20) will step down in July. This leaves two more vacancies to fill—one for the Maricopa County Board of Supervisors and one for Pima County Board. This has certainly not been a session of bipartisan compromise or collegial working relationships, and a six-week break is unlikely to put anyone in a better mood when they return to work in August. There are very few bills that could, procedurally, move forward, so the only remaining thing to address is the Governor’s nominees to lead executive agencies, which could have happened at any point in the last several months.

With no pressing issues to discuss, we will not hold a Friday member call. If anything changes and the Legislature resumes before July 31, you can expect an update in Connection.

AzHHA releases 2023 Q1 Quarterly Financial Analysis

Last week AzHHA released its Quarterly Financial Analysis for the first quarter of 2023. For the first time in over a year, overall hospital net operating margins were positive at 2.7%. While this is an improvement, they still have a way to go with most experts agreeing that hospitals need to maintain operating margins of approximately 4%-6% to be able to reinvest in their facilities and equipment. Unsurprisingly, expenses continue to increase across the board. Additionally, overall patient volumes were up, with outpatient admissions rising quicker than inpatient admissions.  

Health plans continue to see large profits

While hospitals across the nation and in Arizona struggle to maintain positive net operating margins, the first quarter of 2023 was extremely profitable for most large health plans according to Modern Healthcare. UnitedHealth Group saw net income increase by 16% to $8.1 billion, Elevance Health reported net income growth of 17% to $2.8 billion, Cigna’s net income rose by 6% to $1.2 billion, and Humana’s net income grew by 33% to $1.2 billion. While CVS Health reported $2.1 billion in net income, this was down 9%.

ADHS Seeking Feedback on Draft EMS Rules

The Arizona Department of Health Services (ADHS) is reconvening a workgroup this summer to discuss revisions to the ground ambulance rules. Draft Rules for Articles 9, 10, and 11 have been posted on the ADHS rulemaking webpage and are open for comment until July 2. The webpage also includes historical notes from previous meetings. For your convenience, links to the drafts and online surveys are provided below:

Article 9: June 2023 Draft | Online Survey

Article 10: June 2023 Draft | Online Survey

Article 11: June 2023 Draft | Online Survey

AzHHA submits comments to CMS on proposed IPPS and LTCH Medicare rule

AzHHA last week submitted two comment letters on the proposed Fiscal Year (FY) 2024 Medicare rates.

  • Hospital Inpatient Prospective Payment Systems (IPPS) for Acute Care Hospital Prospective Payment System Proposed Rule letter
    • expressed concern for the woefully inadequate rate update of 2.8% in light of the unprecedented inflationary environment
    • asks the Centers for Medicare and Medicaid Services (CMS) to implement, for FY 2024, a retrospective adjustment to account for the difference between the market basket adjustment that was implemented for FY 2023 and what the market basket is currently projected to be for FY 2023, a difference of 3.0%
    • asks CMS to eliminate the productivity cut for FY 2024
  • Long-Term Care Hospital Prospective Payment System Proposed Rule letter
    • expressed concern about the woefully inadequate rate update given the unprecedented inflationary environment and asked CMS to eliminate the productivity cut
    • noted apprehension for increasing the outlier threshold by a staggering 150%
    • expressed angst with a number of changes to the Quality Reporting Program

Behavioral Healthcare Integration

A report released by the Bipartisan Policy Center (BPC) reveals a shortage of behavioral health specialists in rural areas of America making it challenging to access proper healthcare. More than 60% of non-metropolitan counties do not have a psychiatrist, and almost half do not have a psychologist. As a result, primary care providers play a significant role in providing care in these areas, highlighting the importance of integrating primary care and behavioral health services.

Apply for your AzHHA Quality Award

The inaugural AzHHA Quality Awards are now open to outstanding applicants. Hospitals must be able to highlight a recent project in Quality and Patient Safety, Community Engagement or Emergency Management. Winners will be presented with their AzHHA Quality Award at the 2023 Arizona Hospital Leadership Conference in October. Download our flyer and read the application instructions here. The deadline for submissions is Monday, July 31, 2023.

🚨 Transition to Practice Program request for proposals 🚨

AzHHA is seeking a national vendor for an evidence-based curriculum to implement its new Transition to Practice Program.


Arizona is experiencing a severe nursing shortage that was exacerbated by the COVID-19 pandemic. While it is important to increase the number of new nurses in the pipeline, it is also important to retain new nurses in their roles.

New graduate nurse turnover was high before the pandemic and only increased throughout the pandemic. A formal New Graduate Registered Nurse Transition to Practice Program (TTPP) provides another level of support for new nurses and has been shown to increase retention.


The successful applicant will demonstrate the ability to provide the following:

  • evidence-based program curriculum that includes content to promote clinical decision-making, leadership, and professionalism in the novice nurse. 
  • curriculum to include or be augmented to contain emergency preparedness, quality of care, and health equity principles.
  • support that accelerates and improves the transition to practice for novice nurses over approximately a year along with the ability for individual goal setting.

Download RFP

DEADLINE: June 21, 2023

Contact [email protected] with any questions.


September 15 - AIM Collaborative Conference - Register now for our second annual event focusing on AIM’s obstetric hemorrhage maternal health bundle. Hear from engaging speakers from around the state presenting on maternal health initiatives and integrating health equity into patient care. Attendees will include clinicians and executives from hospitals and birthing facilities, leaders from state agencies, community partners, not-for-profits, tribal healthcare, and students. Sponsorship opportunities are available; contact [email protected].


Margins are stable, but hospitals are on 'dangerously thin ice': Report (

CMS launches primary care pilot to expand value-based care | Healthcare Dive