CMS Finalizes CY 2019 Payment Rules by AzHHA

Debbie Johnston, Senior Vice President of Policy Development

The Centers for Medicare & Medicaid Services (CMS) last week issued the final CY 2019 Outpatient Prospective Payment System (OPPS)/ambulatory surgery center (ASC) rule and the final CY 2019 physician fee schedule (PFS) rule. AzHHA members will receive a detailed analysis of the CY 2019 OPPS rule in the coming weeks, including a forecast of their hospital-specific impacts.

We are disappointed that CMS did not heed the concerns of hospitals regarding the expansion of Medicare’s “site-neutral” payment policies in both rules. Nor did the agency pull back on its proposal to reduce payment for 340-B acquired drugs in non-grandfathered off-campus provider-based departments to the average sale price minus 22.5 percent. These proposals ignore the crucial differences between hospital outpatient departments and other sites of care and will further strain safety-net hospitals that serve vulnerable communities.

We are very pleased, however, that CMS is finalizing its proposal in the CY 2019 PFS rule to ease regulatory burdens associated with the documentation of E/M visits and expanding Medicare coverage of telehealth and virtual care. We are also grateful that CMS modified its proposal to consolidate level 2 through 5 codes into a single blended rate. Instead, the agency will finalize a single blended rate for level 2, 3 and 4 office and outpatient visits, effective CY 2021. AzHHA will continue to urge CMS to ensure that physicians who treat a disproportionate share of higher-acuity patients are not financially penalized under this approach.

Election Results: The wait is over (almost) by AzHHA

Greg Ensell, Vice President Government Relations

After months of speculation that 2018 might be the year Democrats turned Arizona blue, it appears Republicans will keep their statewide seats and maintain control of the state Legislature. Democrats did, however, gain a congressional seat (CD-2) and appear to have picked up a handful of state House seats – meaning the GOP will have its narrowest House majority in recent memory.

As of Wednesday night, there were approximately 500,000 uncounted votes, primarily in Maricopa and Pima counties, which could make the difference in some races are currently too close to call. That includes one of the biggest nail-biters of 2018: the Sinema/McSally Senate Smackdown. We likely won’t know the outcome of that race – and a handful of others – until the end of the week.

Federal Races

Few races were as contentious, closely-watched and completely unpredictable as the campaign for Arizona’s U.S. Senate seat. For weeks, the battle to replace outgoing Sen. Jeff Flake has been neck-and-neck between Democratic Congresswoman Kyrsten Sinema and Republican Congresswoman Martha McSally. As of Wednesday, Rep. McSally holds a slim, roughly one-point lead in a race that is still too close to call.  

Regardless of who wins, history will be made when Arizona elects its first woman U.S. Senator . . . we’ll just have to wait a little longer to find who she’ll be.

Of the Congressional seats that were competitive (CD-2, CD-9, and CD-1), only one would change party. The return of Ann Kirkpatrick (D-Tucson) to Congress in CD-2 will shift the Congressional split in Arizona to favor Democrats 5 to 4. The new Congressman in CD-9 will be former Phoenix Mayor Greg Stanton (D-Phoenix).

Statewide Races

Arizona statewide offices are where the Blue Wave met a Red Wall.

Incumbent Republican Gov. Doug Ducey easily defeated Democratic challenger David Garcia by nearly 18 points, earning Ducey another four years representing the state’s highest office.

Attorney General Mark Brnovich will also keep his seat, defeating political newcomer January Contreras.

Meanwhile, Senate Majority Leader Kimberly Yee is now Treasurer Kimberly Yee. The Republican lawmaker decisively defeated Democratic challenger Mark Manoil for the position currently being held by gubernatorial appointee Eileen Klein.

In the Arizona Secretary of State’s race, it appears voters have narrowly selected Republican businessman Steve Gaynor over Democratic opponent Katie Hobbs. Republican Frank Riggs has a slight edge over Kathy Hoffman in the race for Superintendent of Public Instruction – but with less than 7,000 votes separating them, this one is still too close to call. 

Legislative Races

Assuming the votes hold, the House of Representatives will remain in Republican control . . . but they will cede some seats to the Dems. New makeup of the House looks to be a 31-29 advantage for the GOP, compared to the current 35-25 margin.

  • Democrats will pick up a seat in the House in LD 10 as Representative Clodfelter (R-Tucson) was defeated by Kirsten Engel and Domingo DeGrazia.

  • Democrats currently hold the second seat In LD 17, as Nora Ellen (R-Chandler) trails her democratic challenger, Jennifer Pawlik (D-Chandler) by roughly 400 votes. 

  • In one of the bigger surprises of the night, Representative Jill Norgaard (R-Phoenix) was defeated by Jennifer Jermaine (D-Chandler).

  • In LD 28, incumbent Representative Maria Syms (R-Paradise Valley) trails Democrat Aaron Lieberman (D-Phoenix) by 600 votes for the second seat in the House. 

Meanwhile, the Senate will most likely remain 17-13 in Republican control. Senator Brophy McGee (R-Paradise Valley) holds a narrow lead of roughly 1,500 votes over her Democratic challenger, Christine Marsh (D-Phoenix). Democrats were hopeful they could pick up a seat in LD 6, however, it looks as though Senator Sylvia Allen (R-Snowflake) will win her re-election. 

Court Rules for AHA in Medicare Appeals Backlog Case by AzHHA

Ann-Marie Alameddin, Vice President of Strategy and General Counsel

Last week a federal court ruled in favor of the AHA and its member hospital plaintiffs, and reinstated a mandamus order establishing annual deadline-based targets for reducing the backlog of Medicare appeals at the Administrative Law Judge level. This order requires that the Department of Health and Human Services achieve the following reductions from its own currently projected fiscal year 2018 backlog of 426,594 appeals: a 19 percent reduction by the end of FY 2019; a 49 percent reduction by the end of FY 2020; a 75 percent reduction by the end of FY 2021; and elimination of the backlog by the end of FY 2022.

Deadline to Apply for the Arizona Institute for Healthcare Leadership is Approaching by AzHHA

Shayna Diamond, Director of Community Affairs

Arizona healthcare organizations with an eye to the future have been sending their top talent to the Arizona Institute for Healthcare Leadership (AIHL), program for over a decade. AIHL develops healthcare professionals with leadership skills including emotional intelligence, communication and the ability to deal with change. In addition, AzHHA members receive a $250 discount when applying. Applications are due November 16th. The program overview, application, continuing education and more are available at For questions regarding the program contact Joanne Schlosser (480) 840-6024.