The House Republicans vowing to oppose the Senate version of the OBBB.
CMS finalizing a rule that will lead to decreased ACA marketplace enrollment.
The drama continues at the Arizona Legislature
As of Wednesday, June 25, 2025, there's still no state budget in place for the fiscal year beginning Tuesday, July 1, 2025.
What happened last week? House Republicans introduced and passed their original budget proposal without negotiating with Senate Republicans or the Governor’s Office.
The Governor made it clear that she would veto the proposal, and the Senate chose not to entertain it.
Meanwhile, the Senate had collaborated with the Governor’s Office to develop a budget plan, recognizing that a bipartisan approach was necessary to earn the Governor’s support. Their proposal included both of AzHHA’s main priorities:
A continued one-time increase to the critical access hospital supplemental fund in the amount of $4.3 million.
A commitment to end the $100 million sweep from the Hospital Assessment Fund after FY 2026.
The Senate worked late Thursday night and into Friday morning to pass the bipartisan plan.
Rather than waiting for the Senate budget, the House abruptly chose to adjourn and return on Monday.
After the Senate passed its plan, it moved to adjourn sine die. While this would usually mark the end of the session, technically, the Senate’s adjournment required approval from the House.
Where do things stand this week? The House returned Monday and started working on what some are calling “Budget 3.0”—a lean continuation budget to prevent a government shutdown while negotiations continue on the full FY 2026 budget.
Governor Hobbs made it clear she will veto any continuation budget and reaffirmed her support for the Senate-negotiated plan as the only path forward. The House moved quickly on Tuesday, passing the continuation budget bills through committees and on the floor on party-line votes.
Then came Wednesday: The Senate reconvened around 10 a.m. to vote on both the House’s original partisan budget and the House’s continuation budget.
Both budgets passed the Senate on party-line votes and have been transmitted to the Governor.
Where does that leave Arizona? In short:we’re in limbo.
As of now, there’s no clear budget plan and no public signals about what comes next. This is new ground for the Arizona Legislature—unlike anything we’ve seen under the current political dynamics.
There’s speculation that the House might entertain the Senate budget proposal after the House bills are vetoed, potentially allowing the House an opportunity to suggest amendments to the Senate version. However, what that entails and whether it progresses is still unclear.
What’s next: We will keep a close eye on the situation and update you as it unfolds. Stay tuned for updates from our policy and advocacy team.
House Republicans vow to oppose Senate version of the OBBB
Senate Republicans are scrambling to finalize their version of the budget reconciliation bill this week to enable passage by the House and obtain the President’s signature prior to the planned July 4 recess.
Some senators remain concerned about the consequences of steeper Medicaid cuts on rural hospitals.
Key moderate Sen. Susan Collins has rejected the idea of a rural hospital fund to offset effects of the Medicaid cuts as insufficient to resolve the concern.
Other senators would like to see even deeper cuts to government spending.
Sixteen House Republicans, including Juan Ciscomani (R-AZ), have warned Senate Majority Leader John Thune that they will not vote for a bill that reflects the Senate’s changes, stating “…we cannot support a final bill that threatens access to coverage or jeopardizes the stability of our hospitals and providers.”
The Senate Finance Committee draft includes not only the provider tax freeze in the House bill but also reduces the “hold harmless threshold” for expansion states from 6% to 3.5% over a period of years.
AzHHA has estimated that this provision would result in $2 billion in cuts to Arizona’s hospitals, and 55% of Arizona’s hospitals would operate with negative margins.
Meanwhile, in a letter sent to the House Budget Committee on Tuesday, the Congressional Budget Office concluded that the Medicaid cuts in H.R.1, the House-passed bill, will likely force states to cut provider reimbursement rates, significantly reduce enrollment and cut optional benefits.
CBO predicts that 7.8 million Americans will lose their health insurance because of the bill, broken down as follows: 4.8 million due to work requirements; 1.4 million due to citizenship and immigration status; and 2.2 million due to increased eligibility requirements and other provisions in H.R.1. (Note: These figures add up to more than 7.8 million because about 600,000 people would lose coverage for more than one reason.)
This analysis does not consider the steeper Medicaid cuts and provider tax restrictions that the Senate is considering.
CMS finalizes rule that will lead to decreased ACA marketplace enrollment
On Friday, June 20, 2025, the Centers for Medicare and Medicaid Services (CMS) published a rule on making changes for those who enroll in the Affordable Care Act (ACA) marketplace insurance plans.
Why it matters: While CMS expects that the rule will lower individual health insurance premiums by approximately 5%, the changes are expected to decrease the number of individuals who are able to obtain health insurance in the ACA marketplace by anywhere from 725,000 to 1.8 million people.
The lowered premium rates will also be more than offset by increased rates that many people will pay once the enhanced premium payments expire at the end of the year.
The final rule includes the following provisions:
Beginning with open enrollment for the 2027 benefit year, open enrollment will end on Dec. 15 instead of Jan. 15 for states, such as Arizona, that use the federal platform.
The monthly special enrollment period for individuals with incomes under 150% of the federal poverty guidelines will be eliminated.
CMS will tighten eligibility verifications and enrollees will no longer automatically receive an extension to verify their income if needed during the enrollment process.
Additional restrictions will be placed on Deferred Action for Childhood Arrivals recipients from receiving insurance coverage.
Second cohort of the Arizona Transition to Practice Program recognized
Why it matters: These nurses completed the rigorous 12-month program which provided them with structure and additional support beyond their clinical immersion needed to facilitate their transition into the workforce.
What they’re saying:
I’m so proud of each and every one of our new graduate nurses for their commitment to this program. I’d also like to acknowledge our site champions, preceptors and mentors for their outstanding efforts. The Arizona Transition to Practice Program is made possible by funding and support provided by the Arizona Health Care Cost Containment System (AHCCCS) and the Governor’s Office. We are grateful for their backing so we can tackle this important work.
-Karen Ofafa, EdD, MPH, BSN, RN, director, Transition to Practice Program
Congratulations cohort two!
The results are in: 2025 Member Survey
AzHHA recently completed its annual survey for CEOs of member hospitals.
Why it matters: The survey helps us understand if we are meeting the needs of our members with policy and advocacy work as well as additional services and programs.
By the numbers: Our response rate again reached 40% with this year’s survey. Additionally, the results exceeded our goals in these areas:
Policy and advocacy work – achieved an average satisfaction rating of 88 on a scale of 1 to 100.
Net promoter score – attained a score of 82, up from 74 in 2024.
For more context, overall satisfaction with AzHHA membership reached an average rating of 93 on a scale of 1 to 100.
What’s next: Based on the feedback, we will continue to evaluate ways we can meet our member needs, particularly in the most frequently identified areas of state policy, reimbursement/health plan issues, federal policy and regulatory issues.
Thank you to everyone who participated in this survey!
White paper: Understanding and optimizing your hospital’s physician base
AzHHA’s affiliated partner, 3Dhealth, which supports provider development planning, has released a white paper entitled “10 Answers You Should Know About Your Competitors’ Physician Base.”
Why it matters: This document outlines ten key questions to analyze and differentiate a health system's physician base from competitors, focusing on factors like size, specialty mix, patient access and appointment wait times.
Additionally, it highlights the need to address aging physician bases and consumer expectations to create a structural advantage in the market.
DHS issues a National Terrorism Advisory System Bulletin
On Sunday, June 22, 2025, the Department of Homeland Security (DHS) issued a National Terrorism Advisory System Bulletin about the potential for Iranian-related cyber and physical attacks against the United States homeland.
Why it matters: While there are no specific, credible threats to the U.S. homeland or healthcare organizations, this is a good reminder to increase vigilance to guard against possible physical and cyber threats.
Increase cybersecurity monitoring and defensive measures of internet-connected operational technology systems, building automation systems and third-party service and technology partners.
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.
1Q2025 Hospital-Acquired Condition (HAC) Analysis (sent Thursday, June 5, 2025)
1Q2025 Value-Based Purchasing (VBP) Analysis (sent Wednesday, June 11, 2025)
1Q2025 Quality Program Measure Trends (sent Thursday, June 12, 2025)
UPCOMING EVENTS
Sept. 7-12 - National Tribal Health Conference This is a week-long event that serves American Indian and Alaska Native Tribes in the space of health - behavioral and public health. The conference will showcase the interconnectedness of policy, advocacy and Indian health best practices. Register now.
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!
