Letter to Alex Azar, Secretary of the Dept. of Health and Human Services, and Seema Verma, Admin. for the Centers for Medicare and Medicaid Services - Sinema Leads Arizona Congressional Delegation in Urging Federal Government to Provide Relief for Arizona's Medicaid Providers

Letter

Dear Secretary Azar and Administrator Verma,

The ongoing COVID-19 pandemic places substantial financial burdens on Arizona's health care system
and providers. While we understand that the distribution of some Coronavirus Aid, Relief, and Economic
Security (CARES) Act relief payments have begun, many hospitals and providers face severe cash
shortages and uncertain futures. In the coming weeks, many facilities will have difficulties meeting
payroll and purchasing needed supplies to respond to the disaster. Therefore, we request that you give
immediate consideration to the state of Arizona's request for a Section 1115 waiver to allow retainer
payments be made to essential Medicaid providers. The request was submitted on March 24, 2020 by our
state's Medicaid program, known as the Arizona Health Care Cost Containment System (AHCCCS).

Hospitals and health care providers have been asked to ramp up capacity in anticipation of a surge of
seriously ill COVID-19 patients. Since the first reported cases in Arizona, our health systems expended
considerable sums to acquire diagnostic tests, purchase additional personal protective equipment (PPE),
and increase staff to ensure the safety and health of Arizona communities. In addition, on March 26,
2020, Arizona Governor Doug Ducey issued Executive Order 2020-16 requiring all hospitals to increase
bed capacity by 50 percent by April 24, 2020, further straining budgets. At the same time, all Arizona
health care facilities experienced revenue declines of 30 to 40 percent, primarily related to the
cancellation of elective procedures and reduced emergency department visits. Some estimates indicate
that hospitals in Arizona have seen a revenue reduction of $430 million to $575 million per month since
March.

Retainer payments through AHCCCS could allow providers to address shortfalls resulting from the loss
of revenues associated with fewer elective procedures and reduced service volumes. The payments will
provide an important source of supplemental funding to ensure provider sustainability during this time as
members of the public stay at home and reduce unnecessary visits. While the recently passed coronavirus
legislation provided new flexibilities to enable the expansion of telehealth capabilities, many patients and
providers in rural Arizona lack access to reliable broadband. Additionally, telehealth cannot provide all
services. Ensuring that our health care providers can remain financially viable and keep their doors open
to serve our communities during and after this public health emergency is critical. AHCCCS has a strong
record of program integrity, and we trust its ability to approve retainer payments in a fiscally responsible
manner for service providers most in need.

While some facilities may eventually be able to access new small business loans in the CARES Act, and
may have started to receive funding from the Public Health and Social Services Emergency Fund and the
Medicare Advance Payment program, it could take many weeks before the funding arrives and is
available for AHCCCS providers. Some of our rural, safety net providers informed us that they may be in
danger of closing their doors permanently before the end of this month. In accordance with all existing
agency rules, regulations, and ethical guidelines, we therefore ask that you approve Arizona's request for
a Section 1115 waiver to authorize retainer payments for all appropriate provider types, including but not
limited to hospitals, physicians, dentists, and home and other providers.

Sincerely,