Provider Payment Information (updated 12/01/2022)

In its American Rescue Plan (ARP) Act Home and Community Based Services (HCBS) spending plan, AHCCCS received federal approval to allocate almost $900 million over three years in one-time provider payments to recruit and retain a knowledgeable and well-trained workforce. These time-limited payments will be made in State Fiscal Years (SFY) 2022, 2023, and 2024. AHCCCS anticipates making the SFY 2022 payments in the spring of 2022.

The SFY 2022 provider payments total more than $500 million and will be paid by the AHCCCS managed care organizations (MCOs) and the fee-for-service (FFS) administration to providers serving members enrolled in all AHCCCS programs. Of note, the Department of Economic Security/Division of Developmental Disabilities (DES/DDD) will make direct payments to its contracted providers using a methodology similar to that used by AHCCCS. Providers should also note that AHCCCS is allocating greater funds to this SFY 2022 payment than in subsequent years due to the immediate needs of the workforce.

The AHCCCS managed care provider payments, called “directed payments,” will be computed by applying a flat percentage rate to eligible providers’ prior Title XIX Medicaid payments from a specified time period for select ARP qualifying codes. For SFY 2022:

  • The flat percentage is 17.8%,
  • The specified time period is dates of service from October 1, 2020 through March 31, 2021. The six months of data will be doubled to approximate a full year of payments. This time period was selected to comply with CMS requirements regarding directed payments, which does not permit AHCCCS to select a period earlier than October 1, 2020, and
  • Nearly 70 ARP qualifying procedure codes summarized by category.

Approximately 1,800 AHCCCS managed care providers are expected to qualify for SFY 2022 payments. Based on this significant number of impacted providers, and the application of nearly 70 procedure codes, only approved and adjudicated encounters in the AHCCCS database will be utilized in the computations. AHCCCS will not consider any other data when computing payments, including validation or verification of provider computations. Provider payments may be made by multiple MCOs and involve multiple transactions in the same proportion that claims payments from the specified period were received.

Approximately 3,570 provider agencies will receive one-time, directed payments from DES/DDD utilizing a similar methodology, though the percentage rate applied to prior Medicaid payments will vary by service category. The DES/DDD directed payment strategy was informed by stakeholder input received in response to the provider rates which became effective October 1, 2021.

Working within federal and state guidelines, AHCCCS has developed the methodology for making time- limited payments to fee-for-service (FFS) providers. FFS provider payments will utilize the same ARP qualifying services as those identified for the AHCCCS managed care Directed Payments for eligible providers. Both non-Indian Health Service /638 tribal (IHS/638) providers, and IHS/638 providers, could be eligible for payment.

All information contained in this notice is subject to change if any amendments to the ARP HCBS spending plan impact available funding. In addition, the total payment amount across all three years, the SFY 2022 payment values, and the SFY 2022 payment percentages, are subject to change.

ARP Directed Payment Provider Guidance

Guidance regarding ARP provider payments as authorized by Laws 2022, Second Regular Session, Chapter 2 and the Centers for Medicare and Medicaid Services (CMS) through 438.6(c) is available at the links provided below. To the extent that CMS requires changes to the payment methodology and/or process, this guidance may be updated.

These SFY 2022 payments are one-time payments for HCBS and Rehabilitation providers. AHCCCS does not intend to continue this level of funding permanently.

The Provider Directed Payment Guidance available at the link below is for all lines of business, except ALTCS-DD. The DES/DDD issued its own guidance and requirements for ALTCS-DD providers, which can be found on the DDD ARP web page.

As outlined in this AHCCCS guidance, there are requirements regarding how the funds are to be utilized. Eligible providers must attest that they will follow these guidelines. The eligible providers included in the Individual Eligible Providers with NPI (Non-DDD) list (link below) are providers contracted through the MCOs.

AHCCCS has developed a similar process for providers reimbursed through the FFS program. FFS providers who provided attestation through the MCO will be required to submit a separate FFS attestation prior to distribution of FFS payment.

ARP HCBS Directed Payments SFY 2022 Update - Providers have until February 28, 2023 to expend SFY 2022 ARPA HCBS Directed Payment funds

AHCCCS has previously communicated that the State Fiscal Year (SFY) 2022 ARP HCBS directed payments made by Managed Care Organizations (MCOs) in April/May 2022 must be spent by December 31, 2022 for expenses that occurred between January and December of 2022. AHCCCS has extended the deadline to spend ARP SFY 2022 HCBS directed payments to February 28, 2023 for expenses that occurred between January 2022 and February 2023. See links below for previous guidance on how these funds must be used. All prior guidance is applicable, except for the time period to spend the funds, which is now extended until February 28, 2023.

ARP Provider Payment Resources

Provider questions about ARP Directed Payments can be emailed to: