AHCCCS Hospital Payments

AHCCCS pays hospitals for inpatient and outpatient services to AHCCCS members. Additionally, AHCCCS pays supplemental payments to hospitals for different purposes and activities. A summary of all hospital payments (claims as well as supplemental payments) is available.

AHCCCS Hospital Inpatient Reimbursement Methodology

Effective with dates of discharge on and after October 1, 2014, AHCCCS reimburses inpatient hospital services using the APR-DRG payment methodology. Read more about the AHCCCS Transition to DRG-based Payment

Hospital Supplement Payments

Information on the individual supplemental payment programs is provided below:

  • Critical Access Hospital Payments

    Critical Access Hospitals (CAHs) are rural community hospitals that meet defined criteria outlined in the Conditions of Participation, 432CFR-485 and subsequent legislative refinements to the program through the BBA, BIPA, and Medicare Modernization Act. The Arizona State Legislature has directed AHCCCS to allocate additional funds appropriated in the annual state budget.

    More information about Critical Access payments.

  • Rural Hospital Inpatient Fund Payments

    The Rural Hospital Inpatient Fund was established by the Legislature in 2005 in response to a 2002 hospital inpatient study that showed rural hospital inpatient cost structures are higher than urban hospital cost structures for inpatient services. This fund was designed to supplement rural hospital inpatient payments.

    More information about Rural Hospital Inpatient Fund payments.

  • Proposition 202 Trauma & Emergency Services Fund Payments

    In November 2002, Arizona voters approved Proposition 202, the Indian Gaming and Self-Reliance Act. Among other things, the initiative established the Arizona Benefits Fund, consisting of tribal gaming revenues paid to the State on a quarterly basis. The Benefits Fund is administered by the Department of Gaming. To help offset the readiness and costs of Level I Trauma Centers and the increasing volume in Emergency Departments, a portion of these funds are transferred to AHCCCS for distribution.

    More information about Proposition 202 payments.


    • Hospitals with Level I Trauma Centers must have Prop 202 worksheets to AHCCCS by October 31 of each year in order to receive Proposition 202 trauma funds for that State fiscal year.

  • Graduate Medical Education Payments

    Graduate Medical Education (GME) funds are distributed to hospitals that provide training and education for medical school graduates. This training includes internships, residencies and fellowships. GME funds are either designated to cover direct medical education expenses or indirect medical education expenses.

    More information about Graduate Medical Education payments.


    • Hospitals must have 2021 GME final IGAs to AHCCCS by August 15, 2021 in order to receive allocated FY 2021 GME funds.

    • Hospitals must have 2020 GME final IGAs to AHCCCS by August 15, 2020 in order to receive allocated FY 2020 GME funds.

    • Hospitals must have 2019 GME final IGAs to AHCCCS by August 15, 2019 in order to receive allocated FY 2019 GME funds.

    • Hospitals must have 2018 GME final IGAs to AHCCCS by August 15, 2018 in order to receive allocated FY 2018 GME funds.

    • Hospitals must have 2017 GME final IGAs to AHCCCS by August 15, 2017 in order to receive allocated FY 2017 GME funds.

    • Hospitals must have 2016 GME final IGAs to AHCCCS by August 15, 2016 in order to receive allocated FY 2016 GME funds.

  • Disproportionate Share Hospital Payments

    Disproportionate Share Hospital (DSH) payments provide financial assistance to hospitals that serve a large number of low-income patients such as people on Medicaid and the uninsured. Medicaid DSH payments are the largest source of federal funding for uncompensated care.

    More information about Disproportionate Share Hospital payments.

  • Electronic Health Record Incentive Payments

    Under the Health Information Technology for Economic and Clinical Health (HITECH) Act, eligible health care professionals and hospitals can qualify for Medicare and Medicaid incentive payments when they adopt certified EHR technology and use it to achieve specified objectives.

    More information about EHR Incentive payments.