The Arizona Supreme Court announced this week that they’ll hear the Biggs v. Betlach case.  The lawsuit was filed by a group of legislators challenging the method used by the legislature to authorize AHCCCS’ hospital assessment.  It’s a charge to hospitals that’s used annually to draw down the federal match required to pay the state’s share for covering “childless adults” under our state’s Medicaid program (covering them was a pre-requisite to expanding Medicaid eligibility to 138% of poverty).

The Plaintiffs basically argue that the assessment is a tax rather than an assessment charged by the Agency.  Raising a tax requires a super majority while authorizing an agency director to, by rule, assess a fee only takes a simple majority.  The hospital assessment used the latter mechanism.

There’s plenty of agency practice history in assessing fees based on authority that came from a simple majority vote…  and some good case law too.  For example, when I was the ADHS Director, we raised the fees (in 2009) for our licensed facilities in order to pay for all of our licensing programs’ operations.  That authorization came via a simple majority vote budget bill.

We’re probably going to be OK, but you never know.  No date has been set for the Hearing.