Will Humble Medicaid, Professional Development, Wills Blog

AHCCCS 101 Part 2: Waivers, State Plan Amendments and Who Decides

In Part 1, we walked through why Arizona built AHCCCS differently, using managed care from the start instead of fee-for-service.

AHCCCS 101 (Part 1 of 4): AHCCCS’ Origin Story – Why Arizona Built Medicaid Different

That raises the next logical question: how did and does Arizona get permission to design its Medicaid program this way? Remember – Arizona can’t just do what it wants because the federal government pays more than ½ of the cost for Medicaid – so the authorizing statute built some structure around how states can and can’t experiment with how they run their programs.

The federal government allows flexibility from the mainline approach to Medicaid, but only through specific tools. The two most important are Section 1115 waivers and State Plan Amendments, often called SPAs.

A Section 1115 waiver is a permission slip from CMS to try something new. It allows a state to waive certain rules in federal Medicaid law. Normally, states must follow detailed requirements about who is eligible, what services are covered, and how care is delivered and paid for.

A waver gives the state some room to step outside those rules and test a different approach. That’s what Arizona did back in 1982 when it asked for a waiver to use managed care instead of fee for service reimbursement for most populations (Native Americans being the exception)

But waiver flexibilities come with conditions. A waiver must still support Medicaid’s core purpose to provide coverage and care for required populations. Waivers are also supposed to be a real experiment (not just a policy preference) and when the state applies for a waiver they have to measure their results and report back.

Arizona’s recent H2O (Housing and Health Opportunities) waiver is a good example. It allows AHCCCS to cover certain housing-related services for members with high needs. The idea is that stable housing can improve health and reduce costly medical care. But Arizona has to track outcomes and show whether the approach actually works.

AHCCCS Tackling Housing Instability with Their New ‘H2O’ Program

A State Plan Amendment is different. Every state has a Medicaid state plan, which acts as the rulebook for the program. A SPA is simply a change to that rulebook. These changes still have to follow federal law, so they don’t require an experiment or formal evaluation like waivers do so SPAs are usually more routine and quicker to approve.

A simple way to think about it is this: a SPA updates the program within existing rules, while a waiver allows the state to test something outside those rules.

The process is fairly structured for both waivers and SPAs. AHCCCS develops a proposal and sends it to CMS. CMS reviews the request and can approve it, deny it, or ask the state to revise parts of it.

For waivers, there’s also a public comment period at both the state and federal level. In practice, many approvals involve back-and-forth negotiation before CMS signs off.

One concept that often causes confusion is “budget neutrality.” For 1115 waivers, the state has to show that the proposal will not cost the federal government more than what Medicaid would have cost without the waiver.

That doesn’t mean spending can’t change. But it does mean the aggregate cost to the feds won’t be higher. For example, with the H2O waiver they can spend more on housing support if they can show that it reduces other costs (e.g. hospitalizations).

Timing also differs between the two tools. SPAs are often approved in a few months. Waivers usually take a lot longer because of the added complexity, negotiations, and federal review (and the financial assessment).

If CMS doesn’t agree with a proposal, it rarely ends with a flat rejection. More often, CMS partially approves the request or requires changes before moving forward. States then revise and resubmit. Arizona uses both tools regularly.

Arizona Section 1115 Demonstration Waivers

Arizona Medicaid State Plan Amendments

Waivers are used for broader system changes like housing supports or delivery system reforms. SPAs are used for more routine updates, like adjusting payment methods or adding services that already fit within federal rules.

The key takeaway is simple. SPAs are for changes within the rules. Waivers are for testing new ideas outside the rules.

In Part 3, we’ll move from policy to practice and walk through how AHCCCS works day to day… how people enroll, how they get assigned to a health plan etc.

Will Humble Public Health, Public Health Law, Wills Blog

Kennedy’s 2027 Budget Guts Public Health

Secretary Kennedy and the president released their proposed federal budget for FFY 2027 (starting October 1, 2026) last week. As expected, it calls for deep cuts across core public health programs including some that Kennedy has publicly supported, like physical activity and nutrition.

Bottom line: depending on how you define “core public health,” the proposal cuts funding in the range of roughly 20–30% across major prevention and public health program lines. Some individual programs are reduced far more—or eliminated entirely.

A reminder: this is just a proposal. Congress decides what actually gets funded. But the current Congress has shown a pattern of rubber stamping the administration and budget bills only require a simple majority in the Senate.

At the same time, Congress often falls back on continuing resolutions instead of passing full budgets. So the real question is whether this year breaks that pattern and whether these cuts move from paper to practice.

NACCHO Analysis: FY27 Kennedy’s Budget Request

Legislative ASTHO Analysis: FY 27 Kennedy Budget Request

The proposal significantly reduces overall discretionary funding for public health and restructures how funds are delivered. In several cases, it combines or drops categorical programs and replaces them with broader block-style approaches.

State and Local Public Health

Kennedy wants to dramatically cut funds that flow to state and local health departments.

  • Big cuts to core infrastructure funding that supports epidemiology, lab capacity, and workforce
  • Reductions or elimination of programs that fund day-to-day public health operations
  • Less support for data modernization and surveillance systems

Chronic Disease and Prevention

Programs aimed at preventing long-term conditions see widespread reductions:

  • Heart disease, diabetes, and cancer prevention programs scaled back
  • Tobacco control funding reduced
  • Injury and violence prevention programs cut

Maternal and Child Health: Constrained Investments

The proposal trims or restructures funding for maternal and child health programs:

  • Reductions in programs that support maternal health outcomes
  • Cuts to early childhood and family health initiatives
  • Less investment in addressing disparities in birth outcomes

Infectious Disease and Preparedness: Mixed Signals

Some high-profile preparedness functions are kept, but the broader system is weakened:

  • Select funding for pandemic preparedness stays
  • But cuts to the public health workforce and infrastructure undermine readiness
  • Reductions in immunization program support at the state/local level

Nutrition and Physical Activity

Despite Kennedy’s bloviations about prevention and lifestyle:

  • Nutrition programs face cuts or restructuring
  • Physical activity initiatives are reduced
  • Community-based prevention efforts are scaled back

What Happens Next?

Congress now takes over. There are a few realistic paths:

  1. Full adoption (unlikely but possible): Congress passes a budget close to the proposal
  2. Partial restoration: Lawmakers push back on the most visible cuts
  3. Continuing resolution: Funding stays flat, delaying major changes

Historically, CRs are common, but the political environment this year makes outcomes less predictable. For now this is all in suspended animation.

Will Humble Climate Change, Wills Blog

SRP Election Results: A Shift Toward Clean Energy

There’s a clear takeaway from this year’s Salt River Project election: efforts by Turning Point to push the utility toward expanded fossil fuel reliance didn’t work. Despite a well-organized (and expensive) push from Turning Point USA to get anti renewable people on the Board, SRP voters told them to pound sand.

The SRP board now has an 8–6 majority of members who support expanding clean energy resources. That matters. SRP is one of the largest public power utilities in the country, and board composition directly shapes long-term decisions about generation (and who pays for it), infrastructure investments, and ratepayer costs.

The clean energy slate performed strongly in what are called the ‘at-large’ races. Candidates like Krista O’Brien and Kathy Mohr Almeida smoked the Turning Point candidates… doubling their vote totals.

The only races the clean energy slate lost were the president and vice president positions because those races are based on the antiquated and unfair acreage-based voting system. Under that system if you have 400 acres of land in the SRP area you get 400 votes. If you live on a ¼ acre property you only get 0.25 votes.

Even with fossil enthusiasts in the officer positions the result is dramatic. An 8–6 majority is enough to move policy discussions in a new direction. It doesn’t guarantee good outcomes, but it does mean proposals for more large-scale fossil fuel investments will face more scrutiny than they have in the past.

That’s especially important given pressures to make residential rate payers pay for the infrastructure to feed data centers. One of the biggest concerns heading into this election was whether residential ratepayers would be asked to subsidize expensive new fossil fuel infrastructure to support those loads. With the new board composition, that kind of “rubber stamp” approach is less likely.

Going forward, attention will shift to how the board engages with SRP leadership, including CEO Jim Pratt. Expect more pressure to evaluate lower-cost renewable options like solar, storage, and energy efficiency and less on ‘reliability’ (e.g., methane plants) rather than cleaner energy development.

This is something to celebrate, which is why I led with this piece this week! Some of the rest of my update are a drag…  like this next one.

Will Humble Professional Development, Wills Blog

Public Health Journalism this Week

Navigator cuts leave Americans with less help to find Obamacare plans | Arizona Mirror

State Gun Laws and Firearm Suicide Rates | Public Health | JAMA Network Open | JAMA Network

RFK Jr. touts IHS funding at tribal conference while spreading false claims about diabetes

Nearly Half of Arizona’s SNAP Participants Have Lost Benefits — ProPublica

Maricopa County confirms first heat death of 2026

ASU’s new medical school ready to launch. What happens next

Will Humble Medicaid, Nutrition, State Legislature, Wills Blog

Arizona’s SNAP Eligibility Collapses, Signaling Big Administrative Problems at ADES

Arizona has had a stunning drop in participation in the Supplemental Nutrition Assistance Program (SNAP) since the start of the year… about a 41% decline. For context, the next closest state (Florida) had a much smaller drop of roughly 12%, while the national average decline is about 8%. The fact that eligibility in Arizona fell off a cliff while there was a much more modest decline in all the other states means something is administratively wrong at ADES. Something big and important.

Arizona’s huge drop can’t solely be blamed on the new HR1 work requirements. If that were it then we’d see the same thing across the country.  There’s also no way the drop in eligibility is because of a sudden surge in prosperity. Tens of thousands of Arizonans suddenly didn’t earn their way out of needing food assistance in a matter of months. That leaves administrative and operational malfunction at ADES as the more plausible explanation. But what?

It might be mostly because of the lack of staff. ADES made huge staffing cuts last summer firing more than 500 people including dozens of eligibility specialists. You can’t fire a big chunk of your eligibility staff and expect the system to function right especially when you consider the big workload increase caused by the new work requirement reporting HR1 caused.

Arizona Department of Economic Security is laying off 5% of its workforce because of federal cuts

Also, Arizona relies heavily on the Health-e-Arizona Plus eligibility portal, which has a long-standing reputation for locking people out often because it can’t verify identity through automated systems. When that happens, eligible people can’t complete renewals or submit required documentation. They fall off the rolls… not because they’re ineligible, but because they can’t turn in their proof of meeting eligibility requirements.

What happened to SNAP in AZ this year is a warning sign for what could be coming next year in Medicaid if we’re not careful. In January 2027, new Medicaid work requirements are scheduled to take effect, affecting roughly 350,000 people enrolled in AHCCCS. Those requirements will depend on the same kinds of eligibility systems and administrative processes currently failing SNAP participants. It’s also reliant on Health-e-Arizona Plus as the reporting mechanism.

If Arizona can’t reliably process SNAP eligibility today, there’s a risk these problems will spill over into Medicaid, at an even larger scale, especially if part of the reason is the clunky Health-e-Arizona computer system.

State leaders need to take a hard look at what happened at ADES to cause this enormous drop in SNAP eligibility. If part of it is the Health-e-Arizona Plus system, they need to fix it NOW, so we don’t have a repeat in Medicaid early next year. If it’s mostly because they canned so many eligibility specialists, AHCCCS needs to learn the lesson and get more eligibility staff on board (and trained) before January. A key to that will be for the governor to refuse to sign a budget that doesn’t include the eligibility staffing needed to effectively manage these critical safety net problems (at both agencies).

Here’s the bottom line take-away. Somehow, someway ADES has messed up their SNAP eligibility system and because of that people are going huingry. Time to admit to the shortcoming and fix it. Now.

SNAP and Food Security Update in Arizona – Children’s Action Alliance
Arizona’s drop in SNAP participation signals potential nationwide impact of Trump legislation
Will Humble Public Health, Wills Blog

A Common Thread: How War, Helium, and Diagnostic Healthcare Are Linked

Most people think helium is mainly for party balloons. It makes sense that folks think that because that’s the use of helium that we actually see. But the vast majority of helium is used in medical diagnostic imaging instruments and computer chip manufacturing.

Helium is an inert gas element and can’t be manufactured. It’s not in the air we breathe because it’s so light it escapes the atmosphere – so it basically needs to be mined – but not in the conventional sense.

Terrestrial helium forms deep underground over millions of years from the radioactive decay of uranium and thorium. Those reactions release helium atoms, which slowly move through rock and sometimes get trapped alongside methane gas.

But most methane fields have no helium because there isn’t any uranium around too. Only places with moth methane and radiologicals around have Helium in the gas mix.

Once extracted from the methane, helium must be captured and transported in unusual ways. When it’s being used for medical instrument purposes it needs to be cooled to only 4 degrees above absolute zero (-269°C) and shipped as a liquid cylinders.

Even then, it doesn’t transport well because it constantly loses mass – even when it’s not being used. As the cylinders warm, the helium “boils off” as a gas. As it escapes, it rises and escapes the atmosphere.

That’s why steady supply matters. Helium can’t be stored without losing mass even when it’s not being used.

Until the war we started with Iran, supply chains for medical helium were stable and prices were about $6.50 per kg. Over the last few weeks the spot price of helium has gone to more than $20 per Kg (because a big chunk of helium comes from Qatar which had their field damaged by missiles and also ships can’t move what helium is there through the Gulf of Hormuz. Qatar supplies about 1/3 of the global supply of helium – and it’s offline right now.

This matters to public health because helium is essential for MRI imaging instruments. Their superconducting magnets only work when kept super cold, and only liquid helium can do that.

Without it, MRI machines can’t run and maintenance gets harder. If a machine loses its cooling, getting it back online can take time, money, and access to new liquid helium.

As helium becomes increasingly scarce and expensive, large hospital systems will likely see slower maintenance, delayed refills, and fewer scans completed each day resulting in bottlenecks and diagnostic delays.

But large systems are insulated a bit in the short run. They often buy helium through long-term contracts at set prices and get priority delivery. But those protections have limits, especially if disruptions continue.

Smaller hospitals and rural facilities will have a bigger problem. They are more likely to rely on shorter contracts or the spot market, where prices have risen the fastest. That puts them at a disadvantage just as supply tightens.

Helium shows how war affects things in ways most people don’t see. A conflict affecting natural gas production can ripple outward and affect access to MRI scans.

Patients at rural hospitals may end up blaming staff for the fact they need to drive a couple hours when they need an MRI… few if any will connect the dots and understand that the war we started is the real reason.

That’s the common thread.

Will Humble Medicaid, Wills Blog

AHCCCS 101 (Part 1 of 4): AHCCCS’ Origin Story – Why Arizona Built Medicaid Different

Most states joined Medicaid in the late 1960s after Congress created it in 1965 (during the Johnson Administration). Arizona didn’t. In fact, Arizona was the last state to implement Medicaid… waiting until 1982 to launch what we now call AHCCCS (the Arizona Health Care Cost Containment System).

That delay made a big difference in how AHCCCS’ business model was built because between 1966 and 1980 the Medicaid world had already started to change from a fee for service model to managed care.

Back in the 60s and 70s most states ran Medicaid used a fee-for-service model. That means the state Medicaid agencies paid doctors, hospitals, and other providers directly for services they delivered. The more services provided, the more payments.

By the late 1970s and early 1980s, states saw that costs were rising fast, and it was hard to control spending in a system that paid for volume instead of outcomes.

When AHCCCS launched in 1982 (under Governor Bruce Babbitt) it didn’t use the old fee-for-service model. Instead, it built the program around managed care from day one.

The early leadership helped set that direction. The first AHCCCS director was Dr. William McLaughlin, followed by Dr. Leonard Kirschner who many of you know is still engaged in public health and healthcare and is an active AZPHA member.

Here’s how the AHCCCS model works in plain terms:

  • AHCCCS doesn’t usually pay providers directly for services (except for Native Americans who opt in to the American Indian Health Program)
  • Instead, they contract with health plans (called Managed Care Organizations, or MCOs)
  • AHCCCS pays those plans a fixed amount per member per month depending on the patient population needs (often called a “capitated rate”)
  • The health plans then take responsibility for arranging and paying for care their members need
  • AHCCCS’ main job becomes contract management rather than claims payment… basically making sure their contracted MCOs actually provide the required services to their assigned members

AHCCCS hires actuaries who use data and math to set rates that are supposed to cover the expected cost of care for each group of members. Those rates are different depending on who the member is. 

For example (these are simple estimates just to illustrate the concept—not actual AHCCCS rates):

  • A relatively healthy kid might have a rate of about $150–$300 per member per month
  • A person with a serious mental illness (SMI) might be in the range of $1,500–$3,000 per month
  • A person with an intellectual or developmental disability receiving long-term services and supports could be $3,000–$6,000+ per month

The reason for the difference is simple. Some populations need far more services than others. The payment system adjusts so health plans are paid more to care for members with higher needs.

This is a key feature of managed care. The state doesn’t pay one flat rate for everyone, it’s providing risk-adjusted payment rates based on expected cost per person per month.

Instead of the state paying every bill as it comes in, the health plans are responsible for managing care within the fixed payment they get for each type of member.

Because of that structure, one of AHCCCS’ important job is oversight and contract management. The agency has to make sure its contracted health plans actually deliver what they’re supposed to and what AHCCCS is paying them to do like:

  • Cover required services
  • Maintain enough providers in their networks
  • Pay claims appropriately
  • Meet quality standards

In other words, AHCCCS isn’t just a payer, it’s a manager of contractors. Remember, the plans get a set payment for each member every month.

If they don’t provide care they’re supposed to cover or make services hard to access by having a weak provider network, they can keep more of that monthly payment.

That can increase profits, build reserves, or support higher administrative costs or salaries. But when that happens, the people who pay the price are the members, and the public that funded the program. That’s why it’s so important for AHCCCS to hold their contractors accountable.

Other states eventually tried to move from fee-for-service into managed care, but that transition was hard. Providers often resisted the change, because fee-for-service allowed more billing flexibility and higher revenue. Shifting to managed care meant new rules, tighter controls, and more oversight.

Some states never fully made the switch. As a result, they often spend more per Medicaid member than states like Arizona that rely heavily on managed care.

Arizona avoided that fight entirely by building AHCCCS around managed care from the beginning. There was no transition, just a clean start under a managed care model.

In Part 2 through 4 of AHCCCS 101, we’ll walk through the tools that let states like Arizona design programs like this in the first place. Things like Section 1115 waivers, State Plan Amendments, and how federal approval through CMS actually works.

In later parts we’ll explore AHCCCS’ Complete Care program contractors are, what ACOMs (AHCCCS Medical Policy Manuals) are, and how AHCCCS tries to hold their health plans accountable via audits, network standards, quality measures like HEDIS (Healthcare Effectiveness Data and Information Set), and grievance and appeal processes.

Will Humble Behavioral Health, Healthcare, Professional Development, Wills Blog

Register Today: From Crisis to Care: Improving Outcomes in Arizona’s Behavioral Health System

We’ve just about finalized our agenda for the Arizona Public Health Association’s 98th Annual Conference, and this year’s program focuses on one of the most important public health challenges facing Arizona: strengthening our behavioral health system.

View Our Agenda

Join us Friday, May 1 at the Desert Willow Conference Center in Phoenix for From Crisis to Care: Improving Outcomes in Arizona’s Behavioral Health System.

The day will explore practical strategies to improve outcomes across Arizona—from crisis response systems and Medicaid policy to maternal mental health, housing supports, integrated care, and new analytic tools.

We’re honored to open the conference with Georges Benjamin, MD,Executive Director, American Public Health Association, one of the nation’s most influential physician leaders and a steadfast advocate for evidence-based public health policy.

Register Here

Will Humble Public Health, Wills Blog

Public Health:The Main Reason We’re Living Longer & Healthier Lives

When people think about why we’re living longer than we did 100 years ago, most think it’s because of medical and surgical breakthroughs like new drugs, better surgeries, advanced cancer treatment and high-tech hospitals.

Those are good things to be sure and have helped. But the heavy lifting has been done by implementing evidence based public health policies.

Things like clean drinking water, worker safety regulations, safer roads, seat belts and airbags, vaccines, and tobacco control have saved far more lives than medical care… by preventing accidents, injuries, infections, and cancers.  These are the quiet wins of public health… policies and systems that prevent people from getting sick or hurt in the first place.

That’s exactly what we celebrate each year during National Public Health Week. You can learn more about it and this week’s activities here.

National Public Health Week is led by the American Public Health Association, our parent organization. As an APHA affiliate, we’re part of a national effort that’s been improving health for more than 150 years.

APHA’s mission is straightforward: improve the health of all people and all communities. They support the public health workforce, speak up for science-based policies, and help shape federal decisions that change health across the country. They also publish leading resources like the American Journal of Public Health and bring thousands of professionals together each year to share research and ideas.

So what kinds of public health actions have made the biggest difference?

Start with clean water and sanitation. Once cities began treating drinking water and managing waste, deaths from infectious diseases dropped fast.

Vaccines are another major driver. They’ve nearly ended diseases that once killed or disabled thousands of children every year (until the recent anti vax movement).

Arizona-Utah measles outbreak surpasses 500 cases

Then there are safety policies like seatbelt laws, workplace protections, and safer cars. These changes reduced deaths from injuries and accidents.

Tobacco control is another big one. Policies like smoke-free laws, warning labels, and taxes have helped drive down smoking rates and with them, lung cancer and heart disease (still the top two leading causes of death).

Food safety, maternal and infant care, and disease tracking systems also play a role. Together, these efforts add up to longer, healthier lives for millions of people.

Here in Arizona, that work continues every day. Public health professionals across the state and especially at the county health departments are improving behavioral health systems, expanding access to care, and building healthier communities.

National Public Health Week is a good time to recognize and celebrate that progress and the professionals like you that are behind it.

Because the truth is simple: the best healthcare system in the world can’t compete with stopping problems before they start.

That’s what we in public health have been doing for the last century!