While AZBio and its members recognize that the State of Arizona and the legislature must work diligently to balance the State Budget – which includes implementation of SB1475 and a 5% rate cut to providers of healthcare services – the end result may ultimately increase the state’s healthcare spend rather than reduce it.
May 15, 2015
Director Thomas Betlach
801 E. Jefferson Street, MD 4100
Phoenix, AZ 85034
RE: Request for Public Comment on SB1475
Dear Director Betlach,
On behalf of the Arizona Bioindustry Association (AZBio) and our member companies across the state, thank you for this opportunity to provide comments on the impact of the 5% provider rate cuts called for by SB1475.
While AZBio and its members recognize that the State of Arizona and the legislature must work diligently to balance the State Budget – which includes implementation of SB1475 and a 5% rate cut to providers of healthcare services – the end result may ultimately increase the state’s healthcare spend rather than reduce it. AZBio believes these cuts are shortsighted fiscal policy and are likely to create unintended consequences. Specifically, these cuts will erode access to health care services for our most vulnerable citizens. These barriers to healthcare services stand to increase the state’s total cost of care as delays in the diagnosis and treatment result in increased emergency room visits and hospitalizations.
Reduced Provider Payments Will Result in Restricted Access
As a result of Medicaid Expansion, more patients are seeking coverage and access to medical specialists is particularly important. Nearly 1.5M people are enrolled in Arizona’s Medicaid and CHIP programs as of the latest CMS report (through February 2015). This includes nearly 300,000 new enrollees as compared to pre-ACA expansion in 2013. (Source: http://www.medicaid.gov/medicaid-chip-program-information/program-information/downloads/medicaid-and-chip-february-2015-application-eligibility-and-enrollment-data.pdf)
The proposed reductions in provider payment rates will further constrict the provider network. This claim is evidenced by the many comments posted on azahcccs.gov relating to the current and proposed reduced levels of payment. If an increasing number of healthcare providers elect to not accept AHCCCS patients, there will be fewer options for patients seeking treatment along with longer wait times for appointments at the remaining facilities. The situation will be exacerbated in Arizona’s rural communities where we already have a shortage of primary and specialty healthcare service providers in the area that accept patients in the AHCCCS system.
Fewer Points of Access Lead to Reduced Access To Care
When providers drop out of the AHCCCS system and patients experience access challenges, appointments for essential health services may be postponed or missed. The result of this can be both life threatening and expensive. Patients who have missed sessions required by their treatment plan regularly seek care at the emergency room or have a need for an extended hospital stay. From past experience, we have seen that the cost of hospitalization or other complications from a patient’s inability to follow their treatment plan drive healthcare costs higher.
The Arizona Bioindustry Association is committed to supporting the discovery, development, commercialization, delivery and availability of healthcare innovations that support Arizonans in all of our communities. We thank you for the opportunity to share this comment and will be happy to provide specific examples of how delays in essential health services can lead to increased healthcare costs upon request.
President and CEO, Arizona BioIndustry Association (AZBio)
Chairman, AdvaMed State Medical Technology Alliance (SMTA)