Provider Rate Update for October 1, 2012

1. Provider Rate Update forOctober 1, 2012 Our first care is your health care Arizona Health Care Cost Containment System

2. Authority • Arizona Laws 2012, Chapter 299, Section 20 (Senate Bill 1528) authorizes AHCCCS to continue the 5% reductions in payments to institutional and non-institutional providers which became effective October 1, 2011. • Provider reimbursement for October 1, 2012 through September 30, 2013 is necessary to implement the AHCCCS Program within the Agency's actual and anticipated appropriations for the federal fiscal year beginning October 1, 2012. Our first care is your health care Arizona Health Care Cost Containment System

3. No Changes to Many Rates • Reimbursement that was effective from October 1, 2011 through September 30, 2012 will remain in effect for Contract Year (CY) 2013. • Dental • Dialysis • Home and Community Based Services • Nursing Facilities • Behavioral Health • Hospital Inpatient Tiered Per Diem Rates Our first care is your health care Arizona Health Care Cost Containment System

4. IHS and Tribal Facilities • Payments for services provided by Indian Health Service or Tribal 638 facilities claimed at 100% FMAP will continue to be reimbursed using the same methodologies that were in place on October 1, 2011.

5. Physician Fee Schedule • Reimbursement, in aggregate, will remain the same as reimbursement during CY2012. Individual rates may change due to changes in code category or relative value. • Payment ratios for codes with no rates, including "by report" (BR) percentages, effective during the October 1, 2011 through September 30, 2012 time period will remain 58.66%for CY 2013. • Physician drug schedule paid at 95% of AWP.

6. Ambulance • Senate Bill 1528 authorizes AHCCCS to reimburse ambulance providers during Contract Year 2013 at 68.59% of the amounts established by the Arizona Department of Health Services (ADHS) on August 2, 2012. • The ratio is the same as last year but many rates will change.

7. Other Provider Rate Changes • Ambulatory Surgical Centers rates based on CMS ASC fee schedule times Arizona factor (85.7375%). The device components of these rates priced at 100% and the drug component at 95%. • Hospice rates paid per CMS guidelines.

8. Hospital Inpatient • Hospital Inpatient Tiered Per Diem Rates will receive no inflationary adjustment; the rates from October 1, 2011 will be continued. • Inpatient Cost to Charge Ratios (CCRs) for outlier calculation will be 90.25% of the most recently published urban or rural Medicare CCR displayed by CMS by August 31, 2012. • CCRs will be reduced by the percentage increase reported on a charge master filed on or after June 1, 2012.

9. Hospital Outpatient • Hospital Outpatient Reimbursement will remain at the level that was in effect on October 1, 2011. Although some individual rates may change due to rate code changes in category or relative value, the proposed reimbursement, in aggregate, will remain the same. • Outpatient CCRs will be 95% of the most recently published urban or rural Medicare Outpatient CCR displayed by CMS on or before August 1, 2012.

10. For more information regarding the AHCCCS rates, please visit the AHCCCS website: http://www.azahcccs.gov/commercial/ProviderBilling/rates/rates.aspx