Medicaid Managed LTSS Program

Arizona Flag

Under Medicaid §1115 waiver authority, Arizona Health Care Cost Containment System (AHCCCS) provides health care services through a prepaid, capitated managed care delivery model that operates statewide for Medicaid State Plan groups, as well as demonstration expansion groups. The goal of the demonstration is to provide organized and coordinated health care for both acute and long-term care that includes pre-established provider networks; payment arrangements; administrative and clinical systems; patient and provider services; and health services management. Long-term care service beneficiaries receive additional benefits not provided through the Medicaid State Plan. (Source:
State AHCCCS website
Fact Sheet
Current Approval Document (4/6/2012)

In August 2012, the state released a final ruling to maintain reimbursement reductions for inpatient and outpatient hospital services covered through the AHCCCS program as instituted in October 2011, and to eliminate inflation-based rate adjustments. (Source: BNA Register, August 17, 2012)

In October 2012, the state submitted a §1115 waiver amendment seeking to extend state authority to provide Medicaid coverage to adults without dependent children with incomes between 0% and 100% of the Federal Poverty Level (“Childless Adults”); and to obtain the enhanced federal medical assistance percentage (FMAP) for Childless Adults beginning January 1, 2014. (Source: Application for Amendment, 11/9/2012)

On July 19, 2014, Arizona submitted an application for CMS State Innovation Model Funding to accelerate the state’s delivery system transformation towards a value-based integrated model focusing on whole person health in all settings and regardless of coverage source. The state will undertake transformation of the health care delivery system using three overarching strategies: 1) Facilitating Integration and Decreasing System Fragmentation; 2) Improving Care Coordination; 3) Driving Payment Reform.

The Arizona SIM Initiative will begin by focusing on critical populations including individuals with serious mental illness (SMI) or other significant medical and behavioral health needs (super-utilizers); individuals dually eligible for Medicare and Medicaid; individuals transitioning from the justice system; members moving between Qualified Health Plans and Medicaid health plans; and the American Indian population. (Source: Arizona SIM Initiative websiteCMS State Innovation Model Funding FAQs)

On November 1, 2016, the Arizona Health Care Cost Containment System (AHCCCS) released a request for proposals (RFP) to reprocure contracts for the state’s managed long term services and supports (MLTSS) system, known as the Arizona Long Term Care System (ALTCS). The RFP will cover approximately 26,000 beneficiaries that are elderly or have a physical disability, and does not include individuals with intellectual or development disabilities (I/DD). Currently, three managed care organizations (MCOs)—Mercy Care Plan, UnitedHealthcare, and Bridgeway Health Solutions—operate across Arizona, receiving an average per-member-per-month (PMPM) capitated payment of $3,323. Key provisions of the RFP include:

  • All health plans awarded under the RFP are required to operate a Dual Eligible Special Needs Plans (D-SNP) by January 1, 2018, and the state aims to improve coordination for dual eligible members moving forward; 
  • New contracts will consolidate operations into three geographic services areas or GSAs, which are North, South and Central; and
  • Proposals for the RFP are due by January 23, 2017, with anticipated implementation beginning October 1, 2017.

Bidder proposals will be evaluated on four areas: program, capitation, access to care/network, and administrative. (Source: RFP 11/1/2016; HMA Weekly Roundup 11/2/2016)

On March 3, 2017, the Arizona Health Care Cost Containment System (AHCCCS) announced awards for the three managed care organizations (MCOs) that have been selected to provide all medical and long-term services and supports (LTSS) to Medicaid individuals that are elderly or have a physical disability through the Arizona Long Term Care System (ALTCS). Contracts break down by health plan and Geographic Service Area (GSA) as follows:

Central GSA:

  • Banner-University Family Care;
  • Southwest Catholic Health Network Corporation dba Mercy Care Plan; and
  • UnitedHealthcare Community Plan.

South GSA:

  • Banner-University Family Care;
  • Southwest Catholic Health Network Corporation dba Mercy Care Plan.

North GSA:

  • UnitedHealthcare Community Plan.

The new contracts become effective on October 1, 2017, and will include over 26,000 AHCCCS members. (Source: Award Announcement 3/3/2017) 

State Demonstration to Integrate Care for Dual Eligible Individuals (Withdrawn)

In May 2012, the state submitted a proposal for a statewide participation in the Capitated Financial Alignment Demonstration model; the proposed implementation date was January 1, 2014. (Source: Demonstration Proposal)

In April 2013, the state withdrew its proposal to participate in the Capitated Financial Alignment Demonstration for members that have AHCCCS and Medicare. The state said it would continue working with CMS to improve care for dual eligibles within its current managed care model. (Source: MACPAC

Section 1915(k) Community First Choice Option 

In October 2012, Arizona submitted an application to CMS to implement the Community First Choice Option. In June 2013, Arizona withdrew its 1915(k) application, opting instead to implement its CFC service model under the state’s §1115 waiver. (Source: National HCBS Conference Presentation, 9/11/2013; State Medicaid Integration Tracker 9/30/2013)

Health Homes

In March 2011, Arizona received a planning grant to explore the feasibility of a Regional Behavioral Health Authority (RBHA) model with expanded responsibility for Title XIX-eligible adults with SMI. This RBHA model is known as Recovery Through Whole Health. (Source: Recovery Through Whole Health)