Arizona Medicaid SPA AZ-25-0029 Updates Nursing Facility Rates

Medicaid State Plan Amendments

Published January 1st, 2026

Detected March 13th, 2026

Summary

The Centers for Medicare & Medicaid Services (CMS) approved Arizona State Plan Amendment AZ-25-0029, updating fee-for-service payment rates for nursing facility services. These updated rates are effective January 1, 2026.

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What changed

The Centers for Medicare & Medicaid Services (CMS) has approved Arizona State Plan Amendment (SPA) AZ-25-0029, which revises the fee-for-service payment rates for nursing facility services. The amendment, submitted on December 18, 2025, and approved with an effective date of January 1, 2026, updates the per diem rates for various care levels and geographic areas within Arizona. This action ensures compliance with federal statutory requirements for Medicaid reimbursement.

Nursing facility providers in Arizona must adhere to the new fee-for-service rates effective January 1, 2026. The document outlines specific urban and rural rates, as well as rates for Flagstaff and Tucson, and includes provisions for provider appeals regarding rate reconsiderations. While no specific compliance deadline is mentioned beyond the effective date of the rates, providers should ensure their billing and reimbursement processes align with the updated fee structure to avoid payment discrepancies.

What to do next

Review updated nursing facility per diem rates effective January 1, 2026.
Ensure billing and reimbursement systems are aligned with the new fee-for-service rates.
Familiarize with provider appeal processes for rate reconsiderations.

Source document (simplified)

Table of Contents State/Territory Name: Arizona State Plan Amendment (SPA) #: AZ-25-0029 This file contains the following documents in the order listed: 1) Approval Letter2) CMS 179 Form/Summary Form (with 179-like data) 3) Approved SPA Pages

DEPARTMENT OF HEALTH & HUMAN SERVICES Centers for Medicare & Medicaid Services 7500 Security Boulevard, Mail Stop S3-14-28 Baltimore, Maryland 21244-1850 Financial Management Group Roberta Harrison, Interim Director Arizona Health Care Cost Containment System 150 N. 18th Ave. Phoenix, AZ 85007 RE: Arizona State Plan Amendment Transmittal Number 25-0029 Dear Interim State Medicaid Director Harrison: The Centers for Medicare & Medicaid Services (CMS) has reviewed the proposed Arizona state plan amendment (SPA) to Attachment 4.19-D AZ-25-0029, which was submitted to CMS on December 18, 2025. This plan amendment updates the fee-for-service payment rates for nursing facility services effective January 1, 2026. We reviewed your SPA submission for compliance with statutory requirements, including in sections 1902(a)(2), 1902(a)(13), 1902(a)(30), 1903 as it relates to the identification of an adequate source for the non-federal share of expenditures under the plan, as required by 1902(a)(2), and 1923 of the Social Security Act and the applicable implementing Federal regulations. Based upon the information provided by the state, we have approved the amendment with an effective date of January 1, 2026. We are enclosing the approved CMS-179 and a copy of the new state plan pages. If you have any additional questions or need further assistance, please contact Novena James- Hailey at 617-565-1291 or via email at novena.jameshailey@cms.hhs.gov. Sincerely, Rory Howe Director Enclosures March 10, 2026

Attachment 4.19-D STATE PLAN UNDER TITLE XIX OF THE SOCIAL SECURITY ACT STATE: ARIZONA METHODS AND STANDARDS FOR ESTABLISHING FEE-FOR-SERVICE PAYMENT RATES FOR LONG TERM CARE FACILITIES 85% for each facility, then add in the per day historic costs for property taxes and insurance to determine the statewide average capital component. 4.Total RateThe per diem nursing facility rates are calculated by summing the primary care, indirect care, and capital cost components. Theserates vary by member level of care and geographic area due to the primary care components.5.Rate UpdateEffective October 1, 2002 and each year thereafter, fee-for-service rates for nursing facilities will be updated by applying an inflationfactor or factors to the rate components in effect for the prior year. This method of adjusting fee-for-service rates is consistent withthe method used by AHCCCS for other medical services. For rates effective from October 1, 2011 to September 30, 2013, and fromOctober 1, 2015 and thereafter, no inflation factor will be applied.Below are the AHCCCS FFS Nursing Facility Per Diem Rates effective on and after January 1, 2026: Rates Effective 01/01/2026 Revenue Code Description Urban Rate Rural Rate Flagstaff Tucson LOA/Therapeutic $ 212.27 $ 205.65 $ 211.68 $ 213.35 LOA/Nursing Home $ 212.27 $ 205.65 $ 211.68 $ 213.35 Subacute Care Level I $ 212.27 $ 205.65 $211.68 $ 213.35 Subacute Care Level II $ 232.06 $ 224.11 $ 230.66 $ 233.24 Subacute Care Level III $ 275.26 $ 266.45 $ 274.26 $ 276.66 AHCCCS has designated nursing facilities in the Arizona counties of Pima, Pinal, and Maricopa as Urban to be paid at the AHCCCS Urban Rate. All other countiesinside or outside of Arizona are designated as Rural and are paid at the AHCCCS Rural Rate (except Flagstaff and Tucson, which are paid at the rates specified above). *This LOA rate only applies to reserved beds at Nursing Facilities III.Other ProvisionsA.Provider AppealsNursing facility providers have the right to request an informal rate reconsideration in accordance with the ALTCS Rules. Appeals areallowed for the following reasons:●Extraordinary circumstances (as determined by the Director). ●Provision of specialty care services directed at members with high medical needs. ●Unique or unusually high case mix. Appeals are made in writing to the Director. Appeals which are granted become effective no earlier than the date the appeal was requested. B.Cost and Wage ReportingAHCCCS uses cost and wage reports filed by the nursing facilities in the State of Arizona as a basis for these rate calculations. TN No. 25-0029 Supersedes TN No. 24-0026 Approved: Effective: January 1, 2026 March 10, 2026