Senator Finchem Sounds Alarm Over AHCCCS Attempt to Sidestep Provider Appeals Process
ARIZONA, September 3 - FOR IMMEDIATE RELEASE
Thursday, September 3, 2026
PHOENIX, ARIZONA—When a healthcare provider disputes a payment decision involving Arizona's Medicaid system, it is supposed to have a fair opportunity to make its case. The Hobbs administration is now asking an administrative law judge to freeze 30 pending appeals involving one provider while the Arizona Health Care Cost Containment System (AHCCCS) pursues a separate lawsuit addressing the same disputes.
Senator Mark Finchem, Co-Chair of the Joint Legislative Audit Committee, believes the move raises a much larger question for every Arizonan: If a state agency can stop pending appeals and shift the dispute to another venue, what prevents other agencies from using the same strategy when their decisions are challenged?
AHCCCS filed the motion September 2 with the Arizona Office of Administrative Hearings. The agency acknowledges that hundreds of similar cases have already gone through administrative hearings and were resolved in favor of AHCCCS and its contracted health plans. Senator Finchem wants to know why the agency is now seeking to freeze the next 30.
"This is bigger than one laboratory and one billing dispute. It is about whether Arizonans can trust the process when they challenge the government," said Senator Finchem. "The Legislature has already paid for an independent hearing system so people and businesses can challenge government actions without being forced into a more expensive court fight. AHCCCS says it has already prevailed in hundreds of these cases through that process. If it worked hundreds of times, the agency must explain why it now wants 30 pending appeals frozen while it pursues a different legal strategy in court. We are not deciding whether this laboratory is owed money. We are asking why an executive agency wants to halt established proceedings and shift the legal question to a lawsuit it initiated. Without a full and public explanation, this smells like another attempt by the Hobbs administration to cover up agency actions. If this becomes a playbook for state agencies, the consequences will reach far beyond this case. I intend to use the Joint Legislative Audit Committee's oversight authority to get the facts, demand answers, and determine whether legislative or audit action is necessary. Due process cannot exist only when it is convenient for the government."
The appeals involve Prorenata Labs and six AHCCCS-contracted health plans. At issue is whether certain COVID-19 tests are subject to a maximum reimbursement rate, typically $100 per test, and whether an out-of-network laboratory may be paid for non-emergency services provided without prior authorization or a documented urgent medical need.
AHCCCS argues that pausing the hearings while its Superior Court case proceeds would reduce costs, prevent duplicative litigation, and avoid inconsistent rulings. An administrative law judge has not yet ruled on the agency's request.
The Office of Administrative Hearings was created to provide independent proceedings for Arizonans challenging state agency actions. Senator Finchem is seeking answers regarding how long the appeals could be delayed, what the Superior Court litigation will cost taxpayers, why AHCCCS changed its approach after prevailing in hundreds of administrative cases, and whether the agency views this strategy as a precedent for other disputes.
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For more information, contact:
Kim Quintero
Director of Communications | Arizona State Senate Republican Caucus
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