Arizona hospitals are suing to block the latest rate reduction for the state's Medicaid program's payments.
Ariz. hospitals sue state over Medicaid cuts
The lawsuit filed Tuesday in federal court by the Arizona Hospital and Healthcare Association targets a 5% rate reduction that took effect Oct. 1.
The reduction is part of cost-cutting efforts to help balance the state budget.
The hospital group says provider rates cut are dropping Medicaid reimbursements below hospitals' actual costs for providing care, forcing some to eliminate services.
The Oct. 1 rate cut follows a 5%t reduction implemented last April and a three-year rate freeze that combine to leave reimbursements 33% below actual costs.
Gov. Jan Brewer's office says a state-commissioned study concluded that the rates cover enough costs so that hospitals won't drop out of Arizona's Medicaid network.
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