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Following court defeat, hospital group drops lawsuit against state

Arizona’s largest hospital group announced today it is dropping a lawsuit that seeks to undo the state’s decision to cut reimbursement rates to Medicaid providers, a move that comes just days after a federal judge upheld the cuts.

Arizona Hospital and Healthcare Association President Laurie Liles said her organization’s board of directors decided earlier this week not to appeal U.S. District Judge David Campbell’s Friday ruling.

Campbell rejected the association’s claim that a 5 percent cut in reimbursement rates to hospitals was improper and illegal.

At a Thursday press conference, Liles and Senate President Steve Pierce struck conciliatory tones.

“We considered our options. And we could’ve chosen to pursue the case or to appeal it. We chose not to because it’s the right thing to do,” Liles said. “We know it will be difficult. We know that legislators and the governor face some very hard choices, as do hospitals. The point is, we’re working together and looking forward, not backward.”

Pierce, R-Prescott, applauded the decision to drop the lawsuit, and said legislative leaders and the hospital association would continue working together to solve some of the issues facing the health care industry.

He said nothing would be done this session but that he, Sen. John McComish, the hospital association and others would continue discussing possible solutions in McComish’s Health Care Reform Committee.

Pierce said the lawsuit is “behind us” and that the hospitals are ready to move on and work together with lawmakers.

“This is an olive branch from them. We all have to work together. They know it. We know it. Whatever happened in the past, it’s time to move on,” he said.

Pierce focused especially on uncompensated care as a health care issue that he’s interested in working on.

“There’s a lot of issues out there. You’re focusing on the 5 percent. That’s only one little piece of it,” Pierce told reporters. “If you look at the uncompensated care hospitals have been enduring from our cuts in (the Arizona Health Care Cost Containment System), it’s time to start saying, ‘Okay, there’s a huge issue out there because there could be more uncompensated care coming.’”

The 5 percent provider rate cut was part of massive package of AHCCCS cuts, otherwise known as the state’s Medicaid system, implemented in 2011.

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