Committee advances bill to allow direct Medicaid payments to urban Indian organizations for traditional healing

The House Appropriations Committee voted March 25 to advance Senate Bill 17‑76, which would amend state law to allow urban Indian organizations (UIOs) to provide traditional healing services reimbursable by Arizona Health Care Cost Containment System (AHCCCS).

Christina Stender of House Majority Research told members the bill defines an urban Indian organization as one that receives federal Indian Health Service funding and aligns state law with a CMS model approved in October 2024 and implemented in several other states. "This bill allows our state to obtain Medicaid reimbursements for traditional healing services offered by urban Indian organizations," sponsor Senator Sally Ann Gonzalez (LD 20) said.

Damien Carpenter, chief legislative liaison for AHCCCS (ACCESS), testified the agency was neutral on the bill, explained implementation details and estimated a fiscal impact of about $1,300,000 to the general fund for direct payments to UIOs because CMS historically has not granted a 100% FMAP for UIO providers. "No state has been able to receive a 100% FMAP beyond IHS 638 facilities," Carpenter said, and he recommended language making implementation contingent on CMS approval.

Members discussed whether the state should initially seek a 100% FMAP, whether the cost should be covered by philanthropy and whether a committee "cow" amendment should specify an FMAP percentage request. The chair asked staff to order a fiscal note before third reading.

After debate, the committee returned the bill with a do‑pass recommendation; the chair announced the committee tally as 9 yeses, 6 noes, 2 present and 1 not voting. The bill will be subject to further amendment before floor consideration.