How Arizona Medicaid Pays for Adult Day Health Care: Three ALTCS Plans, a $101.33 Per Diem, and a Re-Procurement Due This Month

Arizona pays for adult day health care through the Arizona Long Term Care System, and for an adult day center that means three things at once: a managed care plan is your payer, a state fee schedule is your benchmark, and the contracts that put those plans in place are about to be rebid. Proposals for the next round of ALTCS contracts are due September 24, 2026, the current plans have been extended through September 30, 2027, and the per diem the state publishes sits at $101.33 after a January increase. Here is how the pieces fit for a licensed Arizona center.

ElderSuite serves adult day care centers nationwide. This piece is Arizona-specific — adult day health services for ALTCS members who are elderly or have physical disabilities, not the Division of Developmental Disabilities’ day treatment programs.

One benefit, three plans, and a rebid

Adult day health services are an ALTCS home- and community-based benefit “not otherwise covered in the State Plan,” authorized under Arizona’s Section 1115 demonstration, which runs through September 30, 2027. State law defines the service as “planned care supervision and activities, personal care, personal living skills training, meals and health monitoring in a group setting during a portion of a continuous twenty-four-hour period,” and AMPM Policy 1240-B sets the medical-necessity bar low and clear: it “is met if members reside at home, need supervision, assistance in taking medication, recreation and socialization, or personal living skills training.” Members living in an assisted living facility need a case manager’s justification and plan approval; members in behavioral health residential facilities are not eligible.

Three plans hold the ALTCS contracts for elderly and physically disabled members: UnitedHealthcare Community Plan, Banner-University Family Care, and Mercy Care. All three serve the Central service area (Maricopa, Gila, and most of Pinal); UnitedHealthcare alone serves the North; Banner-University serves the South, with Mercy Care in Pima County. Members enrolled through seven tribal governments and the American Indian Health Program are the exception — their adult day health is paid fee-for-service by AHCCCS. In August 2026 the three plans carried about 26,000 ALTCS members between them.

Those contracts were supposed to have been replaced already. AHCCCS awarded new contracts in December 2023 for an October 2024 start; the award was protested, a court halted the transition, and on September 19, 2025 AHCCCS terminated the procurement and extended the existing plans — most recently through September 30, 2027. The replacement, RFP YH27-0001, was published August 4, 2026: proposals due September 24, awards expected January 2027, new contracts starting October 1, 2027, and one statewide service area instead of three. AHCCCS has also said it intends to require the winning plans to move home- and community-based providers into value-based payment arrangements beginning with the January 1, 2028 provider contracts. Whoever your payer is on October 1, 2027, the contract you sign with them will look different.

Who qualifies, and who authorizes

ALTCS eligibility runs through the Pre-Admission Screening: the member must be “at immediate risk of institutionalization in a nursing facility,” with countable resources of no more than $2,000 for a single applicant and gross monthly income at or below $2,982 for 2026, per the ALTCS member guide. Once enrolled, the member is assigned a plan case manager who builds the service plan, and adult day health requires the plan’s service authorization — no physician order and no AHCCCS prior authorization, just the contractor’s. The plan also runs a cost-effectiveness study: home- and community-based services, adult day health included, may not exceed 100 percent of the net cost of institutional care for that member.

Two same-day rules matter for scheduling. Under AMPM 1240-A, adult day health is excluded on days when attendant care is provided, and personal care cannot be provided in conjunction with adult day health on the same day, unless the case manager specifically justifies it and the plan approves.

The fee schedule and how it reaches your contract

AHCCCS publishes a fee-for-service HCBS rate schedule that pays tribal fee-for-service claims directly and serves as the benchmark for everyone else. Effective January 1, 2026 and unchanged on the July 1 schedule, adult day services pay $4.18 per 15 minutes (S5100), $50.68 per half day (S5101), and $101.33 per diem (S5102), with higher rates for the Flagstaff and Tucson minimum-wage zones — $107.70 and $102.52 per diem. The January increase was 1.95 percent statewide, tied to Proposition 206 minimum-wage increases, and AHCCCS’s rate notice says the plans “will be required to implement these rate increases.” The preliminary notice for October 1, 2026 lists HCBS rates as unchanged.

The schedule reaches your plan contract two ways. First, the ALTCS contract says AHCCCS “expects the Contractor to apply the HCBS FFS fee schedule rate adjustments to the MCO Fee Schedule and all contracted HCBS rates”; a plan that does not intend to pass an increase through must tell AHCCCS 60 days ahead and explain how it will protect access. Second, state law requires a plan to pay a provider at the AHCCCS fee schedule “in the absence of a contract or negotiated rate.” A negotiated rate can differ from the schedule, but the schedule is the floor you start from, and it is public.

Licensing: perpetual, inspected annually

The Arizona Department of Health Services licenses adult day health care facilities under Article 11 of Title 9, Chapter 10 of the Administrative Code, which applies once a facility serves five or more unrelated adults. Since 2019 the license does not expire — it stays valid as long as the annual licensing fee is paid and the license is not suspended or revoked — and ADHS conducts a compliance inspection at least once a year. The fee for a facility licensed for one to 59 participants is $280 plus $70 per licensed slot.

The rule’s staffing and clinical floor is short and specific: a registered nurse “manages the nursing services and provides direction for health-related services”; a nurse is on the premises daily to administer medications and treatments and monitor health status; at least two personnel are present whenever two or more participants are in the facility; and at least one person certified in CPR and first aid is on site at all times. There is no numeric staff-to-participant ratio in the rule — the standard is “sufficient personnel.” On the participant side, a signed medical assessment from the participant’s practitioner is required within 60 days before enrollment, an RN completes a comprehensive assessment before the tenth visit or within 30 days, the care plan is developed within seven days of that assessment and reviewed at least every six months, and the record must state whether the participant may sign in and out. Physical plant: at least 40 square feet of indoor activity space per participant, an outdoor activity area, and a toilet and sink for every ten participants.

Billing: register with AHCCCS, contract with the plan

A center cannot be paid by an ALTCS plan until it is an AHCCCS-registered provider. Adult day health is provider type 27 — an “atypical” provider with no NPI requirement, a $750 enrollment fee for 2026, electronic funds transfer required, and ADHS as the regulatory agency of record. Revalidation is every four years. The plan then contracts with you; the contract requires every plan subcontractor to hold that registration, and AHCCCS “reserves the right to withhold all payments” where a provider has not registered.

Arizona’s claims clock is written into statute and into ACOM Policy 203: an initial claim must be submitted within six months of the date of service, a clean claim within twelve, and — specifically for home- and community-based ALTCS providers, adult day health included — the plan must adjudicate a claim for an authorized service within 30 calendar days of receipt, with interest at one percent per month on anything paid later. Plans must adjudicate 95 percent of clean claims within 30 days and 99 percent within 60. For tribal fee-for-service members, claims go on a CMS-1500 and are matched line by line to the case manager’s authorization — provider, member, dates, procedure code, and units — and denied if they do not match.

Electronic claims go out as 837P files, and two of the three ALTCS plans — Mercy Care (payer ID 86052) and Banner-University Family Care (66901) — are available payers for batch claims on the Availity clearinghouse, the same clearinghouse ElderSuite submits claims through; AHCCCS itself is listed there as Arizona Medicaid (AZMCD) for tribal fee-for-service claims. That means an Arizona center can run the whole pipeline in one system: daily attendance becomes service documentation, documentation becomes claims, and claims go out electronically. Availity requires a one-time payer enrollment before the first claim goes out. For the full workflow from attendance record to electronic claim, see ElderSuite’s Medicaid billing guide.

One thing you do not need: electronic visit verification. Arizona’s EVV mandate covers non-skilled in-home services and home health, defined by provider type, service code, and place of service. Provider type 27 and the adult day codes are not on the list.

The records ADHS and the plan will ask for

Article 11 spells out the medical record: the enrollment agreement and the date of the first visit, practitioner orders, the medical assessment, the RN’s comprehensive assessment, the care plan, progress notes, “documentation of adult day health services provided to the participant,” medication administration records with date, time, drug, strength, dose, route, and the signature of the person administering, and “documentation of whether the participant may sign in or out.” A medication error or refusal must be reported to the participant’s representative within 12 hours and documented within 24; an injury gets a written report the day it happens and an investigation within 24 hours. The monthly activity calendar must be posted before the month begins and kept 90 days. Under the AHCCCS provider agreement, records supporting payment are kept six years from the date of payment. Because the plan authorizes a specific service and the tribal fee-for-service system denies any unit that does not match the authorization, your attendance tracking — who came, on what day, signed in and out — is the document the claim rests on.

Where to check

• AMPM Policy 1240-B (adult day health facilities) and 1240-A (same-day exclusions)
• AHCCCS’s HCBS fee-for-service rates and ACOM Policy 203 on claims
• The ALTCS E/PD member FAQ (plans by service area) and the YH27-0001 procurement page
• ADHS’s Article 11 licensing rules and adult day health care initial checklist
• AHCCCS provider enrollment and the EVV program page