After successfully passing out of the Senate Health and Human Services Committee on Feb. 11 with unanimous, bipartisan support, Senate Bill 1451 was not chosen for a subsequent hearing with the Senate Appropriations, Transportation and Technology Committee, so it will not be moving forward this session.
Arizona’s behavioral health providers that serve Medicaid members are facing a number of problems. Reimbursement rates have not kept pace with inflation, straining staff retention and leading to severe workforce shortages, while operational and labor costs — and demand for mental health services — continue to increase.
A 2023 study conducted by Public Consulting Group (PCG) reviewed behavioral health Medicaid reimbursement rates from 2017 to 2022, finding the behavioral health system to be approximately 11% underfunded.
Recent inflationary pressures, workforce shortages and post-pandemic demand increases have only caused more concern, which may have been alleviated by SB 1451 before its discontinuance.
SB 1451 purported to appropriate $60 million from the state’s Fiscal Year 2026-27 General Fund budget to the Arizona Health Care Cost Containment System (AHCCCS), Arizona’s Medicaid agency, to fund a 10% reimbursement rate increase for Medicaid behavioral health service providers. This would have applied to both inpatient and outpatient services.
The bill was drafted to support the continuity of crisis services, mental health treatment, substance abuse and domestic violence services, especially helping prevent behavioral health service reductions in rural and underserved areas.
Jessica Bozek, vice president of older adult and Jewish programs at Jewish Family and Children’s Service (JFCS), described SB 1451 not moving forward as “pretty devastating.”
JFCS is one of the largest providers of behavioral health services in Maricopa County. Its three clinics, spread across the Greater Phoenix area, are integrated with behavioral health services and primary care, featuring labs, psychiatry, counseling and case management for all patients ranging from newborns to the elderly.
“It’s sad because, unfortunately, instead of being proactive, there’s a lot of reactivity, and it is just creating larger gaps in care for people that really need it,” Bozek said. “Our clients are truly in need, so to not be able to have coverage for the services we provide, it just creates bigger and bigger deficits, and that’s why, eventually, we’re unable to do things, so we have to shut down clinics.”
In July 2025, Medicaid cuts forced JFCS to shutter its Glendale clinic and lay off 40 staff members, significantly reducing programs serving individuals with severe mental health conditions.
“(AHCCCS) is instrumental,” Bozek said. “Thousands of people have lost the ability to get services, and these are the people that are at the lowest income level and have the most critical needs, so we really need rate increases.”
JFCS and other community partners emailed thousands of constituents to petition representatives to consider SB 1451 this year. Committee chairs determine which bills are heard, and Senate Appropriations, Transportation and Technology Committee Chairman Sen. David Farnsworth did not choose SB 1451 for a hearing.
Bozek could only speculate why the bill was not chosen after passing the Health and Human Services Committee unanimously, but state budget constraints seemed to be the likeliest culprit.
In addition to Medicare and Medicaid cuts, another issue has been the insurance companies refusing to raise their rates.
“We have been fighting on a federal level for a long time to get rate increases from insurance companies so that we can provide all of these behavioral health services,” Bozek said. “A lot of them have not raised their rates in decades, so unfortunately, when the cost of services continues to go up and rates are not increased, there becomes a larger and larger deficit, which then precludes us from being able to provide these needed services.”
Bozek promised JFCS will continue to advocate for rate increases.
“This has been a continuous issue that we don’t really have a solution for,” she said. “We keep going to each insurance company and asking for rate increases, we keep going to the legislative level, but we don’t really have a solution other than continuing to try to get more funding.”
JFCS relies on small community grants to fund most of its Jewish services, a privilege that is not always reliable and does not translate to its other, more popular services.
“We really need more funding and more help and support so that we can continue to provide services to any Jewish person regardless of whether they have insurance or not,” Bozek said. “Unless we continue to get community support, we might not always be able to do that.”
Finding the funds to continue to provide behavioral health services remains a top priority for the organization. Whether that flexibility comes from insurance companies raising their rates, legislative support or more public grants or donations, remains to be seen. JN
For more information, visit jfcsaz.org.