To amend the current Durable Medical Equipment fee schedule from a percentage of 2010 to 2012 Medicare Fee Schedule.

Implement an expanded definition of terminal illness such that an individual who is certified by a physician as terminally ill with a life expectancy of twelve months or less is eligible to elect the hospice benefit effective.

Changes the service limits for comprehensive tobacco cessation services provided to pregnant women including both counseling and pharmacotherapy, without cost sharing.

Alternative Benefit Package.

Clarifies the authority and responsibilities of the Single State Agency and its relationship to other Federal and State agencies the fair hearings process and the process for determining eligibility.

Increases the personal needs allowance.

Increases the federal medical assistance percentage of one percentage point for adult vaccine and clinical preventive service expenditures in accordance with section 41 06 of the Affordable Care Act.

Provides for a three percent increase in the base per diem rates for nursing facility and HIV nursing facility services. Additons to the base rate and certain explicit items of fixed cost are excluded from the increase.

Provides that inpatient hospital services furnished by private hospitals will be reimbursed under an All Patient Refined Diagnosis Related Group prospective payment methodology.

Increases the amounts of the Arizona graduate medical education and indirect medical education payment pools and designates an additional qualifying teaching hospital for each payment pool for the fiscal period of July 1, 2011 to June 30, 2012.