SB1527 - 531R - Senate Fact Sheet

ARIZONA STATE SENATE

Fifty-Third Legislature, First Regular Session

FACT SHEET FOR S.B. 1527

health; budget reconciliation; 2017-2018

Purpose

Makes statutory and session law changes related to health and welfare necessary to implement the FY 2018 budget.

Background

The Arizona Constitution prohibits substantive law from being included in the general appropriations, capital outlay appropriations and supplemental appropriations bills. However, it is often necessary to make statutory and session law changes to effectuate the budget. Thus, separate bills called budget reconciliation bills (BRBs) are introduced to enact these provisions. Because BRBs contain substantive law changes, the Arizona Constitution provides that they become effective on the general effective date, unless an emergency clause is enacted.

S.B. 1527 contains the budget reconciliation provisions for changes relating to health and welfare.

Provisions

Arizona Health Care Cost Containment System (AHCCCS)

Covered Services

1. Makes outpatient occupational therapy a covered service.

2. Adds, for persons who are at least 21 years of age, emergency dental care and extractions in an annual amount up to $1,000 per member.

Transfer to Counties

3. Continues to require AHCCCS for FY 2017 to transfer to the counties by December 31, 2018, any portion necessary to comply with the Patient Protection and Affordable Care Act regarding the counties’ proportional share of the state’s contribution.

Safety Net Care Pool

4. Extends the Safety Net Care Pool for qualifying hospitals (Phoenix Children's Hospital) to 2020.

Children's Health Insurance Program (KidsCare)

5. Freezes enrollment in the KidsCare Program if the federal match rate falls below 100 percent, instead of if federal funding is eliminated.

AHCCCS: Disproportionate Share Hospital (DSH) Payments

6. Establishes the FY 2018 DSH payments as follows:

a) $108,874,800 for a qualifying non-state operated public hospital, of which $4,202,300 is distributed to the Maricopa County Special Health Care District (MIHS), and the remaining federal portion is distributed to the state General Fund (GF);

b) $28,474,900 for the State Hospital, of which the federal portion is distributed into the GF; and

c) $884,800 for private qualifying DSH hospitals, which are those hospitals that meet the mandatory definition of disproportionate share qualifying hospitals as defined by the Social Security Act or those hospitals that are located in Yuma County containing at least 300 beds.

7. Requires MIHS and the State Hospital to each provide a Certified Public Expense (CPE) form for the amount of qualifying DSH expenditures to AHCCCS by May 1, 2018, for MIHS and March 31, 2018, for the State Hospital.

8. Continues to require AHCCCS to assist MIHS and the State Hospital in determining the amount of qualifying expenditures and maintains reporting requirements and distribution procedures of received federal matching funds in FY 2018.

9. Outlines the following requirements once AHCCCS files a claim with the federal government and receives federal financial participation based on the amount certified by MIHS:

a) if the certification is equal to or less than $108,874,800 and AHCCCS determines that the revised amount is correct, AHCCCS shall notify the Governor, the Senate President and the Speaker of the House of Representatives (Speaker of the House), and distribute $4,202,300 to MIHS and deposit the balance of the federal financial participation to the GF;

b) if the certification is for an amount less than $108,874,800 and AHCCCS determines that the revised amount is incorrect, AHCCCS shall notify the Governor, the Senate President and the Speaker of the House and shall deposit the total amount of the federal financial participation in the GF; and

c) if the certification is for an amount greater than $108,874,800, AHCCCS shall distribute $4,202,300 to MIHS and $71,890,300 of the federal financial participation to the GF.

10. Allows AHCCCS to make additional DSH payments to MIHS.

11. Outlines the following requirements once AHCCCS files a claim with the federal government and receives federal financial participation based on the amount certified by State Hospital:

a) if the certification is for an amount less than $28,474,900, AHCCCS shall notify the Governor, the Senate President and the Speaker of the House and shall distribute the entire amount of federal financial participation to the GF; and

b) requires the CPE form to contain both the total amount of qualifying DSH expenditures and the amount limited by the Social Security Act.

12. Stipulates after DSH payment distributions are made, the allocation of DSH payments designated by a political subdivision, tribal governments and universities must be made available first to qualifying private hospitals located outside the Phoenix Metropolitan Statistical Area and the Tucson Metropolitan Statistical Area before being made available to qualifying hospitals within the areas.

Proposition 204 Administrative Costs

13. Continues to exclude county contributions for Proposition 204 administrative costs from county expenditure limitations.

Risk Contingency Rate Setting

14. Allows AHCCCS to continue risk contingency rate settings for all managed care organizations (MCOs) and funding for all MCOs administrative funding levels imposed in contract year 2010-2011 for the contract year beginning October 1, 2017, and ending September 30, 2018.

Demonstration Waiver Participation

15. Continues to allow AHCCCS to participate in any special disability workload 1115 Demonstration Waiver offered by CMS, and stipulates the following:

a) any credits provided by the 1115 Demonstration Waiver process are to be used in the fiscal year when those credits are made available to fund the state share of any medical assistance expenditures that qualify for federal financial participation under the Medicaid program; and

b) AHCCCS is required to biannually report the receipt of credits to the Joint Legislative Budget Committee (JLBC).

Nonemergency Emergency Department Use Report

16. Continues to require AHCCCS, by December 1, 2017 and by December 1 of each year thereafter, to report to the Directors of JLBC and the Governor's Office of Strategic Planning and Budgeting (OSPB) on the use of emergency departments for nonemergency purposes by AHCCCS members.

340B Drug Pricing Program

17. Continues to require AHCCCS, by November 1 of each year, to report to the Governor, the Senate President, the Speaker of the House and JLBC regarding the technological feasibility and costs of applying the 340B Drug Pricing Program to licensed hospitals and outpatient facilities that are owned or operated by a licensed hospital.

Inpatient Psychiatric Treatment Availability Report

18. Continues to require AHCCCS to report by January 2, 2018, to the Director of JLBC on the availability of inpatient psychiatric treatment both for adults and for children and adolescents who receive services from the regional behavioral health authorities (RBHAs). The report shall include all of the following information separately for adults who are at least 21 and for children and adolescents who are 21 or younger:

a) the total number of inpatient psychiatric treatment beds available and the occupancy rate for those beds;

b) expenditures on inpatient psychiatric treatment;

c) the total number of individuals in Arizona who are sent out of state for inpatient psychiatric care; and

d) the prevalence of psychiatric boarding or the holding of psychiatric patients in emergency rooms for at least 24 hours before transferring the patient to a psychiatric facility.

Legislative Intent

19. States it is the intent of the Legislature for FY 2018 that AHCCCS implement a program within the available appropriation.

Department of Health Services (DHS)

Public Health Emergencies Fund

20. Establishes the Public Health Emergencies Fund (Fund) consisting of legislative appropriations, and requires the Director of DHS to administer the Fund.

21. Stipulates that monies in the Fund are continuously appropriated and exempt from lapsing.

22. Allows monies to be spent for Arizona's public health emergency responses following a state of emergency declaration by the Governor.

23. Requires, by September 1 of each year, DHS to report any expenditures from the Fund to JLBC.

Family Planning Services Grant Application

24. Requires DHS, on an annual or otherwise applicable basis, to submit a grant application under Title X of the Public Health Service Act to the U.S. Department of Health and Human Services for monies to provide family planning services, and requires DHS to emphasize in the application that Arizona is best suited to receive and distribute these family planning services monies for Arizona.

25. Requires DHS to distribute any monies received from the aforementioned grant application in the following order of priority:

a) to health care facilities that are owned or operated by Arizona or any political subdivision of Arizona;

b) to hospitals and federally qualified health centers;

c) to rural health clinics; and

d) to health care providers whose primary area of practice is the provision of primary health services as enumerated in 42 United States Code section 254b(b)(1).

Health Services Lottery Monies Fund

26. Allows monies in the Health Services Lottery Monies Fund to be used for purposes specified in the FY 2018 General Appropriations Act.

Health Research Account—Alzheimer's Disease Research

27. Continues to allow DHS to use monies in the Health Research Account as specified in the General Appropriations Act for Alzheimer’s disease research.

County Reimbursement: Sexually Violent Persons

28. Continues to require a county, if the state pays the costs of the commitment of a sexually violent individual, to reimburse DHS for 31 percent of the total costs for FY 2018, and requires DHS to deposit the reimbursements in the Arizona State Hospital Fund.

29. Requires each county to make the reimbursements within 30 days after a request by DHS.

30. Requires the Superintendent of the State Hospital (Superintendent), if the county does not make the reimbursement, to notify the State Treasurer (Treasurer) of the amount owed, and requires the Treasurer to withhold the amount, including interest, from any transaction privilege tax distributions to the county. The Treasurer is required to deposit these withholdings into the Arizona State Hospital Fund.

31. Allows a county to meet the funding requirements using any source of county revenue designated by the county, including funds of any countywide special taxing districts in which the board of supervisors serves as the board of directors.

32. Excludes county contributions regarding the commitment of sexually violent persons from the county expenditure limitation.

33. Defines costs of commitment as the costs associated with the detainment of a person in a licensed facility under the supervision of the Superintendent before the court determines that the person is sexually violent and the costs of detainment of the person after the court has determined that the person is sexually violent.

City, Town or County Reimbursements: Competency Restoration Treatment

34. Continues to require a city, town or county, if the state pays the costs of a defendant’s inpatient, in-custody competency restoration treatment, to reimburse DHS for 100 percent of the costs for FY 2018, and requires DHS to deposit the reimbursements into the Arizona State Hospital Fund.

35. Requires each city, town or county to make the reimbursements within 30 days after a request by DHS.

36. Requires the Superintendent, if the city, town or county does not make the reimbursements, to notify the Treasurer of the amount owed, and requires the Treasurer to withhold the amount, including interest, from any transaction privilege tax distributions to the city, town or county. The Treasurer is required to deposit the withholdings into the Arizona State Hospital Fund.

37. Allows a county to meet the funding requirements using any source of county revenue designated by the county, including funds of any countywide special taxing districts in which the board of supervisors serves as the board of directors.

38. Excludes county contributions regarding the reimbursement for competency restoration treatments from the county expenditure limitation.

Hospital Charge Master Transparency Report

39. Continues to require the Directors of AHCCCS and DHS, by January 2, 2018, to submit a joint report on hospital charge master transparency to the Governor, Legislature and Secretary of State, and requires the report to provide the following information:

a) a summary of the current charge master reporting process;

b) a summary of hospital billed charges compared to costs;

c) examples of how charge master or hospital prices are reported and used in other states; and

d) recommendations to improve the state’s use of hospital charge master information, including reporting oversight changes.

Department of Economic Security (DES)

ALTCS Fund

40. Prohibits the amount of monies from the Arizona Long Term Care System (ALTCS) Fund that are reverted to the state GF from being adjusted to pay non-Medicaid claims incurred by the Division of Developmental Disabilities.

41. Allows DES, retroactive to July 1, 2017, to use unexpended and unencumbered monies from capitation payments in the DES Long Term Care System Fund for state-only program expenses within the Division of Developmental Disabilities, and requires DES to submit an expenditure plan for review by JLBC before making any expenditures.

County Contributions/Payments

County ALTCS Contributions

42. Outlines the following FY 2018 county contributions for ALTCS, totaling $264,673,200:

Apache	$657,500
Cochise	$5,241,100
Coconino	$1,974,000
Gila	$2,208,500
Graham	$1,561,800
Greenlee	$28,000
La Paz	$526,000
Maricopa	$165,477,400
Mohave	$8,350,800
Navajo	$2,721,500
Pima	$40,974,000
Pinal	$15,344,200
Santa Cruz	$2,040,600
Yavapai	$8,840,500
Yuma	$8,727,300

43. Requires the Treasurer to collect from the counties the difference between the total contribution and the counties’ share of the state’s actual contribution if the overall cost for ALTCS exceeds the amount specified in the General Appropriation Act for FY 2018.

44. Requires the counties’ share of the state’s contribution be in compliance with any federal maintenance of effort requirements.

45. Requires the Director of AHCCCS to notify the Treasurer of the counties’ share of the state’s contribution and report the amount to the Director of JLBC.

46. Requires the Treasurer to:

a) withhold from any other monies payable to a county from whatever state funding source is available, except the Arizona Highway User Revenue Fund, an amount necessary to fulfill that county’s requirement; and

b) deposit the amounts withheld and amounts paid by counties in the ALTCS Fund.

County Acute Care Contributions

47. Outlines the following FY 2018 County Acute Care contributions, totaling $46,813,400:

Apache	$268,800
Cochise	$2,214,800
Coconino	$742,900
Gila	$1,413,200
Graham	$536,200
Greenlee	$190,700
La Paz	$212,100
Maricopa	$18,783,100
Mohave	$1,237,700
Navajo	$310,800
Pima	$14,951,800
Pinal	$2,715,600
Santa Cruz	$482,800
Yavapai	$1,427,800
Yuma	$1,325,100

48. Requires the Treasurer, if a county does not provide the aforementioned funding, to:

a) subtract the amount owed by the county from any payments required to be made by the Treasurer to the county plus interest on that amount, retroactive to the first day the funding was due; and

b) if the aforementioned amount withheld is insufficient to meet that county’s funding requirement, withhold from any other monies payable to that county from whatever state funding source is available, except the Arizona Highway User Revenue Fund, an amount necessary to fulfill that county’s requirement.

49. Requires payment equal to one-twelfth of the total amount for Acute Care contributions to be made to the Treasurer by the fifth day of each month, and requires the Treasurer, on request from the Director of AHCCCS, to require that up to three months’ payment be made in advance, if necessary.

50. Requires the Treasurer to deposit the amounts paid or withheld into the AHCCCS Fund and the ALTCS Fund.

51. Allows the Director of AHCCCS, if payments made exceed the amount required to meet the costs incurred by AHCCCS for the hospitalization and medical care of eligible persons, to instruct the Treasurer to either:

a) reduce remaining payments to be paid by a specified amount; or

b) provide to the counties specified amounts from the AHCCCS Fund and the ALTCS Fund.

52. States that it is the intent of the Legislature that the Maricopa County Acute Care contribution be reduced in each subsequent year according to the changes in the GDP price deflator.

53. Requires the Treasurer to withhold one-eleventh of the following amounts from state transaction privilege tax revenues otherwise distributable, after any amounts withheld for the county ALTCS contribution or the county administration contribution, for deposit into the AHCCCS Fund for the provision of hospitalization and medical care:

Apache	$87,300
Cochise	$162,700
Coconino	$160,500
Gila	$65,900
Graham	$46,800
Greenlee	$12,000
La Paz	$24,900
Mohave	$187,400
Navajo	$122,800
Pima	$1,115,900
Pinal	$218,300
Santa Cruz	$51,600
Yavapai	$206,200
Yuma	$183,900

54. Requires the Treasurer, if monies withheld are insufficient to meet a county’s funding requirement, to withhold from any other monies payable to a county from whatever state funding source is available, except monies from the Highway User Revenue Fund, an amount necessary to fulfill that county’s requirement.

55. Allows the AHCCCS Director to request the Treasurer to require that up to three months' payments be made in advance.

56. Allocates the sum of $2,646,200 in FY 2018 withheld for the county Acute Care Contribution for the provision of hospitalization and medical care services administered by AHCCCS.

57. Excludes county contributions made from the county expenditure limitations.

Miscellaneous

58. Makes technical and conforming changes.

59. Becomes effective on the general effective date.

Prepared by Senate Research

May 2, 2017

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