SB1611 - 572R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 36, chapter 29, article 1, Arizona Revised Statutes, is amended by adding section 36-2903.18, to read:

START_STATUTE36-2903.18. American Indian health program; administrative services contract; legislative review; administrative services organization; duties; office of tribal relations; definitions

A. Beginning October 1, 2027, the administration shall contract with a qualified contractor or other qualified entity to serve as the administrative services organization and to perform the functions prescribed in subsection i of this section for members enrolled in the American Indian health program, not including services provided to American Indian or Alaska native members through a tribal health program. The contract must comply with all applicable federal and state requirements, including the protections for Indians, Indian health care providers and Indian managed care entities pursuant to 42 Code of Federal Regulations section 438.14.

B. The administration shall retain ultimate responsibility for administering the American Indian health program, including fee-for-service rate setting and oversight of any administrative services organization contractor, and may not eliminate the American Indian health program as a fee-for-service option for eligible American Indian and Alaska native members.

C. As part of any request for proposals issued by the administration for an administrative services organization pursuant to this section, the administration shall require each offeror to demonstrate a proven history of competency and experience in providing robust case management AND compassionate, quality and compliant services to American Indian and Alaska native populations and in coordinating with tribal health programs.

D. Before issuing any request for proposals to procure an administrative services organization pursuant to subsection A of this section:

1. The administration shall complete meaningful and timely tribal consultation and urban confer regarding the implementation of this section and, within thirty days after completing the tribal consultation and urban confer, shall submit any state plan amendment or waiver to the centers for medicare and medicaid services.

2. Notwithstanding any law to the contrary:

(a) The administration shall transmit the proposed procurement strategy, minimum qualifications and evaluation factors to the senate and house of representatives health and human services committees, or their successor committees.

(b) The administration shall receive, thoughtfully consider and meaningfully and timely respond to written and oral comments from committee members and the public, including tribal governments, Indian health care providers and urban Indian organizations.

E. Notwithstanding any law to the contrary, for each procurement described in subsection d of this section:

1. Each federally recognized Indian tribe in this state may appoint one nonvoting observer to the source-selection evaluation committee convened by the administration. Each observer must be a member of a different federally recognized Indian tribe in this state.

2. The twenty-two nonvoting tribal member observers designated pursuant to paragraph 1 of this subsection may attend evaluation meetings, review materials submitted by offerors, ask questions and make statements during the evaluation meetings but may not score proposals, participate in final ranking or make or direct an award decision.

F. Notwithstanding any law to the contrary, after the completion of proposal evaluations and before the execution of any contract described in subsection A of this section, the administration shall transmit to the senate and house of representatives health and human services committees, or their successor committees, a summary of evaluation results and the proposed award recommendation.

G. This section does not:

1. Transfer source-selection or contract-award authority from the administration to the legislature, any legislative committee or any tribal government.

2. Conflict with the Arizona procurement code or any applicable federal procurement requirement. The administration remains the awarding agency and shall comply with all applicable state and federal procurement laws and regulations.

H. Any administrative arrangement authorized under this section must preserve:

1. The right of eligible American Indian and Alaska native members to elect the American Indian health program fee-for-service coverage.

2. The right of American Indian and Alaska native members to voluntarily enroll in and disenroll from a managed care organization consistent with federal law.

3. The protections afforded to Indians and Indian health care providers under 42 Code of Federal Regulations section 438.14, including out-of-network access and appropriate payment requirements for Indian health care providers.

I. Any entity that is procured pursuant to this section to perform program integrity, care management, provider support, quality improvement and data analytics functions and claims payment for the American Indian health program shall be organized and operated as a qualified contractor. the administrative services organization's performance of program integrity functions does not supersede the duties and responsibilities of the administration's office of inspector general to investigate fraud.

J. The administrative services organization and the administration shall establish a streamlined provider screening and registration process to ensure THAT only qualified providers are issued a valid Arizona health care cost containment system provider identification number. The administrative services organization may not require any additional provider registration. This subsection does not prohibit the administration or the administrative services organization from monitoring providers to ensure compliance with applicable laws, rules and policies.

K. The administrative services organization is prohibited from requiring prior authorization for any services being provided to an American Indian health program member when the member is being referred from a tribal health program to a nontribal health provider or facility. The administration and the administrative services organization may not require prior authorization for any services being provided to an American Indian health program member by a nontribal health provider or facility in a manner that is different from the Administration's policy in effect on January 1, 2026. Any changes to prior authorization requirements or policy that affect the American Indian health program may not be implemented until after the quarterly tribal consultation required by subsection N of this section.

L. The administrative services organization:

1. Shall conduct its duties in a manner that is corrective in nature, efficient, competent, state-of-the-art and culturally informed.

2. If an American Indian health program member receives services from a nontribal HEALTH program pursuant to a referral from a tribal health program, shall:

(a) When appropriate, coordinate care management and utilization management activities with the tribal health programs.

(b) Facilitate communication regarding referrals, authorizations AND claims processing and payment issues.

3. May not interfere with or override the clinical determinations or care management decisions of the referring tribal health program.

M. The administrative services organization shall establish an office of tribal relations, which shall:

1. Coordinate and communicate with the federally recognized Indian tribes in this state, tribal members and tribal HEALTH programs.

2. Serve as the primary point of contact between the administrative services organization and tribal governments and tribal health programs.

3. Participate in tribal consultation and stakeholder meetings as requested by tribal governments or the administration.

N. The administration and the administrative services organization shall consult quarterly with the governor or the governor's designee, tribal health programs, representatives of the federally recognized Indian tribes in this state, Arizona health care cost containment system providers and American Indian health program members to evaluate the performance of the administrative services organization and data analytics gathered from the preceding quarter by the parties to ensure that tribal members are receiving quality, safe and appropriate care.

O. For the purposes of this section:

1. "Administrative services organization" means a medicaid managed care organization that is a qualified contractor or other qualified entity that contracts with the administration to perform administrative functions, including program integrity, care management, provider support, quality improvement, data analytics and claims payment.

2. "American Indian health program":

(a) means the fee-for-service program operated by the administration for eligible American Indian and Alaska native members as required under federal law to preserve a fee-for-service option for American Indian and Alaska native beneficiaries.

(b) Does not include services provided to American Indian or Alaska native members through a tribal health program.

3. "Care management" means the coordination of a member's health care services to ensure medically necessary and appropriate care.

4. "data analytics" means the collection, integration, analysis and reporting of program claims and provider and member data to support program operations, decision-making and oversight.

5. "Program integrity" means functions designed to prevent, detect and investigate fraud, waste or abuse and to recover improper payments in the administration or delivery of covered services.

6. "provider support" includes:

(a) Provider education, training and technical assistance.

(b) Assistance with claims submission and billing issues.

7. "Qualified contractor" or "other qualified entity" means an entity that meets all applicable federal and state requirements to contract with the administration as a medicaid managed care organization, administrative services organization or similar entity.

8. "Quality improvement" means measuring, monitoring and improving the quality, safety and outcomes of health care services.

9. "Tribal health program" means any of the following:

(a) A tribal facility that is operated by an Indian tribe or tribal organization and that is authorized to provide services pursuant to Public Law 93-638, as amended.

(b) Any HEALTH care provider or facility that is operated by the Indian health service.

(d) Any HEALTH care provider or facility that is owned, operated or governed by a federally recognized Indian tribe in this state.

(e) A tribal regional behavioral health authority.

(f) An Urban Indian organization that is contracted or that receives grants to provide services pursuant to 25 United States Code chapter 18.

(g) A tribal HEALTH facility that is operated under an intergovernmental agreement between two or more Indian tribes in this state.END_STATUTE

Sec. 2. Legislative findings

The legislature finds and determines that immediate implementation of this act is necessary to strengthen program integrity and care management for American Indian and Alaska native members of the Arizona health care cost containment system, to protect those members from fraud and abuse and to preserve the public peace, health and safety.

Sec. 3. Emergency

This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.