SB1629 - 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 36-2930.07, to read:

START_STATUTE36-2930.07. Managed care organizations; high-volume service providers; termination without cause; written notice; determination of network adequacy; definitions

A. Before a managed care organization may terminate a high-volume service provider's contract without cause, the managed care organization shall submit written notice to the administration at least ninety days before the proposed effective date of the termination.

B. The notice to the administration pursuant to subsection A of this section shall include all of the following:

1. Documentation showing that the service provider is a high-volume service provider, including the specific data sources, calculation methodology and metrics used.

2. A network adequacy study performed by the managed care organization that evaluates and documents, at a minimum:

(a) Current and projected posttermination service provider-to-enrollee ratios by service provider type and geographic service area.

(b) Current appointment wait time performance for the affected services.

(d) The impact on members who are receiving behavioral health services associated with the member's disability.

(e) The cumulative effect of all pending or recently completed without-cause terminations of high-volume service providers by the managed care organization.

(f) Any additional factors the managed care organization or the administration identifies as relevant to network adequacy.

3. The managed care organization's preliminary assessment of the impact of the termination on network adequacy.

4. Any mitigation measures the managed care organization is proposing.

C. If there is a discrepancy between the managed care organization and the service provider of whether the service provider is a high-volume service provider, the managed care organization shall notify the administration and provide documentation supporting the managed care organization's decision not to file the written notice pursuant to subsection A of this section. The administration shall review the documentation and decide whether the managed care organization is required to file written notice pursuant to subsection A of this section. the administration shall notify the service provider of the decision.

D. A managed care organization may not terminate a high-volume service provider without cause until the administration has reviewed the managed care organization's network adequacy study and has provided written confirmation that applicable network adequacy standards will continue to be met after the termination of the high-volume service provider. The administration shall complete its review of the network adequacy study within ten business days after receiving the notice pursuant to subsection A of this section.

E. If the administration agrees with the managed care organization's decision based on the findings provided, the administration shall both:

1. Post the managed care organization's complete network adequacy study, including methodology, data sources, metrics and findings, and the administration's determination on the administration's public website and send a copy to the chairpersons of the senate and house of representatives health and human resources committees, or their successor committees, and the governor's office.

2. Provide written notice of the administration's determination to the managed care organization.

F. If the administration determines that network adequacy standards would not be met, the managed care organization may not proceed with the high-volume service provider's termination unless the managed care organization demonstrates to the administration's satisfaction that network adequacy standards will be met.

G. If a managed care organization declines to contract with a service provider or potential service provider due to a determination of network adequacy, the managed care organization shall complete and send to the administration a network adequacy study, including the specific data sources, calculation methodology and metrics used to support the denial decision. The study must include, at a minimum:

1. Service provider-to-enrollee ratios by service provider type.

2. Current appointment wait time performance for the services that the applicant was to provide.

3. All pending or recently completed terminations of high-volume service providers without cause in the geographic area that the applicant would have served.

4. Any additional factors the managed care organization or the administration identifies as relevant to network adequacy.

H. The administration shall post the managed care organization's complete network adequacy study submitted pursuant to subsection G of this section on the administration's public website and send a copy to the chairpersons of the senate and house of representatives health and human resources committees, or their successor committees, and the governor's office.

I. For the purposes of this section:

1. "High-volume service provider" means a service provider that meets either of the following:

(a) Delivered at least ten percent of any specific service for a managed care organization in the preceding state fiscal year.

(b) Employs more than ten percent of the actively licensed behavioral health providers in this state.

2. "Managed care organization" means a contractor that has a prepaid capitated contract with the administration or a regional behavioral health authority.

3. "Service provider" means an organization or mental health professional that meets the criteria established by the administration and that has a contract with the administration or a regional behavioral health authority. END_STATUTE

Sec. 2. Title 36, chapter 29, article 2, Arizona Revised Statutes, is amended by adding section 36-2961, to read:

START_STATUTE36-2961. Managed care organizations; high-volume service providers; termination without cause; written notice; determination of network adequacy; definitions