BILL #    SB 1116	TITLE: AHCCCS; claims review; behavioral health
SPONSOR:    Werner	STATUS: As Amended by Senate HHS
PREPARED BY:    Chandler Coiner

Description

The bill would require that any claim denial or adverse appeal determination based on the medical necessity of a behavioral service covered by the Arizona Health Care Cost Containment System (AHCCCS) be reviewed by an individual who has at least 2 years of relevant clinical experience providing the same or similar services.  

Estimated Impact

We estimate the bill could increase AHCCCS costs to the extent that the additional review requirements result in the approval of claims that would have otherwise been denied. However, we lack the data necessary to quantify the impact. The state's share of behavioral health service costs is covered by the General Fund.

At a January 21, 2026 Senate Health and Human Services hearing, AHCCCS stated it would need additional staff to comply with the requirements of the bill. We have asked AHCCCS for additional details on its estimate of the bill's fiscal impact but have not yet received a response.

Analysis

Our estimate assumes the following:

· The AHCCCS Contractor Operations manual requires AHCCCS health plans to use a "board-certified professional" to determine whether issuing a Notice of Adverse Benefit Determination (NOA), i.e. a decision to not pay for a requested service.

· We lack data to determine the share of board-certified professionals that would meet the additional requirements in the bill that such individuals have "at least 2 years of relevant clinical experience providing the same or similar services to the services at issue."

· To the extent that AHCCCS health plans do not currently have claims review staff meeting the experience requirements in the bill, AHCCCS health plans may incur additional administrative expenses to comply with the bill's requirements.

· Capitation funding for AHCCCS health plans incorporates funding for health plan administrative costs, such as claims processing.  As a result, if AHCCCS health plans incur additional administrative costs under the bill, AHCCCS actuaries may apply an upward adjustment to capitation funding to cover the cost. 

2/2/26