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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
House: APPROP DP 11-7-0-0 | Third Read 33-20-7-0
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HB 4145: 2026-2027; health care.
Sponsor: Representative Livingston, LD 28
Vetoed by the Governor
Overview
Contains provisions relating to health care needed to implement the FY 2027 budget.
History
The Arizona Legislature adopts a budget for each fiscal year (FY) that contains general appropriations. Article IV, Section 20, Part 2, Constitution of Arizona, requires the General Appropriations Act (feed bill) to contain only appropriations for the different state departments, state institutions, public schools and interest on public debt. Statutory changes necessary to reconcile the appropriations made in the feed bill and other changes are drafted into separate budget bills. These bills are prepared according to subject area.
Provisions
Arizona Department of Administration (ADOA)
1. Requires ADOA to implement a 10% increase to medical premiums paid by active employees and retirees enrolled in the state employee health plan for Plan Year (PY) 2027. (Sec. 6)
2. States the Legislature intends that ADOA increase these premiums by an additional 5% in PY 2028 and 5% in PY 2029. (Sec. 6)
Arizona Health Care Cost Containment System (AHCCCS) Member Eligibility
3. Requires AHCCCS to enter into a data matching agreement with Department of Revenue (DOR) to identify members who have lottery or gambling winnings of $3,000 or more and directs AHCCCS to review this information at least once a month. (Sec. 1)
4. Declares that a member who fails to disclose winnings of $3,000 or more and who is identified by AHCCCS through the database match is in violation of AHCCCS's terms of eligibility. (Sec. 1)
5. Requires AHCCCS, at least once a month, to:
a. receive and review death record information from the Department of Health Services concerning its members and to adjust system eligibility accordingly; and
b. review information concerning members indicating a change in circumstances that may affect eligibility, including changes in residency as identified by out-of-state electronic benefit transfer card transactions. (Sec. 1)
6. Directs AHCCCS, at least once a quarter, to:
a. redetermine the eligibility of able-bodied adults who are eligible and not American Indians or Alaskan natives; and
b. for the purposes of the redetermination process, receive and review information from:
i. DOR that indicates a change in members' circumstances that may affect eligibility, including potential changes in income, wages or residency as identified by tax records; and
ii. DES concerning members that indicates a change in circumstances that may affect eligibility, including changes to unemployment benefits, status or wages. (Sec. 1)
7. Prohibits AHCCCS, unless required by federal law, from accepting self-attestation of income, residency, age, household composition, caretaker or relative status or receipt of other health insurance coverage without independent verification before enrollment. (Sec. 1)
8. Bars AHCCCS from requesting the authority to waive or decline to periodically check any available income-related data sources to verify eligibility. (Sec. 1)
9. Prohibits AHHCS from accepting eligibility determinations for the system from a federally-facilitated exchange established in accordance with federal law. (Sec. 1)
10. Allows AHCCCS to accept assessments from a federally-facilitated exchange established in accordance with federal law. (Sec. 1)
11. Requires AHCCCS to independently verify eligibility and make eligibility determinations from the assessments accepted from a federally-facilitated exchange. (Sec. 1)
12. Requires AHCCCS to review a member’s eligibility if it receives information concerning that member indicating a change in circumstances that may affect eligibility. (Sec. 1)
13. Allows AHCCCS to enter a memorandum of understanding with any other department of this state to obtain the required information. (Sec. 1)
14. Authorizes AHCCCS to contract with one or more independent vendors to provide additional data or information that may indicate a change in an individual's circumstances and eligibility. (Sec. 1)
15. Requires AHCCCS to submit any waiver requests necessary to implement this act's requirements to the Centers for Medicare and Medicaid Services (CMS) on or before April 1, 2027. (Sec. 1)
Presumptive Eligibility Determinations
17. Declares that if the section 1115 waiver request for restricting presumptive eligibility is denied by CMS, AHCCCS is required to resubmit a subsequent request within 12 months of each denial. (Sec. 1)
18. Prohibits AHCCCS, unless required by federal law, from designating itself as a qualified health entity for the purpose of making presumptive eligibility determinations or for any other purpose not expressly authorized by statute. (Sec. 1)
19. Requires a qualified hospital making presumptive eligibility determinations to:
a. notify AHCCCS of each presumptive eligibility determination within five working days of the determination being made;
b. assist individuals determined to be presumptively eligible by the qualified hospital with completing and submitting a full application for AHCCCS eligibility;
c. notify each applicant in writing and on all relevant forms that if the applicant does not file a full application before the last day of the following month, presumptive eligibility coverage will end on the last day of the following month; and
d. notify each applicant that if they file a full application for AHCCCS eligibility before the last day of the following month coverage will continue until an eligibility determination is made on the filed application. (Sec. 1)
20. Outlines standards AHCCCS must establish and apply in order to ensure that accurate presumptive eligibility determinations are made by each qualified hospital. (Sec. 1)
21. Requires AHCCCS to notify a qualified hospital that fails to meet the established standards for any presumptive eligibility determinations within five days after the determination:
a. for the first violation:
i. a description of the standard that was not met and an explanation of why it was not met; and
ii. confirmation that a second finding will require all applicable hospital staff to participate in mandatory training by AHCCCS on hospital presumptive eligibility rules.
b. for the second violation;
i. a description of the standard that was not met and an explanation of why it was not met; and
ii. confirmation that all applicable hospital staff are required to participate in mandatory training by AHCCCS on hospital presumptive eligibility rules and the date, time and location of the training as determined by AHCCCS;
iii. a description of available appellate procedures by which a qualified hospital may dispute the finding and remove it from the hospital's record by providing clear and convincing evidence the standards were met; and
iv. confirmation that if the qualified hospital subsequently fails to meet any of the standards for presumptive eligibility the hospital will no longer be qualified to make presumptive eligibility determinations under AHCCCS.
c. For the third violation:
i. a description of the standard that was not met and an explanation of why it was not met; and
ii. a description of available appellate procedures by which a qualified hospital may dispute the finding and remove it from the hospital's record by providing clear and convincing evidence the standards were met; and
iii. confirmation that, effective immediate, the hospital is no longer qualified to make presumptive eligibility determinations under AHCCCS. (Sec. 1)
22. Contains an effective date of January 1, 2027. (Sec. 12)
County Session Law Provisions
23. Sets the annual county Arizona Long Term Care System (ALTCS) contributions for FY 2027 at $445,813,900 and:
a. outlines each county's contribution;
b. requires the State Treasurer to recover the cost of any funding that was not provided; and
c. requires the State Treasurer to deposit monies received into the ALTCS fund. (Sec. 2)
24. Requires the counties' share of the state's contribution to comply with federal maintenance of effort requirements. (Sec. 2)
25. Sets the FY 2027 county acute care contributions at $42,447,600 and:
a. outlines each county's contribution;
b. outlines payment processes and requirements;
c. requires the State Treasurer to recover the cost of any funding that was not provided by a county from other funds owed to that county, excluding the Highway User Revenue Fund; and
d. states that the Legislature intends that the Maricopa County contribution be reduced in each subsequent year according to changes in the GDP price deflator. (Sec. 5)
26. Continues to exclude Proposition 204 administration costs from county expenditure limitations. (Sec. 8)
27. Continues to exempt county expenditures on Restoration to Competency treatment at ASH from county expenditure limitations. (Sec. 9)
Disproportionate Share Hospital (DSH) Payment Session Law Provisions
28. Sets the annual DSH payment allotment to the Arizona State Hospital (ASH) at $28,474,900 for FY 2026 and:
a. requires ASH to provide a certified public expense form for qualifying DSH expenditures made to AHCCCS by March 31, 2026;
b. directs AHCCCS to:
i. assist ASH in determining the amount of qualifying DSH expenditures; and
ii. deposit the entire amount of federal financial participation in the state GF;
c. states that if the certification is less than $28,474,900, AHCCCS must:
i. notify the Governor and the Legislature; and
ii. deposit the entire amount of federal financial participation in the state GF; and
d. requires the certified public expense form to contain the total amount of qualifying DSH expenditures and the amount limited by the Social Security Act. (Sec. 3)
29. Establishes the annual DSH payment allotment for private qualifying DSH hospitals at $884,800 for FY 2026, consistent with the appropriation and the terms of the State plan and limits payments to hospitals that either:
a. meet the mandatory definition of DSH qualifying hospital under Section 1923 of the Social Security Act; or
b. are located in Yuma County and contain at least 300 beds. (Sec. 3)
30. Outlines the order of priority for DSH payment allotments for private qualifying hospitals once the preceding DSH distributions are made. (Sec. 3)
31. Requires, by December 31, 2027, for FY 2027, AHCCCS to transfer to the counties any portion necessary to comply with the Patient Protection and Affordable Care Act regarding the counties' proportional share of the state's contribution. (Sec. 4)
AHCCCS Mental Health Medication Utilization Report
32. Requires AHCCCS to report by January 31, 2027, on aggregate spending and aggregate utilization of mental health medications, including antipsychotics and antidepressants, during the contract year 2024-2025. (Sec. 7)
33. Requires the AHCCCS report on the costs and utilization of mental health medications to include the:
a. aggregate gross amount spent for each mental health medication class;
b. annual aggregate net amount spent for each mental health medication class after rebates, without disclosing any information about manufacturer-negotiated supplemental rebate agreements for any specific drug; and
c. average annual cost by class for generic and nongeneric mental health medications. (Sec. 7)
34. Requires AHCCCS to submit the mental health medication utilization report to the:
a. Governor;
b. chairpersons of the Health and Human Services Committees of the Senate and House of Representatives, or their successor committees;
c. Director of Joint Legislative Budget Committee;
d. Director of the Office of Strategic Planning & Budgeting; and
e. Secretary of State. (Sec. 7)
35. Requires the AHCCCS report on the costs and utilization of mental health medications, for antipsychotic and antidepressant medications, without disclosing any information about manufacturer-negotiated supplemental rebate agreements that could compromise the competitive or proprietary nature of the agreements, to include the:
a. total number of prior authorizations submitted for nonpreferred antipsychotic and antidepressant medications;
b. percentage of prior authorization approvals and denials;
c. generic antipsychotic and antidepressant medication utilization percentages; and
d. total amount of antipsychotic and antidepressant medication claims. (Sec. 7)
36. Defines mental health medication. (Sec. 7)
Miscellaneous
37. Allows, for the contract year beginning October 1, 2026, and ending September 30, 2027, AHCCCS to continue the risk contingency rate settings for all managed care organizations (MCO) and funding for all MCO administrative funding levels that were imposed for the contract year beginning October 1, 2010, and ending September 30, 2011. (Sec. 10)
38. Continues to state that it is the intent of the Legislature for FY 2027 that AHCCCS implement a program within its available appropriation. (Sec. 11)
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Initials AG HB 4145
5/11/2026 Page 0 Vetoed by the Governor
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