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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
Senate: HHS DPA 7-0-0-0 | ATT DPA 10-0-0-0 | Third Read 28-2-0-0
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SB 1630: home; community-based services; mental illness
NOW: enhanced residential treatment; SMI
Sponsor: Senator Angius, LD 30
House Engrossed
Overview
Establishes a three-year Seriously Mentally Ill (SMI) Enhanced Residential Treatment Pilot Program (Pilot Program), subject to federal approval, available appropriations and enrollment limits, beginning on the date the Centers of Medicare & Medicaid Services (CMS) approves the pilot program. Outlines coverage, eligibility, capacity and reporting requirements.
History
Established in 1981, AHCCCS is Arizona's Medicaid program that oversees contracted health plans for the delivery of health care to individuals and families who qualify for Medicaid and other medical assistance programs. Through contracted health plans across the state, AHCCCS delivers health care to qualifying individuals including low-income adults, their children or people with certain disabilities.
The Arizona Long Term Care System (ALTCS) includes the management and delivery of hospitalization, medical care, institutional services and home and community-based services to members through AHCCCS, program contractors and providers. AHCCCS maintains the full operational responsibility for the system and those responsibilities are outlined in statute (A.R.S. § 36-2932).
Home and community-based services may be provided in a member's home, at an alternative residential setting or at other behavioral health alternative residential facilities licensed by the Arizona Department of Health Services (DHS) and approved by the Director of AHCCCS (Director). Under current law, home and community-based services include the following: 1) home health; 2) licensed health aide services; 3) homemaker; 4) personal care; 5) day care; 6) habilitation; 7) respite care; 8) transportation; and 9) other services or licensed or certified settings approved by the Director (A.R.S. §§ 36-2931 and 36-2939(B)).
Additionally, home and community-based services may be provided in a member's home, in an adult foster care home, in an assisted living home or assisted living center or in a level one or level two behavioral health alternative residential facility approved by the Director by program contractors to all members who do not have a developmental disability and are determined to need institutional services (A.R.S. § 36-2939(C)).
Seriously mentally ill means persons who, as a result of a mental disorder, exhibit emotional or behavioral functioning that is so impaired as to interfere substantially with their capacity to remain in the community without supportive treatment or services of a long-term or indefinite duration. In these persons mental disability is severe and persistent, resulting in a long-term limitation of their functional capacities for primary activities of daily living such as interpersonal relationships, homemaking, self-care, employment and recreation (A.R.S. § 36-550).
Provisions
Enhanced Residential Treatment Facilities
1. Requires the Arizona Department of Health Services to license enhanced residential treatment facilities (ERTF) and adopt rules that include licensure standards, staffing requirements and physical plant standards. (Sec. 2)
2. Allows an ERTF to provide program and services through a combination of facility-based or coordinated community-based services, to residents who are SMI. (Sec. 2)
3. Applies the estate recovery program provisions to persons who are eligible for the SMI ERTF Pilot Program. (Sec. 3)
SMI Enhanced Residential Treatment Pilot Program
4. Establishes a three-year SMI Pilot Program, subject to CMS approval, available appropriations and enrollment limits, beginning on the date CMS approves the pilot program. (Sec. 4)
5. Specifies that the SMI Pilot Program operates through and is administered by AHCCCS-contractor agreements. (Sec. 4)
6. Requires AHCCCS to seek any necessary federal authority to implement the SMI Pilot Program, including under other applicable federal authority and request approval no later than July 1, 2027. (Sec. 4)
7. Requires AHCCCS to begin enrolling eligible individuals no later than one year after receiving federal approval, subject to available appropriations. (Sec. 4)
8. Requires AHCCCS to incorporate the SMI Pilot Program requirements into contractor executed agreements and require contractors to fulfill these obligations as part of their contractual duties. (Sec. 4)
9. Directs AHCCCS, through the submission of the first annual report, to convene a stakeholder workgroup that includes representatives from behavioral health providers, counties, tribal nations, community organizations and family members, caregivers and guardians of SMI individuals to advise on pilot program design and implementation. (Sec. 4)
10. Requires stakeholder input to specifically address the needs of individuals who require complex medication management, enhanced monitoring and structured supports services to promote medication continuity and safety. (Sec. 4)
11. Directs AHCCCS, until the SMI Pilot Program is implemented, to provide semiannual implementation updates to the President of the Senate, the Speaker of the House of Representatives and the Chairpersons of the Health and Human Services Committees, or their successor committees. (Sec. 4)
12. Allows AHCCCS to implement the Pilot program through policy, contract requirements and other administrative mechanisms authorized pursuant to statute. (Sec. 4)
SMI Pilot Program Capacity and Provider Requirements
13. Limits the SMI Pilot Program to 65 members statewide, subject to CMS approval and available appropriations. (Sec. 4)
14. Permits AHCCCS to increase enrollment above 65 members if data reported in the annual report demonstrates reduced utilization of high-cost services or cost avoidance in state-funded systems, subject to JLBC review. (Sec. 4)
15. Allows a court to recommend participation in the HCBS Program, but may not compel AHCCCS to exceed the enrollment cap. (Sec. 4)
16. Requires ERTS providers to document behavioral interventions, crisis support and staffing adjustments before initiating the discharge of any member. (Sec. 4)
17. Requires an ERTS provider to implement transition and discharge planning protocols and obtain approval from a contractor before issuing to a member of nonemergency notice to vacate. (Sec. 4)
18. Allows AHCCCS to adopt enhanced reimbursement rates for enhanced residential treatment services provided to members. (Sec. 4)
19. Requires AHCCCS to incorporate reimbursement rates and methodologies into contractor agreements. (Sec. 4)
20. Clarifies this does not:
a. limit AHCCCS's authority to ensure the health and safety of members;
b. require a provider to continue services when immediate and documented risks to health or safety cannot be mitigated through reasonable clinical interventions; or
c. require a contractor to continue paying for services that are not medical necessary. (Sec. 4)
Eligibility
21. Outlines eligibility as follows:
a. be 18 years of age or older;
b. be an Arizona resident;
c. have been determined to be SMI;
d. meet the SMI enhanced level of care adopted by AHCCCS; and
e. meet the financial eligibility requirements. (Sec. 4)
22. Requires AHCCCS to determine financial eligibility for the SMI Pilot Program and is prohibited from delegating that function to a contractor. (Sec. 4)
23. Declares an individual who is financially eligible for the SMI Pilot Program if the individual's income does not exceed 300% of the federal supplemental security income benefit rate and the individual meets the resource requirement for long-term care programs, in accordance with federal law. (Sec. 4)
24. Allows an individual whose income exceeds the rate standard to establish a qualified income trust to achieve financial eligibility. (Sec. 4)
25. Applies AHCCCS provisions relating to financial instruments, estate recovery, and liens to applicants and members of the SMI Pilot Program in the same manner as they apply to participants in the Arizona Long-Term Care System (ALTCS). (Sec. 4)
26. Provides that references to ALTCS in statutes incorporated into the SMI Pilot Program are deemed to refer to the SMI Pilot Program, as applicable. (Sec. 4)
27. Directs AHCCCS to adopt a SMI enhanced level of care specific to individuals who are SMI that is based on behavioral, functional and safety criteria and prohibits requiring physical disability or physical impairment criteria, as outlined. (Sec. 4)
28. Permits AHCCCS to modify the eligibility processes through policy consistent with regulations, subject to any necessary approval by CMS and available appropriations. (Sec. 4)
Enrollment
29. Requires individuals seeking enrollment in the pilot program to apply through their AHCCCS contractor, which must determine whether the individual meets the SMI enhanced level of care criteria and forward eligible applications to AHCCCS for a financial eligibility determination. (Sec. 4)
30. Allows individuals who are not enrolled with a contractor to apply directly through AHCCCS. (Sec. 4)
31. Authorizes AHCCCS, subject to CMS approval, available appropriations, and enrollment limits, to delegate to contractors' responsibility for determining whether applicants meet the SMI enhanced level of care criteria and for managing SMI Pilot Program waitlists, enrollment decisions, and capacity prioritization for individuals determined financially eligible by AHCCCS. (Sec. 4)
32. Requires AHCCCS or a delegated contractor to:
a. apply program eligibility criteria;
b. maintain waitlists of up to 100 eligible applicants;
c. establish an interest list if the waitlist reaches capacity;
d. use enrollment controls to remain within the enrollment cap;
e. prioritize available program slots according to specified factors; and
f. report enrollment data to AHCCCS as required by policy. (Sec. 4)
33. Requires contractors, when the number of financially and clinically eligible individuals exceeds available program capacity, to prioritize enrollment based on clinical acuity and functional impairment using a methodology that considers factors including:
a. individuals under court-ordered treatment;
b. individuals with legal guardianship due to psychiatric incapacity;
c. individuals recently discharged from jail or prison, the Arizona State Hospital or a behavioral health residential facility;
d. individuals with repeated crisis episodes, psychiatric hospitalizations or public safety involvement;
e. individuals presenting significant safety risks due to psychiatric symptoms; and
f. individuals with high-intensity or complex psychotropic medication regimens requiring enhanced monitoring to ensure adherence and to identify potential afverse effects. (Sec. 4)
34. Requires AHCCCS to retain authority to review and reverse contractor clinical eligibility, enrollment determinations and to audit contractor compliance with eligibility and enrollment requirements. (Sec. 4)
35. Permits AHCCCS to reserve a portion of available enrollment capacity for emergency or priority placements. (Sec. 4)
Covered Services
36. Requires AHCCCS contractors, subject to CMS approval, available appropriations, and enrollment limits, to provide enrolled members with the following services:
a. all services that the contractor is required to provide to SMI individuals under contractor's agreement with AHCCCS, including behavioral health services, physical health services, crisis services, case management and peer support services; and
b. enhances residential treatment services. (Sec. 4)
37. Requires contractors to conduct, at minimum, an annual review of the ongoing medical necessity of services for each member and engage with the member to plan for transition to a less restrictive setting when clinically appropriate. (Sec. 4)
38. Allows AHCCCS to add, modify or combine services consistent with federal approval and legislative intent, subject to the approval of monies. (Sec. 4)
Service Plan
39. Requires contractors to develop and maintain a written service plan for each member that must:
a. be based on a comprehensive assessment of the member's behavioral health, functional and safety needs;
b. identify the specific services and support to be provided and the settings in which the services and support will be provided;
c. include goals for recovery, stability and, if appropriate, transition to less restrictive settings; and
d. be updated at least annually or more frequently if the member's needs change. (Sec. 4)
Grievance and Appeal Process
40. Establishes grievance, appeal, and hearing rights for members and applicants aggrieved by eligibility, enrollment, or service decisions made by AHCCCS or its contractors. (Sec. 4)
41. Specifies that contractor's grievance and appeal process applies to matters, including denials, reductions or terminations of enhanced residential treatment services and contractor clinical eligibility determinations. (Sec. 4)
42. Requires appeals of financial eligibility determinations made by AHCCCS to be heard pursuant to rules adopted. (Sec. 4)
Miscellaneous
43. Requires AHCCCS, beginning one year after implementation of the SMI Pilot Program, and each year thereafter for the duration of the program, to submit an annual report to the Governor, President of the Senate and Speaker of the Arizona House of Representatives that includes:
a. the number of enrolled members and individuals who are on the waitlist and the interest list for services who have not yet been enrolled, if applicable;
b. the percentage of members who are under court-ordered treatment, guardianship or criminal justice supervision;
c. housing stability outcomes for members;
d. hospitalization, crisis service, jail, emergency department, evaluation agency and screening agency utilization of members;
e. provider denials and discharges and reasons for the denials and discharges;
f. the number of members served in ERTFs; and
g. the fiscal impact and estimated cost avoidance related to the HCBS Program. (Sec. 4)
44. Directs AHCCCS to seek and maintain any necessary federal approvals and may operate the SMI Pilot Program pursuant to one or more approved Medicaid state plan authorities, waivers or demonstration authorities, including those authorized under Medicaid waiver authority or other applicable federal authority. (Sec. 4)
45. Requires AHCCCS, if CMS denies or does not approve a request necessary to implement the SMI Pilot Program, to continue to pursue approval to the extent allowed by federal law through modifications, resubmissions or alternative federal authority. (Sec. 4)
46. Requires AHCCCS to obtain legislative approval for modifications or resubmissions that are inconsistent with these regulations. (Sec. 4)
47. Requires AHCCCS to report the status of approval efforts in the semiannual implementation updates. (Sec. 4)
48. Clarifies this does not expand or modify standards for involuntary treatment. (Sec. 4)
49. Requires enhanced residential treatment services to supplement but not replace any other benefits or services for which a member is overwise eligible. (Sec. 4)
50. Requires AHCCCS to coordinate benefits with other payors, including Medicare and private insurance to the extent required by federal law. (Sec. 4)
51. Prohibits a member in the SMI Pilot Program from being enrolled in ALTCS. (Sec. 4)
52. Repeals the SMI Pilot Program three years after the date that CMS approves of the pilot program. (Sec. 5)
53. Directs AHCCCS to notify the Director of the Arizona Legislative Council in writing of this date. (Sec. 5)
54. Defines pertinent terms. (Sec. 4)
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Initials AG SB 1630
6/11/2026 Page 0 House Engrossed
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