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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
REVISED #2
AMENDED
AHCCCS; claims review; behavioral health
Purpose
Requires a claim denial or adverse appeal determination based on the medical necessity of a behavioral health service covered by a specified public health program, to be reviewed and approved by an individual with specified relevant clinical experience.
Background
The Arizona Health Care Cost Containment System (AHCCCS) serves as Arizona's Medicaid agency, which offers qualifying Arizona residents access to healthcare programs, including behavioral health. AHCCCS consists of contracts with contractors for the provision of hospitalization and medical care coverage to members. A contractor is a person or entity that has a prepaid capitated contract with AHCCCS to provide health care to members as prescribed, either directly or through subcontracts with providers (A.R.S. §§ 36-2901 and 36-2903).
American Indians and Alaska Natives enrolled in AHCCCS may choose to receive coverage through the American Indian Health Program (AIHP). The AIHP provides medically necessary services to enrolled members, including preventative and behavioral health care services. Members enrolled in the AIHP may receive health care services from Indian Health Facilities operated by the Indian Health Service, tribally-operated 638 health programs or urban Indian health clinics and other AHCCCS-registered providers (AHCCCS).
A capped
fee-for-service is the payment mechanism by which a provider of care is
reimbursed upon submission of a valid claim for a specific covered service or
equipment provided to a member. A payment is made in accordance with an upper
or capped limit established by the Director of AHCCCS and may either be a
specific dollar amount or a percentage of billed charges. AHCCCS must pay
providers, including both contracting and noncontracting providers, at either
the lesser of billed charges or outlined capped fee-for-service rates, unless a
different fee is specified in a contract between AHCCCS and the provider, or is
otherwise required by law. Fee schedules for payment for various covered
services are on file at the central office of AHCCCS for reference use during
customary business hours and on the AHCCCS website (A.A.C.
R9-22-101 and R9-22-710; AHCCCS).
The Joint Legislative Budget Committee (JLBC) estimates that S.B. 1116 as amended by the Health and Human Services Committee could increase AHCCCS state General Fund costs if the additional review requirements lead to approval of claims that would otherwise have been denied. However, JLBC notes that there is insufficient data to quantify the impact (JLBC fiscal note).
Provisions
1. Requires, before a claim denial or adverse appeal determination based on the medical necessity of a behavioral health service covered by a specified public health program, review of the claim and supporting medical documentation and approval of the denial or adverse determination by an individual with at least two years of relevant clinical experience providing the same or similar services.
2. Becomes effective on the general effective date.
Amendments Adopted by the Health and Human Services Committee
1. Expands the conditions that prompt a review to include any claim denial or adverse appeal determination, rather than any appeal, based on the medical necessity of a behavioral health service covered by AHCCCS.
2. Requires the review and approval of a claim denial or adverse appeal determination to be conducted by an individual with at least two years of relevant experience providing the same or similar services.
Amendments Adopted by the Appropriations, Transportation & Technology Committee
1. Expands the conditions that prompt a review to include any claim denial or adverse appeal determination, rather than any appeal, based on the medical necessity of a behavioral health service covered by the AIHP.
2. Requires the review and approval of a claim denial or adverse appeal determination to be conducted by an individual with at least two years of relevant experience providing the same or similar services.
Revisions
· Adds amendments adopted by the Health and Human Services Committee.
Senate Action
HHS 1/15/26 DPA 7-0-0
ATT 2/11/26 DPA 10-0-0
Prepared by Senate Research
March 26, 2026
MM/SDR/hk