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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
prepaid capitated contractors; cost reports
Purpose
Requires, by December 1 of each year, each person or entity with a prepaid capitated contract with the Arizona Health Care Cost Containment System (AHCCCS) to report the percentage of monies spent in the previous contract year on direct patient care and administrative costs, by category, to specified officials.
Background
AHCCCS administers the state’s Medicaid program and delivers services to eligible members primarily through contracts with managed care organizations and other prepaid capitated contractors. AHCCCS pays contractors a fixed per-member, per-month payment to provide covered services. Contractors are then responsible for managing the delivery and cost of care within those payments. Through these contracts, AHCCCS provides coverage for specified health care services and supplies, including but not limited to inpatient and outpatient hospital services, laboratory and X-ray services, prescription medications and medical supplies, health screenings, diagnostic services and medical transportation (A.R.S. §§ 36-2901, 36-2904 and 36-2907).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires, by December 1 of each year, each person or entity with a prepaid capitated contract with AHCCCS to submit an annual report detailing the percentage of monies spent in the previous contract year on direct patient care and on administrative costs, by category, including an explanation of the components of each category of administrative expenditures, to:
a) the Joint Legislative Budget Committee;
b) the Governor;
c) the President of the Senate;
d) the Speaker of the House of Representatives; and
e) the members of the Senate and House of Representatives Health and Human Services Committees, or their successor committees.
2. Becomes effective on the general effective date.
Prepared by Senate Research
February 16, 2026
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