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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
appropriation; behavioral health provider rates
Purpose
Appropriates $60,000,000 from the state General Fund (state GF) in FY 2027 to the Arizona Health Care Cost Containment System (AHCCCS) to provide a 10 percent reimbursement rate increase for behavioral health services to Medicaid providers and prescribes requirements for the distribution of monies.
Background
AHCCCS serves as Arizona's Medicaid agency, which offers qualifying Arizona residents access to healthcare programs, including behavioral health. AHCCCS contracts with health professionals to provide medically necessary health and medical services to eligible members. AHCCCS provides both inpatient and outpatient behavioral health services, including but not limited to: 1) all behavioral health services, medical detoxification, accommodations and staffing, supplies and equipment, if provided under the direction of a physician of a Medicare-certified, inpatient facility; 2) screenings provided by a behavioral health professional or technician; 3) a behavioral health assessment provided by a behavioral health professional or technician; 4) counseling, including individual therapy, group therapy and family therapy provided by a behavioral health professional or technician; 5) behavior management services; and 6) psychosocial rehabilitation services (A.R.S. § 36-2907; A.A.C. R9-22-1205).
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 (A.A.C. R9-22-101 and R9-22-710).
S.B. 1451 appropriates $60,000,000 from the state GF in FY 2027 to AHCCCS.
Provisions
1. Appropriates $60,000,000 from the state GF in FY 2027 to AHCCCS for the purpose of providing a 10 percent reimbursement rate increase for inpatient and outpatient behavioral health services to Medicaid providers.
2. Specifies that the reimbursement rate must be applied as an increase to the provider reimbursement rate and in addition to any existing or previously negotiated reimbursement rates paid by AHCCCS or any contracted Medicaid health plan.
3. Prohibits a contracted Medicaid health plan from offsetting, supplanting or otherwise absorbing the reimbursement rate increase by relying on existing negotiated rates that exceed the AHCCCS fee-for-service reimbursement rates.
4. Requires the full reimbursement rate increase to be passed through to behavioral health providers.
5. Prohibits the reimbursement rate increases from exceeding applicable U.S. Centers for Medicare and Medicaid Services upper payment limits.
6. Stipulates that the appropriated monies:
a) must be used solely for Medicaid behavioral health provider reimbursement rate increases for inpatient and outpatient services; and
b) may not be reallocated, transferred or used to fund other service categories, administrative costs or programmatic purposes.
7. Becomes effective on the general effective date.
Prepared by Senate Research
February 9, 2026
MM/SDR/hk