ARIZONA STATE SENATE

MICHAEL MADDEN

LEGISLATIVE RESEARCH ANALYST

HEALTH & HUMAN SERVICES COMMITTEE

Telephone: (602) 926-3171

RESEARCH STAFF

TO:                  MEMBERS OF THE SENATE

HEALTH & HUMAN SERVICES COMMITTEE

DATE:            February 16, 2026

SUBJECT:      Strike everything amendment to S.B. 1494, relating to patient steering

Purpose

Prohibits health care providers, health care institutions and drug manufacturers from paying enrollee health insurance premiums or steering enrollees to change plans based on health status and establishes related criminal penalties.

Background

Arizona law prohibits certain patient brokering practices related to sober living homes and substance use disorder treatment facilities. Specifically, a person, including a health care provider, behavioral health professional, health care institution or sober living home, may not offer, pay, solicit or receive any commission, bonus, rebate, kickback or bribe, directly or indirectly, or engage in any split-fee arrangement, in any form whatsoever, in return for: 1) referring patients or clients to or from a sober living home or a substance use disorder treatment facility; or 2) accepting or acknowledging the enrollment of a patient or client for substance use disorder services at a sober living home.

A person who commits unlawful patient brokering as outlined is guilty of: 1) a class 3 felony if the consideration has a value of $1,000 or more; 2) a class 4 felony if the consideration has a value of more than $100 but less than $1,000; or 3) a class 6 felony if the consideration has a value of $100 or less (A.R.S. § 13-3730).

There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Declares it unlawful, unless expressly allowed by federal law, for health care providers, health care institutions or drug manufacturers to:

a) pay, directly or indirectly, health insurance premiums or subscription fees on behalf of a health plan enrollee; or

b) steer, advise, recommend or encourage an enrollee to terminate or change health insurance plans due to any health-status related factor of the enrollee unless the person is a licensed insurance producer.

2. Subjects a person who violates the prohibitions on steering or providing financial incentives relating to health plan enrollment to:

a) a class 3 felony if the consideration has a value of $1,000 or more;

b) a class 4 felony if the consideration has a value of more than $100 but less than $1,000; or

c) a class 6 felony if the consideration has a value of $100 or less.

3. Prohibits life or disability insurance rebates from including direct or indirect payment of an enrollee's health insurance premiums or subscription fees by a health care professional, health care institution or drug manufacturer.

4. Expands the definition of solicit under insurance producer statutes to include, when done in the regular course of business, steering, advising, recommending or encouraging persons with a known health condition to terminate their existing health benefit plan or allow their coverage to lapse and purchase a replacement or alternative plan or policy from an insurer.

5. Defines terms

6. Makes conforming changes.

7. Becomes effective on the general effective date.