 |
ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
behavioral health; contracts; network adequacy
Purpose
Requires managed care organizations (MCOs) contracted with the Arizona Health Care Cost Containment System (AHCCCS), including Arizona Long Term Care System (ALTCS) program contractors and regional behavioral health authorities (RBHAs), to provide written notice to AHCCCS at least 90 days before terminating a high-volume service provider's contract without cause and prohibits termination unless AHCCS determines network adequacy standards will continue to be met. Establishes requirements relating to network adequacy studies and AHCCCS review.
Background
Managed care is a health care delivery system used by states to administer Medicaid programs in a manner that controls costs, manages utilization and ensures quality of care. Under a managed care model, states enter into contracts with private and non-profit MCOs who accept a set per member, per month payment for covered and establish provider networks to meet member needs. States may draw down federal funding for a managed care model, but must be able to continually demonstrate adequate access to care and compliance with all other federal rules and statutory requirements (AHCCCS; Medicaid).
AHCCCS administers Arizona's Medicaid program and delivers covered services primarily through contracts with health plans and other providers. The Director of AHCCCS may enter into contracts necessary to administer the program, including prepaid capitated arrangements for the provision of covered services to enrolled populations (A.R.S. §§ 36-2906 and 36-2907).
An RBHA is an organization under contract with AHCCCS to coordinate the delivery of mental health services in a geographically specific service area of Arizona for eligible persons. A service provider is an organization or mental health professional that meets the criteria established by AHCCCS and has a contract with AHCCCS or an RBHA (A.R.S. § 36-3401).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires AHCCCS-contracted MCOs, including ALTCS program contractors and RBHAs, to submit written notice to AHCCCS at least 90 days before terminating a high-volume service provider's contract without cause.
2. Requires the prescribed notice to AHCCCS to include:
a) documentation showing that the service provider is a high-volume service provider, including the specific data sources, calculation methodology and metrics used;
b) a network adequacy study performed by the MCO that evaluates and documents outlined criteria, as outlined;
c) the MCO's preliminary assessment of the impact of the termination on network adequacy; and
d) any mitigation measures the MCO is proposing.
3. Requires a network adequacy study performed by an MCO to evaluate and document, at a minimum:
a) current and projected post-termination service provider-to-enrollee ratios by service provider type and geographic service area;
b) current appointment wait time performance for the affected services;
c) the patient volume and geographic distribution of the affected services;
d) the impact on members who are receiving behavioral health services associated with the member's disability;
e) the cumulative effect of all pending or recently completed without-cause terminations of high-volume service providers by the MCO; and
f) any additional factors that the MCO or AHCCCS identifies as relevant to network adequacy.
4. Requires, if there is a discrepancy between the MCO and the service provider of whether the service provider is a high-volume service provider, the MCO to notify AHCCCS, provide documentation supporting the MCO's decision not to file the prescribed written notice and notify the service provider of the decision.
5.
Prohibits an MCO from terminating a high-volume service provider without
cause until AHCCCS has reviewed the prescribed adequacy study and provided
written confirmation that applicable network adequacy standards will continue
to be met after the termination of the
high-volume service provider.
6. Requires AHCCCS to complete the review of the network adequacy study within 10 business days after receiving the notice of termination.
7. Requires AHCCCS, if it agrees with the MCO's decision based on the findings provided, to:
a) post the MCO's complete network adequacy study, including methodology, data sources, metrics and findings, and AHCCCS's determination on its public website and send a copy to the chairpersons of the Senate and House of Representatives (House) Health and Human Services Committees, or their successor committees, and the Governor's office; and
b) provide written notice of its determination to the MCO.
8. Prohibits an MCO from terminating a high-volume service provider if AHCCCS determines that network adequacy standards would not be met, unless the MCO demonstrates to AHCCCS's satisfaction that network adequacy standards will be met.
9. Requires an MCO that declines to contract with a service provider or potential service provider due to a determination of network adequacy to complete and send to AHCCCS a network adequacy study, including the specific data sources, calculation methodology, metrics used to support the denial decision and, at a minimum:
a) service provider-to-enrollee ratios by service provider type;
b) current appointment wait time performance for the services that the applicant was to provide;
c) all pending or recently completed terminations of high-volume service providers without cause in the geographic area that the applicant would have served; and
d) any additional factors that the MCO or AHCCCS identifies as relevant to network adequacy.
10. Requires AHCCCS to post on its public website any network adequacy study completed by an MCO that declines to contract with a service provider and send a copy to the chairpersons of the Senate and House Health and Human Services Committees, or their successor committees, and the Governor's office.
11. Defines a high-volume service provider as a service provider that:
a) delivered at least 10 percent of any specific service for an MCO in the preceding state fiscal year; or
b) employs more than 10 percent of the actively licensed behavioral health providers in Arizona.
12. Defines MCO as a contractor that has a prepaid capitated contract with AHCCCS or a RBHA.
13. Defines service provider.
Prepared by Senate Research
February 16, 2026
MM/SDR/hk