HB2333 - 572R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 20, chapter 4, article 3, Arizona Revised Statutes, is amended by adding section 20-826.06, to read:

START_STATUTE20-826.06. Prosthetic devices and orthotic devices; coverage; reimbursement rates; annual report

A. A hospital service corporation or medical service corporation that issues, amends, delivers or renews a subscription contract on or after January 1, 2027 shall provide coverage for prosthetic devices and orthotic devices that is at least equivalent to the coverage that is currently provided under Medicare Part B, and the coverage may not be provided under less favorable terms or conditions than any other medical or surgical benefits under the subscription contract.

B. Coverage under a subscription contract for prosthetic devices and orthotic devices shall include all of the following:

1. The purchase, fitting, adjustment, repair and replacement of one or more prosthetic devices or orthotic devices as needed to accomplish both of the following, as applicable:

(a) The replacement of all or part of a missing body part and its adjoining tissues.

(b) The replacement of all of the function of a permanently useless or malfunctioning body part as necessary to allow the subscriber to do all of the following:

(i) Complete activities of daily living or essential job-related activities.

(ii) Perform physical activities, including running, biking, swimming or strength training, to maximize the covered person's whole body health and lower and upper limb function.

(iii) Shower or bathe.

2. All materials and components that are necessary to use the device, including instructions on how to use the device.

3. Habilitative or rehabilitative coverage benefits.

C. A prosthetic device or orthotic device shall be medically necessary as determined by a subscriber's health care provider, and the health care provider shall choose the most appropriate model of prosthetic device or orthotic device that adequately meets the medical needs of the subscriber and that allows the subscriber to perform activities as provided in subsection B, paragraph 1 of this SECTION.

D. A hospital service corporation or medical service corporation shall include in the subscription contract language that describes both a subscriber's rights under this section and any benefit denial letters. If a hospital service corporation or medical service corporation denies coverage for a prosthetic device or orthotic device, the hospital service corporation or medical service corporation shall issue the denial of coverage in writing.

E. This section does not prohibit a hospital service corporation or medical service corporation from imposing cost sharing for prosthetic devices or orthotic devices if the cost sharing is not more restrictive than the cost sharing requirements for inpatient physician or surgical services. prosthetic device and orthotic device coverage may not incur separate cost sharing requirements that are applicable only to coverage for prosthetic devices or orthotic devices.

F. A hospital service corporation or medical service corporation shall ensure that a subscriber has access to medically necessary clinical care and to prosthetic devices and orthotic devices and technology from not less than two distinct prosthetic device and orthotic device providers that are located in this state.

G. If medically necessary covered prosthetic devices and orthotic devices are not available from an in-network provider, a hospital service corporation or medical service corporation shall provide a process to refer a subscriber to an out-of-network provider and shall fully reimburse the out-of-network provider at a mutually agreed on rate, less any applicable cost sharing as determined on an in-network basis.

H. A hospital service corporation or medical service corporation shall provide coverage for the replacement of a covered prosthetic device or orthotic device or for the replacement of any part of the device, as applicable, without regard to CONTINUOUS use or useful lifetime restrictions if an ordering health care provider determines that the device or part of the device needs to be replaced due to any of the following:

1. A change in the physiological condition of the subscriber.

2. An irreparable change in the condition of the device or in a part of the device.

3. The condition of the device or any part of the device requires repairs and the cost of the repairs is more than sixty percent of the cost of a replacement device or of the part that is being replaced.

I. Before a hospital service corporation or medical service corporation replaces a prosthetic device or orthotic device that is less than three years old, the hospital service corporation or medical service corporation may request that the health care provider confirm that the device needs to be replaced.

J. A hospital service corporation or medical service corporation may not:

1. Cancel or change premiums, benefits or conditions under a subscription contract on the basis of a subscriber's actual or perceived disability.

2. Deny prosthetic device or orthotic device benefits to a subscriber with limb loss, limb absence or limb difference if such benefits would otherwise be covered for a person who does not have a disability and who seekS medical or surgical intervention to restore or maintain the ability to perform the same physical activity.

K. On or before January 1, 2028 and each year thereafter, the department shall issue a report that provides guidance on what type of medical care and prosthetic devices and orthotic devices are necessary to restore full physical activity to a subscriber with limb loss, limb difference or mobility impairment. END_STATUTE

Sec. 2. Title 20, chapter 4, article 9, Arizona Revised Statutes, is amended by adding section 20-1057.21, to read:

START_STATUTE20-1057.21. Prosthetic devices and orthotic devices; coverage; reimbursement rates; annual report

A. A health care services organization that issues, amends, delivers or renews an evidence of coverage on or after January 1, 2027 shall provide coverage for prosthetic devices and orthotic devices that is at least equivalent to the coverage that is currently provided under Medicare Part B, and the coverage may not be provided under less favorable terms or conditions than any other medical or surgical benefits under the evidence of coverage.

B. Coverage under an evidence of coverage for prosthetic devices and orthotic devices shall include all of the following:

1. The purchase, fitting, adjustment, repair and replacement of one or more prosthetic devices or orthotic devices as needed to accomplish both of the following, as applicable:

(a) The replacement of all or part of a missing body part and its adjoining tissues.

(b) The replacement of all of the function of a permanently useless or malfunctioning body part as necessary to allow the enrollee to do all of the following:

(i) Complete activities of daily living or essential job-related activities.

(ii) Perform physical activities, including running, biking, swimming or strength training, to maximize the covered person's whole body health and lower and upper limb function.

(iii) Shower or bathe.

2. All materials and components that are necessary to use the device, including instructions on how to use the device.

3. Habilitative or rehabilitative coverage benefits.

C. A prosthetic device or orthotic device shall be medically necessary as determined by an enrollee's health care provider, and the health care provider shall choose the most appropriate model of prosthetic device or orthotic device that adequately meets the medical needs of the enrollee and that allows the enrollee to perform activities as provided in subsection B, paragraph 1 of this SECTION.

D. A health care services organization shall include in the evidence of coverage language that describes both an enrollee's rights under this section and any benefit denial letters. If a health care services organization denies coverage for a prosthetic device or orthotic device, the health care services organization shall issue the denial of coverage in writing.

E. This section does not prohibit a health care services organization from imposing cost sharing for prosthetic devices or orthotic devices if the cost sharing is not more restrictive than the cost sharing requirements for inpatient physician or surgical services. prosthetic device and orthotic device coverage may not incur separate cost sharing requirements that are applicable only to coverage for prosthetic devices or orthotic devices.

F. A health care services organization shall ensure that an enrollee has access to medically necessary clinical care and to prosthetic devices and orthotic devices and technology from not less than two distinct prosthetic device and orthotic device providers that are located in this state.

G. If medically necessary covered prosthetic devices and orthotic devices are not available from an in-network provider, a health care services organization shall provide a process to refer an enrollee to an out-of-network provider and shall fully reimburse the out-of-network provider at a mutually agreed on rate, less any applicable cost sharing as determined on an in-network basis.

H. A health care services organization shall provide coverage for the replacement of a covered prosthetic device or orthotic device or for the replacement of any part of the device, as applicable, without regard to CONTINUOUS use or useful lifetime restrictions if an ordering health care provider determines that the device or part of the device needs to be replaced due to any of the following:

1. A change in the physiological condition of the enrollee.

2. An irreparable change in the condition of the device or in a part of the device.

I. Before a health care services organization replaces a prosthetic device or orthotic device that is less than three years old, the health care services organization may request that the health care provider confirm that the device needs to be replaced.

J. A health care services organization may not:

1. Cancel or change premiums, benefits or conditions under an evidence of coverage on the basis of an enrollee's actual or perceived disability.

2. Deny prosthetic device or orthotic device benefits to an enrollee with limb loss, limb absence or limb difference if such benefits would otherwise be covered for a person who does not have a disability and who seekS medical or surgical intervention to restore or maintain the ability to perform the same physical activity.

K. On or before January 1, 2028 and each year thereafter, the department shall issuer a report that provides guidance on what type of medical care and prosthetic devices and orthotic devices are necessary to restore full physical activity to an enrollee with limb loss, limb difference or mobility impairment. END_STATUTE

Sec. 3. Title 20, chapter 6, article 4, Arizona Revised Statutes, is amended by adding section 20-1342.09, to read:

START_STATUTE20-1342.09. Prosthetic devices and orthotic devices; coverage; reimbursement rates; annual report

A. A disability insurer that issues, amends, delivers or renews a policy on or after January 1, 2027 shall provide coverage for prosthetic devices and orthotic devices that is at least equivalent to the coverage that is currently provided under Medicare Part B, and the coverage may not be provided under less favorable terms or conditions than any other medical or surgical benefits under the policy.

B. Policy coverage for prosthetic devices and orthotic devices shall include all of the following:

1. The purchase, fitting, adjustment, repair and replacement of one or more prosthetic devices or orthotic devices as needed to accomplish both of the following, as applicable:

(a) The replacement of all or part of a missing body part and its adjoining tissues.

(b) The replacement of all of the function of a permanently useless or malfunctioning body part as necessary to allow the insured to do all of the following:

(i) Complete activities of daily living or essential job-related activities.

(ii) Perform physical activities, including running, biking, swimming or strength training, to maximize the covered person's whole body health and lower and upper limb function.

(iii) Shower or bathe.

2. All materials and components that are necessary to use the device, including instructions on how to use the device.

3. Habilitative or rehabilitative coverage benefits.

C. A prosthetic device or orthotic device shall be medically necessary as determined by an insured's health care provider, and the health care provider shall choose the most appropriate model of prosthetic device or orthotic device that adequately meets the medical needs of the insured and that allows the insured to perform activities as provided in subsection B, paragraph 1 of this SECTION.

D. A disability insurer shall include in the policy language that describes both an insured's rights under this section and any benefit denial letters. If a disability insurer denies coverage for a prosthetic device or orthotic device, the disability insurer shall issue the denial of coverage in writing.

E. This section does not prohibit a disability insurer from imposing cost sharing for prosthetic devices or orthotic devices if the cost sharing is not more restrictive than the cost sharing requirements for inpatient physician or surgical services. prosthetic device and orthotic device coverage may not incur separate cost sharing requirements that are applicable only to coverage for prosthetic devices or orthotic devices.

F. A disability insurer shall ensure that an insured has access to medically necessary clinical care and to prosthetic devices and orthotic devices and technology from not less than two distinct prosthetic device and orthotic device providers that are located in this state.

G. If medically necessary covered prosthetic devices and orthotic devices are not available from an in-network provider, a disability insurer shall provide a process to refer an insured to an out-of-network provider and shall fully reimburse the out-of-network provider at a mutually agreed on rate, less any applicable cost sharing as determined on an in-network basis.

H. A disability insurer shall provide coverage for the replacement of a covered prosthetic device or orthotic device or for the replacement of any part of the device, as applicable, without regard to CONTINUOUS use or useful lifetime restrictions if an ordering health care provider determines that the device or part of the device needs to be replaced due to any of the following:

1. A change in the physiological condition of the insured.

2. An irreparable change in the condition of the device or in a part of the device.

I. Before a disability insurer replaces a prosthetic device or orthotic device that is less than three years old, the disability insurer may request that the health care provider confirm that the device needs to be replaced.

J. A disability insurer may not:

1. Cancel or change premiums, benefits or conditions under a policy on the basis of an insured's actual or perceived disability.

2. Deny prosthetic device or orthotic device benefits to an insured with limb loss, limb absence or limb difference if such benefits would otherwise be covered for a person who does not have a disability and who seekS medical or surgical intervention to restore or maintain the ability to perform the same physical activity.

K. On or before January 1, 2028 and each year thereafter, the department shall issue a report that provides guidance on what type of medical care and prosthetic devices and orthotic devices are necessary to restore full physical activity to an insured with limb loss, limb difference or mobility impairment. END_STATUTE

Sec. 4. Title 20, chapter 6, article 5, Arizona Revised Statutes, is amended by adding section 20-1404.07, to read:

START_STATUTE20-1404.07. Prosthetic devices and orthotic devices; coverage; reimbursement rates; annual report

A. A group or blanket disability insurer that issues, amends, delivers or renews a policy on or after January 1, 2027 shall provide coverage for prosthetic devices and orthotic devices that is at least equivalent to the coverage that is currently provided under Medicare Part B, and the coverage may not be provided under less favorable terms or conditions than any other medical or surgical benefits under the policy.

B. Policy coverage for prosthetic devices and orthotic devices shall include all of the following:

1. The purchase, fitting, adjustment, repair and replacement of one or more prosthetic devices or orthotic devices as needed to accomplish both of the following, as applicable:

(a) The replacement of all or part of a missing body part and its adjoining tissues.

(b) The replacement of all of the function of a permanently useless or malfunctioning body part as necessary to allow the insured to do all of the following:

(i) Complete activities of daily living or essential job-related activities.

(ii) Perform physical activities, including running, biking, swimming or strength training, to maximize the covered person's whole body health and lower and upper limb function.

(iii) Shower or bathe.

2. All materials and components that are necessary to use the device, including instructions on how to use the device.

3. Habilitative or rehabilitative coverage benefits.

D. A group or blanket disability insurer shall include in the policy language that describes both an insured's rights under this section and any benefit denial letters. If a group or blanket disability insurer denies coverage for a prosthetic device or orthotic device, the group or blanket disability insurer shall issue the denial of coverage in writing.

E. This section does not prohibit a group or blanket disability insurer from imposing cost sharing for prosthetic devices or orthotic devices if the cost sharing is not more restrictive than the cost sharing requirements for inpatient physician or surgical services. prosthetic device and orthotic device coverage may not incur separate cost sharing requirements that are applicable only to coverage for prosthetic devices or orthotic devices.

F. A group or blanket disability insurer shall ensure that an insured has access to medically necessary clinical care and to prosthetic devices and orthotic devices and technology from not less than two distinct prosthetic device and orthotic device providers that are located in this state.

G. If medically necessary covered prosthetic devices and orthotic devices are not available from an in-network provider, a group or blanket disability insurer shall provide a process to refer an insured to an out-of-network provider and shall fully reimburse the out-of-network provider at a mutually agreed on rate, less any applicable cost sharing as determined on an in-network basis.

H. A group or blanket disability insurer shall provide coverage for the replacement of a covered prosthetic device or orthotic device or for the replacement of any part of the device, as applicable, without regard to CONTINUOUS use or useful lifetime restrictions if an ordering health care provider determines that the device or part of the device needs to be replaced due to any of the following:

1. A change in the physiological condition of the insured.

2. An irreparable change in the condition of the device or in a part of the device.

I. Before a group or blanket disability insurer replaces a prosthetic device or orthotic device that is less than three years old, the group or blanket disability insurer may request that the health care provider confirm that the device needs to be replaced.

J. A group or blanket disability insurer may not:

1. Cancel or change premiums, benefits or conditions under a policy on the basis of an insured's actual or perceived disability.

K. On or before January 1, 2028 and each year thereafter, the department shall issue a report that provides guidance on what type of medical care and prosthetic devices and orthotic devices are necessary to restore full physical activity to an insured with limb loss, limb difference or mobility impairment. END_STATUTE

Sec. 5. Prosthetic devices and orthotic devices; annual reports; delayed repeal

A. On or before January 1, 2028 and each year thereafter through January 1, 2032, the following entities shall submit a report to the department of insurance and financial institutions as follows:

1. A hospital service corporation and medical service corporation shall submit a report that contains both of the following:

(a) The total number of claims that were made for prosthetic devices and orthotic devices as prescribed in section 20-826.06, Arizona Revised Statutes, as added by this act.

(b) The total amount paid for coverage that was provided for prosthetic devices and orthotic devices as prescribed in section 20-826.06, Arizona Revised Statutes, as added by this act.

2. A health care services organization shall submit a report that contains both of the following:

(a) The total number of claims that were made for prosthetic devices and orthotic devices as prescribed in section 20-1057.21, Arizona Revised Statutes, as added by this act.

(b) The total amount paid for coverage that was provided for prosthetic devices and orthotic devices as prescribed in section 20-1057.21, Arizona Revised Statutes, as added by this act.

3. A disability insurer shall submit a report that contains both of the following:

(a) The total number of claims that were made for prosthetic devices and orthotic devices as prescribed in section 20-1342.09, Arizona Revised Statutes, as added by this act.

(b) The total amount paid for coverage that was provided for prosthetic devices and orthotic devices as prescribed in section 20-1342.09, Arizona Revised Statutes, as added by this act.

4. A group or blanket disability insurer shall submit a report that contains both of the following:

(a) The total number of claims that were made for prosthetic devices and orthotic devices as prescribed in section 20-1404.07, Arizona Revised Statutes, as added by this act.

(b) The total amount paid for coverage that was provided for prosthetic devices and orthotic devices as prescribed in section 20-1404.07, Arizona Revised Statutes, as added by this act.

B. On or before January 1, 2028 and each year thereafter through January 1, 2032, the department of insurance and financial institutions shall compile the information provided pursuant to subsection A of this section, shall submit a report to the president of the senate and the speaker of the house of representatives and shall provide a copy of this report to the secretary of state.

C. This section is repealed from and after January 1, 2032.