Assigned to HEALTH                                                                                                 AS PASSED BY THE SENATE

ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

AMENDED

FACT SHEET FOR H.B. 2719

AHCCCS; nonhospital providers; claims

Purpose

            Requires Arizona Long-Term Care System (ALTCS) program contractors to adjudicate clean claims submitted by specified providers within 30 days and imposes interest on claims that are not paid within the required time frame. 

Background

Statute requires health insurers to adjudicate clean claims with 30 days of receipt of a clean claim and to pay the claims within 30 days of adjudication unless otherwise specified in the insurer’s contract with a provider. These requirements do not apply to ALTCS program contractors.

ALTCS is Arizona’s Medicaid long-term care program and is administered by the Arizona Health Care Cost Containment System Administration (AHCCCS).  ALTCS delivers services in a managed care system through contracted prepaid, capitated arrangements with a network of program contractors.  Program contractors may subcontract with providers such as nursing facilities, assisted living facilities and home and community based providers to provide services to members.

Statute defines AHCCCS and ALTCS “clean claims” as claims that may be processed without obtaining additional information from the subcontracted provider, from a noncontracting provider or from a third party, excluding claims under investigation for fraud or abuse or claims under review for medical necessity.

AHCCCS rule specifies that contractors must pay claims or provide notice of the denial or reduction of claims according to the following time frames, unless a subcontract otherwise specifies:  a) 90 percent of valid clean claims within 30 days of the receipt of the claim; b) 99 percent of valid clean claims within 90 days and c) 100 percent of valid clean claims within one year.  In addition, under the current ALTCS contract specifications, ALTCS program contractors are required to pay late fees equal to 10 percent per year if a claim is not paid within 45 days after its receipt, unless there is a different contract specifying other late payment terms.          H.B. 2719 shortens claim adjudication time frames to 30 days and specifies different interest terms.

There is no anticipated fiscal impact to the state General Fund as a result of this legislation.

Provisions

1. Requires ALTCS program contractors to adjudicate clean claims submitted by licensed skilled nursing facilities, assisted living and home and community based providers that provide services to ALTCS members within 30 days of receipt by the program contractor. 

2. Imposes interest at a rate of one percent per month, prorated on a daily basis, for clean claims not paid within 30 calendar days; requires the interest to be paid when the clean claim is paid.

3. Becomes effective on the general effective date.

Amendments Adopted by Committee

1. Requires claims to be adjudicated, rather than paid, within 30 days.

2. Makes clarifying changes.

Amendments Adopted by Committee of the Whole

· Clarifies that the claims on which the interest is imposed are claims for services provided to an ALTCS member.

House Action Senate Action

HEALTH        2/15/06     DPA     5-0-0-4                  HEALTH        3/20/06    DPA     7-0-0

3^rd Read           3/8/06                    53-0-7                    3rd Read         4/11/06                 27-1-2-0

Prepared by Senate Research

April 12, 2006

BKL/ac