House of
Representatives
HB 2789
health and welfare; budget reconciliation
Sponsor: Representative Boone
HB 2789 includes provisions related to the budget for health and welfare. Affected state agencies include the Arizona Health Care Cost Containment System (AHCCCS), the Department of Health Services (DHS), the Department of Administration (DOA), and the Department of Economic Security (DES).
Provisions
Department of Insurance
Small Business Health Insurance Plans (SBHIPs)
· Strikes the definition of small business and replaces it with a definition of uninsured small business which does the following:
· Expands the eligible group size for SBHIPs to fifty employees.
· Clarifies that an employer must not provide health insurance to its employees for at least six months immediately prior to the effective date of coverage under a SBHIP to qualify for a SBHIP, and stipulates that this requirement does not apply upon renewal of coverage.
· Includes a retroactivity date to September 21, 2006.
Arizona Health Care Cost Containment System
Eligibility Redetermination
· Requires the AHCCCS administration to redetermine the eligibility of members twenty-one years of age or older every six months who are also subject to eligibility redetermination for Temporary Assistance for Need Families (TANF) by the DES.
· Stipulates that eligibility redeterminations for the AHCCCS shall begin on the general effective date and occur simultaneously with eligibility redeterminations for TANF.
· States the AHCCCS shall report to the Speaker of the House, the President of the Senate, and the Joint Legislative Budget Committee (JLBC) by February 10, 2008 on the effects through January 2008 of changing the redetermination period.
· Specifies the report shall include the following:
· The number of redetermination letters sent out.
· The number of redetermination interviews conducted.
· The number of redetermination interviews resulting in continued acute care benefits.
Outlier Hospital Reimbursement Rates
· Mandates the inclusion of a mechanism for the payment of claims with extraordinary operating costs per day.
· Requires the outlier cost thresholds to be adjusted annually by the Global Insight Hospital Market Basket Index.
· Stipulates that the AHCCCS shall phase in the use of the most recent Medicare or Medicare-approved hospital specific cost-to-charge ratios to qualify and pay extraordinary operating costs starting October 1, 2007, and completing the implementation by October 1, 2009.
· Exempts the AHCCCS from the rule making process until October 1, 2008 to phase in the new cost-to-charge ratios.
· Indicates cost-to-charge ratios shall be updated annually.
· Excludes routine maternity charges from being eligible for outlier reimbursement.
· Clarifies that if a hospital does not have a hospital specific Medicare cost-to-charge ratio, the AHCCCS administration shall use the most recent statewide urban and rural average Medicare cost-to-charge ratio.
· Requires the AHCCCS to work with impacted stakeholders, including hospitals and health plans, to evaluate whether certain services should be excluded from outlier payments or paid under a different methodology, and shall report its findings to the JLBC by December 31, 2007.
Healthcare Group
· Clarifies that administrative costs incurred by the AHCCCS to operate Healthcare Group includes all costs to support and supervise the work done by private health plans.
Temporary Medical Coverage Program
· Eliminates legislative appropriations from the pool of monies that may comprise the Temporary Medical Coverage Fund.
County Acute Care Contributions
· Specifies the amounts the counties shall contribute for the provision of hospitalization and medical care for FY 2007-08 totaling $51,098,200.
· Indicates that if the counties do not provide the required funds, the State Treasurer will deduct the respective county’s required contribution plus interest from that county’s portion of shared revenues, not to include that county’s portion of Highway User Revenue Fund revenues.
· Stipulates the schedule by which payments shall be made, the funds into which the State Treasurer shall deposit the payments, and the procedure to follow to return or reduce payments if the payments exceed the costs incurred by the AHCCCS.
· States that it is the Legislature’s intent to have the Maricopa County contribution reduced in each subsequent year according to changes in the GDP price deflator.
County Long-term Care Contributions
· Specifies the amounts the counties shall contribute for the provision of long-term care for FY 2007-08 totaling $238,563,200.
Withholding of State Shared Revenues
· Requires that the State Treasurer, at the direction of the Governor, withhold transaction privilege tax (TPT) revenues from counties with a population of at least 1.5 million persons, after withholding for long-term care contributions, an amount totaling $84,652,400.
· Stipulates that the Governor, in consultation with the chairpersons of the House and Senate Committees on Appropriations, may direct the State Treasurer to suspend the additional withholdings of TPT revenues to accommodate a federal policy change.
· Requires the State Treasurer to withhold TPT revenues in specified amounts from each county other than Maricopa, totaling $2,646,200, for the provision of hospitalization and medical care services administered by the AHCCCS.
State Children’s Health Insurance Program (SCHIP) Parental Eligibility
· Allows parents of children enrolled in the AHCCCS or the SCHIP to apply for eligibility in the SCHIP for parents (Kidscare Parents) if their income does not exceed 200% of the federal poverty level.
· Stipulates that eligibility for and continuation of Kidscare Parents is dependent on the continuation of an enhanced federal matching rate for state monies, and that Kidscare Parents will end on expiration of the enhanced federal matching rate.
· Establishes the following guidelines for the AHCCCS to adopt rules to create tiered monthly premiums:
· For households with incomes between 100-150% of the federal poverty guidelines, the premium is equal to 3% of net household income.
· For households with incomes between 150-175% of the federal poverty guidelines, the premium is equal to 4% of net household income.
· For households with incomes between 175-200% of the federal poverty guidelines, the premium is equal to 5% of net household income.
· Clarifies that premiums paid for Kidscare Parents apply to the entire household unit regardless of the number of parents or children participating.
Non-emergency Transportation
· Requires the AHCCCS to report to the JLBC on the estimated costs of emergency transportation and potential cost-saving modifications to non-emergency transportation utilization by December 15, 2007.
Report on Establishing a Risk Pool
· Requires the AHCCCS to report to the JLBC by December 1, 2007 on the feasibility of establishing a risk pool for the uninsured and high risk populations, and specifies some items the report shall include.
Department of Health Services
Regional Behavioral Health Authorities (RBHAs)
· Limits the maximum reimbursement for service provided directly by a RBHA to 30% above the AHCCCS’s fee-for-service rate for the particular service provided.
· Stipulates that behavioral health contractors under contract with the DHS to act as a RBHA may perform only managed care functions.
· Prevents RBHAs and their subsidiaries from delivering behavioral health services directly to their clients, and stipulates that this restriction shall be fully implemented by September 1, 2009.
· Indicates monies appropriated for fiscal year (FY) 2007-08 and after for seriously mentally ill services may not be used for any purposes other than those prescribed by the appropriation.
Competency Restoration Treatment Reimbursement
· Requires counties with a population of 800,000 or more persons and all cities to reimburse the DHS for 86% of the costs the state incurred for defendants’ inpatient competency restoration treatment.
· Specifies where the funds shall be deposited, the time by which they shall be deposited, and that the State Treasurer shall withhold the funds including interest from shared revenues if they are not deposited.
Department of Administration
Special Employee Health Insurance Trust Fund (SEHITF)
· Requires the DOA’s annual report on the financial status of the SEHITF to include any changes to the type of benefits that will be offered under the health insurance benefit program in the upcoming plan year.
· Mandates that the DOA submit a report to the JLBC detailing any changes to the type of benefits offered under the health insurance benefit program and associated costs that were not included in the DOA’s annual report at least forty-five days before making the changes, and requires the report to include the following:
· An estimate of the cost or savings associated with the change.
· An explanation of why the change was implemented before the next plan year.
State Employee Health Insurance Premiums
· Stipulates that the DOA shall not implement a differentiated health insurance premium based on the integrated or nonintegrated status of a health insurance provider available through the state employee health insurance program beginning October 1, 2007.
Health Savings Accounts Pilot Program (HSAPP)
· Requires the DOA to design and implement a HSAPP with a qualifying state-sponsored high deductible health plan in accordance with federal law.
· Stipulates the HSAPP plan shall be submitted to the JLBC for review by November 1, 2007, and not be implemented before that review.
· Mandates the average per person employer cost of the HSAPP must not exceed the current self-insured health insurance program.
· Specifies that the HSAPP plan shall include the following:
· A benefit design, including deductible amounts.
· Premium amounts.
· Employee and employer contribution strategies for premiums and health savings accounts deposits.
· The ability for employees to make pre-tax contributions.
· Options for custodial or trustee arrangements.
· Investment options for account holders.
· Administrative costs.
· Includes a repeal date of September 30, 2012 for the HSAPP.
Department of Economic Security
Child Care Assistance Eligibility
· Limits each family to no more than forty-eight cumulative months of child care assistance.
· Allows the DES to reduce maximum income eligibility levels for child care assistance in order to manage within available monies, and requires the DES to report to the JLBC within fifteen days of implementing such a change.
Miscellaneous
Regenerative Tissue Repository Appropriation
· Appropriates $3 million from the General Fund in each of the FYs from 2007-08 to 2011-12 to the DHS for centralized Arizona repositories of diverse types of human stem cells of nonembryonic origin obtained in Arizona.
· Stipulates that the DHS shall establish a competitive request for proposal process to establish the repositories.
· Exempts the appropriations from lapsing.
Amendment
Appropriations:
· Establishes a new implementation deadline for the phase in of the AHCCCS outlier payment methodology of October 1, 2008.
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· Forty-eighth Legislature
· First Regular Session 2 May 1, 2007
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