Assigned to APPROP &                                                                                                                    AS ENACTED

 

 

 

 

ARIZONA STATE SENATE

Fifty-Third Legislature, Second Regular Session

 

ENACTED

 

AMENDED

FACT SHEET FOR H.B. 2659/S.B. 1526

 

health; budget reconciliation; 2018-2019

 

Purpose

 

Makes statutory and session law changes relating to health and welfare necessary to implement the FY 2019 state budget.

 

Background

 

The Arizona Constitution prohibits substantive law from being included in the general appropriations, capital outlay appropriations and supplemental appropriations bills. However, it is often necessary to make statutory and session law changes to effectuate the budget. Thus, separate bills called budget reconciliation bills (BRBs) are introduced to enact these provisions. Because BRBs contain substantive law changes, the Arizona Constitution provides that they become effective on the general effective date, unless an emergency clause is enacted.

 

H.B. 2659/S.B. 1526 contains the budget reconciliation provisions for changes relating to health and welfare.

 

Provisions

 

Department of Health Services (DHS)

 

Health Services Licensing Fund

 

1.      Directs DHS to deposit the first $300,000 in fees collected from all categories of licensees and registrants of radiation sources and fees collected for certification of radiologic technologists into the state General Fund (GF) each fiscal year.

 

2.      Directs DHS to deposit 90 percent of the remaining monies received from fees collected from all categories of licensees and registrants of radiation sources and fees collected for certification of radiologic technologists into the Health Services Licensing Fund and the remaining 10 percent into the state GF.

 

3.      Eliminates the Radiation Regulatory Fee Fund and the Radiologic Technologist Certification Fund, and transfers any remaining unexpended or unencumbered monies to the Health Services Licensing Fund.

 

4.      Continues to allow the Director of DHS to increase fees in FY 2019 for services provided by the Bureau of Radiation Control (BRC) in FY 2019, and continues to exempt DHS from rulemaking requirements for this purpose until July 1, 2019.

 

5.      States that it is the intent of the Legislature that revenues generated by fees collected for BRC services not exceed $561,000.

 

6.      Directs DHS to deposit fees collected for BRC services into the Health Services Licensing Fund.

 

City, Town and County Reimbursements: Competency Restoration Treatment

 

7.      Continues to require a city, town or county, if Arizona pays the costs of a defendant's inpatient, in-custody competency restoration treatment, to reimburse DHS for 100 percent of the costs for FY 2019, and directs DHS to deposit the reimbursements into the Arizona State Hospital Fund.

 

8.      Requires each city, town or county to make the reimbursements within 30 days after a request by DHS.

 

9.      Requires the Superintendent of the Arizona State Hospital, if a city, town or county does not make the required reimbursements, to notify the Treasurer of the amount owed, and requires the Treasurer to withhold the amount, including any interest, from any transaction privilege tax distributions to the city, town or county.

 

10.  Directs the Treasurer to deposit any withholdings into the Arizona State Hospital Fund.

 

11.  Permits a county to meet the funding requirements using any source of county revenue designated by the county, including funds of any countywide special taxing districts in which the Board of Supervisors serves as the Board of Directors.

 

12.  Excludes county contributions regarding the reimbursement for competency restoration treatments from county expenditure limitations. 

 

Hospital Charge Master Transparency Report

 

13.  Continues to require the Directors of the Arizona Health Care Cost Containment System (AHCCCS) and DHS to submit a joint report, by January 2, 2019, on hospital charge master transparency to the Governor, Legislature and Secretary of State, and requires the report to provide the following information:

a)      a summary of the current charge master reporting process;

b)      a summary of hospital billed charges compared to costs;

c)      examples of how charge master or hospital prices are reported and used in other states; and

d)      recommendations to improve the state’s use of hospital charge master information, including reporting oversight changes.

 

 

Opioid Epidemic Grants Report

 

14.  Requires the Directors of AHCCCS and DHS, by January 1, 2019, to submit a joint report to the JLBC on how grant monies for states to address the opioid epidemic included in the federal Consolidated Appropriations Act will supplement monies appropriated to AHCCCS.

 

Disease Control Research Fund: AIDS Reporting and Surveillance

 

15.  Permits DHS to use monies appropriated to DHS from the Disease Control Research Fund for AIDS reporting and surveillance.

 

Health Services Lottery Monies Fund

 

16.  Allows monies in the Health Services Lottery Monies Fund to be used for purposes specified in the FY 2019 General Appropriations Act.

 

Health Research Account: Alzheimer's Disease Research

 

17.  Permits DHS to use monies appropriated to DHS from the Health Research Account for Alzheimer’s disease research.

 

Arizona Health Care Cost Containment System (AHCCCS)

 

18.  Establishes, beginning July 1, 2018, that the reimbursement level for behavioral health services provided by a behavioral health inpatient facility that is not contracted with a contractor or a Regional Behavioral Health Authority is the capped fee-for-service schedule adopted by AHCCCS multiplied by 90 percent.

 

AHCCCS: Disproportionate Share Hospital (DSH) Payments

 

19.  Establishes the FY 2019 DSH payments as follows:

a)      $113,818,500 for a qualifying non-state-operated public hospital, of which $4,202,300 is distributed to the Maricopa County Special Health Care District (MIHS), and the remaining federal portion is distributed to the state GF;

b)      $28,474,900 for the Arizona State Hospital (ASH), of which the federal portion is distributed into the state GF; and

c)      $884,800 for private qualifying DHS hospitals, which are hospitals that meet the mandatory definition of disproportionate share qualifying hospitals, as defined by the Social Security Act, or those hospitals that are located in Yuma and contain at least 300 beds.

 

20.  Requires MIHS and ASH to each provide a Certified Public Expense (CPE) form for the amount of qualifying DSH expenditures to AHCCCS by May 1, 2019, for MIHS, and March 31, 2019, for ASH.

 

21.  Continues to require AHCCCS to assist MIHS and ASH in determining the amount of qualifying expenditures and maintains reporting requirements and distribution procedures of received federal matching funds in FY 2019.

 

 

22.  Outlines the following requirements once AHCCCS files a claim with the federal government and receives federal financial participation based on the amount certified by MIHS:

a)      if the certification is equal to or less than $113,818,500 and AHCCCS determines that the revised amount is correct, AHCCCS must notify the Governor, the President of the Senate and the Speaker of the House of Representatives, and distribute $4,202,300 to MIHS and deposit the balance of the federal financial participation into the state GF;

b)      if the certification is for an amount less than $113,818,500 and AHCCCS determines that the revised amount is incorrect, AHCCCS must notify the Governor, the President of the Senate and the Speaker of the House of Representatives and must deposit the total amount of the federal financial participation into the state GF; and

c)      if the certification is for an amount greater than $113,818,500, AHCCCS must distribute $4,202,300 to MIHS and $75,254,400 of the federal financial participation to the state GF.

 

23.  Allows AHCCCS to make additional DSH payments to MIHS.

 

24.  Outlines the following requirements once AHCCCS files a claim with the federal government and receives federal financial participation based on the amount certified by ASH:

a)      if the certification is for an amount less than $28,474,900, AHCCCS must notify the Governor, the President of the Senate and the Speaker of the House of Representatives and must distribute the entire amount of federal financial participation to the state GF; and

b)      requires the CPE form to contain both the total amount of qualifying DSH expenditures and the amount limited by the Social Security Act.

 

25.  Stipulates that, after DSH payment distributions are made, the allocation of DSH payments designated by a political subdivision, tribal governments and universities must be made available first to qualifying private hospitals located outside the Phoenix Metropolitan Statistical Area and the Tucson Metropolitan Statistical Area before being made available to qualifying hospitals within those areas.

 

26.  Increases, retroactive to July 1, 2017, the FY 2018 DSH payments established for qualifying non-state operated public hospitals to require a payment of $113,818,500, rather than $108,874,800. Increases the amount of federal financial participation required to be deposited into the state GF from $71,890,300 to $75,345,400.

 

Hospital Loan Residency Fund

 

27.  Eliminates the Hospital Loan Program and the Hospital Loan Residency Fund.

 

Transfer to Counties

 

28.  Continues to require AHCCCS, for FY 2019, to transfer to the counties by December 31, 2019, any portion necessary to comply with the Patient Protection and Affordable Care Act regarding the counties’ proportional share of the state’s contribution.

 

Proposition 204 Administrative Costs

 

29.  Continues to exclude county contributions for Proposition 204 administrative costs from county expenditure limitations.

Risk Contingency Rate Setting

 

30.  Allows AHCCCS to continue risk contingency rate settings for all managed care organizations (MCOs) and funding for all MCO administrative funding levels imposed in contract year 2010‑2011 for the contract year beginning October 1, 2018, and ending September 30, 2019.

 

Demonstration Waiver Participation

 

31.  Continues to allow AHCCCS to participate in any special disability workload 1115 Demonstration Waiver offered by the Centers for Medicare and Medicaid Services, and stipulates the following:

a)      any credits provided by the 1115 Demonstration Waiver process are to be used in the fiscal year when those credits are made available to fund the state share of any medical assistance expenditures that qualify for federal financial participation under the Medicaid program; and

b)      AHCCCS is required to biannually report the receipt of credits to the JLBC.

 

Inpatient Psychiatric Treatment Availability Report

 

32.  Continues to require AHCCCS to report by January 2, 2019, to the Director of the JLBC on the availability of inpatient psychiatric treatment both for adults and for children and adolescents who receive services from the regional behavioral health authorities. The report must include all of the following information separately for adults who are at least 22 years of age and for children and adolescents who are 21 years of age or younger:

a)      the total number of inpatient psychiatric treatment beds available and the occupancy rate for those beds;

b)      expenditures on inpatient psychiatric treatment;

c)      the total number of individuals in Arizona who are sent out of state for inpatient psychiatric care; and

d)      the prevalence of psychiatric boarding or the holding of psychiatric patients in emergency rooms for at least 24 hours before transferring the patient to a psychiatric facility.

 

Legislative Intent

 

33.  States it is the intent of the Legislature for FY 2019 that AHCCCS implement a program within the available appropriation.

 

County Contributions/Payments

 

County Acute Long-Term Care System (ALTCS) Contributions

 

34.  Outlines the following FY 2019 county contributions for ALTCS, totaling $268,554,800:

 

Apache

$644,500

Cochise

$5,288,900

Coconino

$1,935,200

Gila

$2,239,000

Graham

$1,578,400

Greenlee

$49,000

La Paz

$599,500

Maricopa

$170,486,100

Mohave

$8,479,400

Navajo

$2,668,000

Pima

$41,749,300

Pinal

$13,853,200

Santa Cruz

$2,084,400

Yavapai

$8,334,500

Yuma

$8,565,400

 

35.  Directs the Treasurer to collect from the counties the difference between the total contribution and the counties' share of the state's actual contribution, if the overall cost for ALTCS exceeds the amount specified in the General Appropriations Act for FY 2019.

 

36.  Specifies that the counties' share of the state's contribution must comply with any federal maintenance effort requirements.

 

37.  Requires the Director of AHCCCS to notify the Treasurer of the counties' share of the state's contribution and report the amount to the Director of the JLBC.

 

38.  Directs the Treasurer to do the following:

a)      withhold from any other monies payable to a county from whatever state funding source is available, excluding the Arizona Highway User Revenue Fund, an amount necessary to fulfill that county's contribution requirement; and

b)      deposit the withheld amounts and amounts paid by counties in the ALTCS Fund.

 

County Acute Care Contributions

 

39.  Outlines the following FY 2018 County Acute Care contributions, totaling $46,512,900:

 

Apache

$268,800

Cochise

$2,214,800

Coconino

$742,900

Gila

$1,413,200

Graham

$536,200

Greenlee

$190,700

La Paz

$212,100

Maricopa

$18,482,600

Mohave

$1,237,700

Navajo

$310,800

Pima

$14,951,800

Pinal

$2,715,600

Santa Cruz

$482,800

Yavapai

$1,427,800

Yuma

$1,325,100

 

40.  Requires the Treasurer, if a county does not provide the aforementioned funding, to do the following:

a)      subtract the amount owed by the county from any payments required to be made by the Treasurer to the county plus interest on that amount, retroactive to the first day the funding was due; and

b)      if the aforementioned amount withheld is insufficient to meet that county’s funding requirement, withhold from any other monies payable to that county from whatever state funding source is available, excluding the Arizona Highway User Revenue Fund, an amount necessary to fulfill that county’s requirement.

 

41.  Requires payment equal to one-twelfth of the total amount for Acute Care contributions to be made to the Treasurer by the fifth day of each month, and requires the Treasurer, on request from the Director of AHCCCS, to require that up to three months’ payment be made in advance, if necessary.

 

42.  Requires the Treasurer to deposit the amounts paid or withheld into the AHCCCS Fund and the ALTCS Fund.

 

43.  Allows the Director of AHCCCS, if payments made exceed the amount required to meet the costs incurred by AHCCCS for the hospitalization and medical care of eligible persons, to instruct the Treasurer to do either of the following:

a)      reduce remaining payments to be paid by a specified amount; or

b)      provide to the counties specified amounts from the AHCCCS Fund and the ALTCS Fund.

 

44.  States that it is the intent of the Legislature that the Maricopa County Acute Care contribution be reduced in each subsequent year according to the changes in the GDP price deflator.

 

Miscellaneous

 

45.  Makes technical and conforming changes.

 

46.  Becomes effective on the general effective date.

 

Amendments Adopted by Committee of the Whole

 

·         Modifies, retroactive to July 1, 2017, the FY 2018 DSH payments established for qualifying non-state operated public hospitals.

 

House Action                                                              Senate Action

 

APPROP         5/1/18     DP     9-1-0                          APPROP         5/1/18     DP     7-5-0-2
3rd Read          5/3/18              16-13-1                       3rd Read          5/3/18               16-3-1

(H.B. 2659 was substituted for S.B. 1526 on 3rd Read)

 

Signed by the Governor 5/3/18

Chapter 284

 

Prepared by Senate Research

May 8, 2018

CRS/lb