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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
health care insurance; amendments
Purpose
Makes various changes to health care insurance statutes.
Background
Hospital service corporations, medical service corporations, dental service corporations, optometric service corporations and hospital, medical, dental and optometric service corporations (service corporations) are exempt from Arizona insurance laws, unless expressly provided otherwise in law or in rule (A.R.S. § 20-821). A service corporation must obtain approval from their board of directors to pay over $5,000 to any officer, agent or employee in any single year (A.R.S. § 20-832).
If an insured is assigned to a covered health care provider performing services covered by the contract payment for benefits under a disability insurance contract, a group disability insurance contract or a blanket disability insurance contract, the contract does not prohibit assignment of benefits and the assignment is delivered to the insurer. A payment may be made only to the health care provider to whom the payment has been assigned (A.R.S. § 20-464).
Statute prohibits a person who engages in the business of insurance from restricting or prohibiting, by means of a policy or contract, a licensed health care professional's good faith communication with a patient concerning the patient's health care or medical needs, treatment options, health care risks or benefits. Additionally, a person may not terminate a contract with, or refuse to renew a contract with, a health care professional solely because the health care professional in good faith: 1) advocates in private or in public on behalf of a patient; 2) assists a patient in seeking reconsideration of a decision made by the person to deny coverage for a health care service; or 3) reports a violation of law to an appropriate authority (A.R.S. § 20-118).
A person is exempt from utilization review statutes, if the person: 1) is accredited by the Utilization Review Accreditation Commission, the National Committee for Quality Assurance or any other nationally recognized accreditation process recognized by the Director of the Department of Insurance (DOI); 2) conducts internal utilization review for hospitals, home health agencies, clinics, private offices or other health care facilities or entities, if the review does not result in the approval or denial of payment for hospital or medical services; 3) conducts utilization review activities exclusively for work related injuries and illnesses covered under workers' compensation laws; and 4) conducts utilization review activities exclusively for a self-funded or self-insured employee benefit plan, if the regulation of that plan is preempted by federal law (A.R.S. § 20-2502).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Service Corporations
1. Applies statute relating to assignment of benefits to hospital and medical service corporations.
2. Subjects service corporations to insurance holding company system statutes.
3. Removes the prohibitions on a service corporation from:
a) paying an agent or employee a salary, compensation or emolument in an annual amount of more than $5,000 without approval from their board of directors; and
b) making an agreement regarding salary, compensation or emolument for a 3-year period with any agent or employee.
4. Repeals statute authorizing who a service corporation may enter into contracts with.
Health Care Services Organizations (HCSOs)
5. Requires HCSOs to submit a list of provider contract terminations quarterly, rather than monthly, to DOI.
Accountable Health Care Plans
6. Excludes small employers who obtain a health benefits plan that is subject to and in compliance with federal law from statute regarding accountable health care plan premium rate practices.
7. Removes the definition of basic health benefit plan and repeals statute relating to the basic health benefit plan.
8. Repeals statute that sets threshold requirements for electronic claims submissions and payments and electronic eligibility verifications for accountable health care plans.
Utilization Review
9. Limits the exemption from utilization review statutes for persons who meet certain criteria to only utilization review certification requirements, rather than utilization review certification requirements, standards and violations.
10. Allows a provider or enrollee to appeal a denial of a formulary exception for a federally covered plan through the federally prescribed process.
11. Specifies that health care appeal processes authorized in statute do not apply to a denial of a formulary exception request that is appealed pursuant to federal law.
Miscellaneous
12. Includes service corporations and HCSOs in the applicability of:
a) the prohibition on interfering with communications between health care professionals and patients; and
b) contract termination limitations.
13. Includes, in the definition of COBRA continuation provision, small group health plan continuation coverage.
14. Repeals statute pertaining to insurance contracts and forms in effect prior to January 1, 1955.
15. Makes technical and conforming changes.
16. Becomes effective on the general effective date.
House Action
COM 2/11/20 DPA 7-1-1-0
3rd Read 2/24/20 60-0-0
Prepared by Senate Research
March 9, 2020
MG/AB/gs