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ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
AMENDED
health care; 2024-2025.
Purpose
Makes statutory and session law changes relating to health care necessary to implement the FY 2025 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.
S.B. 1741 contains the budget reconciliation provisions for changes relating to health care.
Provisions
Arizona Health Care Cost Containment System (AHCCCS)
1. Requires AHCCCS, by December 1 of each year, to report the amount of unexpended monies in the Arizona Long-Term Care System (ALTCS) Fund remaining from the previous fiscal year to the State Treasurer, Joint Legislative Budget Committee (JLBC) and the Governor's Office of Strategic Planning and Budgeting (OSPB).
2. Requires the AHCCCS report on excess ALTCS Fund monies to include the calculations used to compute the total amount of the surplus and the apportionment of the surplus between each county and the state.
3. Allows AHCCCS, in FY 2025 and FY 2026, to use the hospital assessment to fund a portion of the nonfederal share of the costs of behavioral health services that are not covered by the Proposition 204 Protection Account and the Tobacco Litigation Settlement Fund, or any other monies appropriated to cover these costs, for all of the following:
a) eligible persons whose household's modified adjusted gross income is between 100 and 130 percent of federal poverty guidelines;
b) persons who do not meet the eligibility standards described in the state plan or the Section 1115 waiver that was in effect immediately before November 27, 2000, but who meet the eligibility standards described in the state plan effective as of October 1, 2001; and
c) eligible persons who do not meet the general eligibility criteria or the state plan in effect as of January 1, 2013.
4. Exempts AHCCCS from rulemaking requirements for two years for purposes of implementing the hospital assessment, effective retroactive to July 1, 2024.
5. Requires AHCCCS to provide notice and an opportunity for public comment at least 30 days before establishing or implementing the administration of the hospital assessment.
6. Repeals the ability for AHCCCS to use the hospital assessment to fund behavioral health services on July 1, 2026.
7. Requires AHCCCS, by January 31, 2025, to prepare and issue an annual report regarding the costs, aggregate spending on and aggregate utilization of mental health medications, including antipsychotics, antidepressants, anxiolytics, stimulants and sedative hypnotics, during contract years 2020 through 2023.
8. Requires the AHCCCS report on the costs and utilization of mental health medications to be submitted to the:
a) Governor;
b) chairpersons of the Health and Human Services Committees of the Senate and House of Representatives, or their successor committees;
c) Director of JLBC;
d) Director of OSPB; and
e) Secretary of State.
a) aggregate gross amount spent for each mental health medication class;
b) annual aggregate net amount spent for each mental health medication class after rebates, without disclosing any information about manufacturer-negotiated supplemental rebate agreements for any specific drug; and
c) average annual cost by class for generic and nongeneric mental health medications.
10. Requires the AHCCCS report on the costs and utilization of mental health medications, for antipsychotic and antidepressant medications, without disclosing any information about manufacturer-negotiated supplemental rebate agreements that could compromise the competitive or proprietary nature of the agreements, to include the:
a) total number of prior authorizations submitted for nonpreferred antipsychotic and antidepressant medications;
b) percentage of prior authorization approvals and denials;
c) generic antipsychotic and antidepressant medication utilization percentages; and
d) total amount of antipsychotic and antidepressant medication claims.
11. Continues to require AHCCCS to transfer to the counties any excess monies necessary to comply with the federal Patient Protection and Affordable Care Act, regarding the counties' proportional share of the state's contribution.
12. Declares the Legislature's intent that AHCCCS implement a Medicaid program within the available appropriation for FY 2025.
13. Continues to allow AHCCCS, for the contract year beginning October 1, 2024, and ending on September 30, 2025, to extend risk contingency rate settings for all managed care organizations (MCOs) and funding for all MCO administrative funding levels imposed for the contract year beginning October 1, 2010, and ending September 30, 2011.
Collaborative Care Uptake Fund
14. Allows monies in the Collaborative Care Uptake Fund to be used beyond FY 2024 until June 30, 2025.
15. Exempts monies in the Collaborative Care Uptake Fund from lapsing.
16. Repeals the Collaborative Care Uptake Fund on July 1, 2025, and directs any remaining unexpended and unencumbered monies in the Collaborative Care Uptake Fund to be transferred to the state General Fund (state GF).
ALTCS
17. Outlines the following FY 2025 county contributions for ALTCS:
|
County |
Contribution Amount |
|
Apache |
$975,000 |
|
Cochise |
$973,400 |
|
Coconino |
$2,928,200 |
|
Gila |
$3,161,900 |
|
Graham |
$1,596,200 |
|
Greenlee |
$43,400 |
|
La Paz |
$990,200 |
|
Maricopa |
$269,359,200 |
|
Mohave |
$11,389,600 |
|
Navajo |
$4,037,000 |
|
Pima |
$62,975,600 |
|
Pinal |
$16,370,500 |
|
Santa Cruz |
$2,880,000 |
|
Yavapai |
$9,862,900 |
|
Yuma |
$12,328,500 |
18. Directs the State 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 FY 2025 General Appropriations Act.
19. Requires the counties' share of the state's contribution to comply with any federal maintenance of effort requirements.
20. Requires the Director of AHCCCS to notify the State Treasurer of the counties' share of the state's contribution and report the amount to the Director of JLBC.
21. Directs the State Treasurer to:
a) withhold from any other monies payable to a county from any available state funding source, excluding the Highway User Revenue Fund (HURF), an amount necessary to fulfill that county's contribution requirement; and
b) deposit the withheld amounts and amounts paid by counties into the ALTCS Fund.
County Acute Care
22. Outlines the following FY 2025 county acute care contributions:
|
County |
Contribution Amount |
|
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 |
$15,145,900 |
|
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 |
23. Requires the State Treasurer, if a county does not provide funding as specified, to:
a) subtract the amount owed by the county from any payments required to be made by the State Treasurer to the county plus interest on that amount, retroactive to the first day the funding was due; and
b) if the amount withheld is insufficient to meet that county’s funding requirement, withhold from any other monies payable to that county from any available state funding source, excluding HURF, an amount necessary to fulfill that county’s requirement.
24. Requires payments equal to one twelfth of the total amount for county acute care contributions to be made to the State Treasurer by the fifth day of each month and requires the State Treasurer, on request from the Director of AHCCCS, to require that up to three months' payment be made in advance, if necessary.
25. Requires the State Treasurer to deposit the amounts paid and withheld into the AHCCCS Fund and the ALTCS Fund.
26. 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 State Treasurer to:
a) reduce the 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.
27. Declares the Legislature's intent that Maricopa County acute care contributions be reduced in each subsequent year according to the changes in the Gross Domestic Product price deflator.
Disproportionate Share Hospital (DSH) Payments
28. Establishes the FY 2025 DSH payments as follows:
a) $113,818,500 for a qualifying nonstate-operated public hospital, of which $4,202,300 is distributed to the Maricopa County Special Health Care District (District) and the remaining federal portion is deposited in the state GF;
b) $28,474,900 for the Arizona State Hospital (ASH), of which the federal portion is deposited in the state GF; and
c) $884,800 for private qualifying DSHs, which are hospitals that meet the mandatory definition of qualifying DSHs as defined by the federal Social Security Act (SSA), or DSHs that are located in Yuma County and contain at least 300 beds.
29. Outlines the following requirements once AHCCCS files a claim with the federal government and receives federal financial participation based on the amount certified by the District:
a) if the certification is $113,818,500 or less 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 and distribute $4,202,300 to the District and deposit the balance of the federal financial participation in 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 and must deposit the total amount of the federal financial participation in the state GF; or
c) if the certification is for an amount greater than $113,818,500, AHCCCS must distribute $4,202,300 to the District and deposit $71,248,000 of the federal financial participation in the state GF.
30. Allows AHCCCS to make additional DSH payments to the District.
31. 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 and must deposit the entire amount of federal financial participation in the state GF; and
b) requires the certified public expense (CPE) form to contain both the total amount of qualifying DSH expenditures and the amount limited by the SSA.
32. Stipulates that, after DSH payment distributions are made, the allocation of DSH payments designated to political subdivisions, tribal governments and universities must be provided in the following order of priority to qualifying private hospitals located:
a) in a county with a population of fewer than 400,000 persons;
b) in a county with a population of at least 400,000 but fewer than 900,000 persons; and
c) in a county with a population of 900,000 persons or more.
33. Requires the District, by May 1, 2025, and ASH, by March 31, 2025, to each provide a CPE form for qualifying DSH expenditures to AHCCCS.
34. Continues to require AHCCCS to assist the District and ASH in determining the amount of qualifying DSH expenditures.
Miscellaneous
35. Continues to exclude county contributions for Proposition 204 administrative costs from county expenditure limitations.
36. Continues to exclude county contributions related to the costs of inpatient, in-custody competency restoration treatment from county expenditure limitations.
37. Makes technical changes.
38. Becomes effective on the general effective date.
Amendments Adopted by Committee
1. Extends the Department of Health Services rulemaking exemption for implementation of the hospital assessment from one to two years and applies it retroactively to July 1, 2024.
2. Requires the mental health medication cost and utilization report, submitted by AHCCCS, to include the aggregate:
a) spending on and utilization of mental health medications; and
b) gross and net amount spent by the State for each mental health medication class after rebates.
3. Specifies that information contained in the mental health medication utilization report must be submitted without disclosing any information, for any specific drug, relating to manufacturer-negotiated supplemental rebate agreements that could compromise the competitive or proprietary nature of the agreements.
Senate Action
APPROP 6/13/24 DP 6-5-0
Prepared by Senate Research
June 15, 2024
MM/cs