AZ Legislative Update – February 14, 2025
Posted by [email protected] on Feb. 18, 2025 / Subscribe 0
As of Friday, February 14th, it marks the 33rd day of the Arizona 57th Legislature, 1st Regular Session. As anticipated, legislative activity at the Capitol considerably picked up with it being the final week for members to introduce new bills, without special permission from the House Speaker or Senate President. As it currently stands, there are 1,677 bills and 124 resolutions posted.
Throughout the week, committee agendas were rather lengthy, and both the House and Senate spent a significant time on the floor debating and voting on bills. Members will have another busy week ahead of them as we enter the final week for bills to be heard in their chamber of origin. Any bill that has not cleared its assigned legislative committee by the end of this week (outside an additional week for the appropriations committees) will essentially be dead in its current form. However, with amendments and striker-everything amendments, no issue is ever truly finished until session is over, sine die.
Below, please find a few bills that we would like to highlight. Some of them are up in committee this week.
Happy Valentine’s Day and Arizona Statehood Day (113 years old)!
Health Insurance
HB 2125 Insurance Coverage; Hearing Aids; Children (Willoughby): HB 2125 passed out of the House Health & Human Services Committee on Thursday afternoon, 11-1. The bill requires HMOs to provide full coverage for hearing aids and related services for enrollees under the age of 18, or under 21 if still attending high school. It allows organizations to offer additional coverage options beyond the mandated services. The coverage would include fitting and dispensing services, ear molds, and any related services provided by licensed health care providers, while excluding certain types of limited coverage. Additionally, the bill specifies that coverage for hearing aids may be subject to deductibles and coinsurance similar to other benefits. It defines "hearing aid" and "licensed health care provider," and clarifies that the new requirements will apply to evidences of coverage issued on or after December 31, 2025.
HB 2208 Pharmacists; Pharmacies; Reimbursement Costs; Appeals (Bliss): HB 2208 is scheduled to be heard in the House Health & Human Services Committee on Monday. The bill establishes additional regulations for pharmacy benefit managers (PBMs) regarding reimbursement practices for pharmacists and pharmacies. Under the new law, PBMs would be prohibited from reimbursing pharmacists or pharmacies for prescription drugs or devices at amounts lower than the actual costs incurred. Additionally, the bill outlines specific requirements for PBMs, including the obligation to pay a professional dispensing fee based on the fee-for-service methodology used in the state medical assistance plan, and to provide a clear appeals process for pharmacists or pharmacies disputing reimbursement rates. The bill also includes provisions for the timely adjustment of reimbursement costs if a pharmacist or pharmacy prevails in an appeal, as well as requirements for PBMs to provide information about pharmaceutical wholesalers when they prevail in an appeal. Furthermore, the new section clarifies that these regulations do not apply to certain health insurance coverage procured by the Department of Administration. The provisions of this bill would apply to contracts entered into, amended, extended, or renewed after December 31, 2025. HB 2208 is estimated to have roughly a $100M impact to the state budget. It has also been assigned to the House Appropriations Committee where it is not expected to receive a hearing.
SB 1102 Pharmacy Benefits; Prescribing; Exemption (Shamp): SB passed out of the Senate on Tuesday, 26-0. The bill prohibits a pharmacy benefit manager from limiting or excluding coverage of a prescription drug for any covered individual who is on a specific prescription drug and outlined conditions are met. The bill prescribes formulary change notification requirements and establishes a formulary prescription drug exception process.
HB 2874 Excessive Health Insurance Claims; Notification (Liguori): HB 2874 will be heard on Wednesday in the House Appropriations Committee. The bill establishes a requirement for health insurers to monitor and report unusual trends in health care insurance claims. Specifically, if a health insurer observes that the number of claims filed by a health care provider on a given workday exceeds the number of patients that provider could reasonably treat, the insurer must notify the relevant department and the licensing board for that provider. The bill also defines key terms related to the new reporting requirement, including "health care provider" as a licensed, registered, or certified professional under title 32, and "health insurer" as various types of disability and health care service organizations.
SB 1200 Mandated Health Coverage; JLBC; Analysis (Leach): SB 1200 will be heard in the Senate Finance Committee on Monday. SB 1200 introduces new language that requires organizations or individuals advocating for health coverage mandates or cost-sharing restrictions to submit a report assessing the social and financial impacts of such proposals. The report must now include an evaluation of the effectiveness of the proposed treatment or service, as well as the impact on other policyholders who do not utilize the mandated coverage. Additionally, it mandates an analysis by the joint legislative budget committee if the report is not completed, focusing on the financial implications for state employee health coverage. Furthermore, the bill removes certain phrases from the existing law, streamlining the requirements for the report. It eliminates the need to assess the effectiveness of the treatment or service as a separate factor, instead integrating it into the overall evaluation. The bill also emphasizes the necessity for the joint legislative budget committee's analysis to be publicly available and prohibits scheduling a rules hearing for any legislative proposal until this analysis is complete. Overall, these changes aim to enhance the scrutiny of health coverage mandates and their financial implications on state health plans.
SB 1291 Health Insurers; Provider; Payment; Claim (Angius): SB 1291 was held this week; however, it will be heard in the Senate Health & Human Services Committee on Wednesday. The bill would amend several sections of the Arizona Revised Statutes related to provider credentialing. Key updates include the introduction of a definition for "Complete credentialing application," which specifies that it encompasses the submission of a health plan's credentialing application along with supporting documents. Additionally, the bill modifies the definitions of "Credentialing," "Designee," and "Health insurer," removing references to "its designee" in the context of credentialing and recredentialing processes. The term "Recredential" is also updated to clarify that it involves confirming a provider's good standing without requiring a new application or contracting process. Furthermore, the bill establishes new timelines for health insurers regarding the credentialing process. It mandates that insurers must conclude the credentialing and loading process within 145 calendar days of receiving a complete credentialing application. It also requires health insurers to provide written or electronic confirmation of receipt of applications within two business days and to notify applicants of any deficiencies within seven business days. Importantly, the bill stipulates that health insurers must retroactively approve a participating provider's credentialing application to the date of the complete application, ensuring that claims for covered services provided by credentialed providers are paid accordingly.
SB 1626 Health Insurance; Surprise Billing; Disputes (Werner): SB 1626 passed out of the Senate Health & Human Services Committee on Wednesday, 7-0. The bill specifies that requirements and procedures related to providing notice to an enrollee of the enrollee's statutory right to dispute surprise out of network medical bills, only applies to claims that are not subject to an independent dispute resolution under the federal No Suprises Act.
SB 1720 Clozapine; Access; Treatment Protocols (Kuby): SB 1720 will be heard on Wednesday in the Senate Health & Human Services Committee; however, there will be no formal vote taken on the bill. SB 1720 requires health insurers to provide comprehensive reimbursement for various treatment services unique to clozapine users. These services include enhanced psychiatric examination reimbursements, medical weight management, specialty interventions, and access to less-invasive hematological monitoring methods. Additionally, the bill requires health insurers to proactively identify underutilization of clozapine among providers and to offer specialized training on clozapine treatment. Furthermore, the bill outlines specific requirements for the administration and its contractors regarding the treatment of members with serious mental illness or emotional disturbances. It mandates in-home monitoring services, medication delivery options, and support services for medication adherence. The bill also emphasizes the need for inpatient behavioral health facilities to maintain clozapine in stock and ensures that inmates prescribed clozapine have access to necessary treatment protocols.
Insurance Operations
HB 2193 Captive Insurers; Certificate of Dormancy (Livingston): HB 2193 passed out of the House on Thursday, 51-2. The bill proposes several updates to the Arizona Revised Statutes concerning captive insurers. It introduces a new definition for "dormant captive insurer," which refers to a captive insurer that has ceased transacting insurance business and has no outstanding liabilities. The bill also establishes a process for dormant captive insurers to apply for a certificate of dormancy, which must be renewed every five years. Additionally, it sets forth requirements for maintaining capital and surplus, submitting annual financial reports, and the conditions under which a certificate of dormancy may be revoked or surrendered. Furthermore, the bill modifies existing definitions and requirements related to captive insurers, including changes to the terminology used for certain entities, such as "board of managers" instead of "board of directors" for limited liability companies. It also reduces the minimum capital requirement for protected cell captive insurers from $500,000 to $250,000 and specifies that at least one member of the board of managers for limited liability companies must be a resident of Arizona. Overall, these updates aim to streamline the regulatory framework for captive insurers and enhance compliance measures.
HB 2210 DIFI; Continuation (Livingston): HB 2210 passed out of the House Commerce Committee on Tuesday, 10-0. The bill continues the Department of Insurance and Financial Institutions for an additional 8 years.
HB 2228 Jurors; Peremptory Challenge; Civil Action (Hendrix): HB 2228 will be heard in the House Judiciary Committee on Wednesday morning. The bill restores peremptory challenges for civil cases in Arizona. The bill stipulates that each party is entitled to four peremptory challenges. Beginning with the plaintiff, each party shall alternate striking jurors until all the challenges are used or waved. Under HB 2228, the court may allow a party additional peremptory challenges if two or more parties on the same side have adverse or hostile interests. If the court allows a party an additional peremptory challenge, the court shall allow an equal number of peremptory challenges to the party or parties on the other side.
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