AZ Legislative Update – February 21, 2025
Posted by [email protected] on Feb. 23, 2025 / Subscribe 0
Friday marked the 40th day of the Arizona 57th Legislature, 1st Regular Session and the deadline for bills to be considered in their chamber of origin has officially passed.
Now that we have reached the crossover deadline, bills that have not been heard in their chamber of origin (other than the two appropriations committees next week) are considered dead. However, just because a bill is dead does not mean that an issue is off the table for this session. No issue is ever completely finished until the legislative session has adjourned, sine die.
Committees, other than Appropriations and Rules, will not be meeting this upcoming week as bills make their way over to the opposite chamber.
Moving forward, we can anticipate an increase in the number of strike-everything amendments to be used to either resurrect dead issues or to bring up new items that have not been introduced this session.
The next key legislative deadline is March 28th, the last day for committees to hear bills from the opposite chamber. Any bill that has not cleared the committee process by then is no longer viable in its current form.
Below, please find a few bills that we would like to highlight. Additionally, you will find attached your full tracking list of bills.
We are continuing to engage members and staff on your top legislative priorities. If you have any questions or concerns, please do not hesitate to contact us.
Health Insurance
HB 2109 Forced Organ Harvesting; Insurance Prohibition (Biasiucci): HB 2109 passed out of the House on Thursday, 38-20. The bill proposes several amendments to the Arizona Revised Statutes, specifically targeting health insurance and disability insurance policies regarding human organ transplants. It introduces new sections that allow subscription contracts, evidence of coverage, disability insurance policies, and group or blanket disability insurance policies to limit coverage for organ transplants or post-transplant care if the transplant occurs in the People's Republic of China or Hong Kong, or if the organ was procured from these regions. Importantly, the bill clarifies that it does not require coverage for organ transplants and does not restrict insurers from denying coverage for valid reasons. Additionally, the bill includes a provision that allows the administration, with the approval of the Centers for Medicare and Medicaid Services, to limit coverage for organ transplants under certain conditions similar to those outlined for insurance policies.
HB 2130 Claims; Prior Authorization; Denials; Contact (Bliss): HB 2130 passed out of the House on Tuesday, 60-0. The bill requires a health care insurer that denies a claim or prior authorization for any reason to provide contact information of an individual or department that can provide a detailed explanation and a substantive response to questions about why the claim or prior authorization was denied.
HB 2175 Claims; Prior Authorization; Conduct (Willoughby): HB 2175 passed out of the House on Thursday, 58-0. We are currently working on some additional amendment language. The bill stipulates that artificial intelligence may not be used to deny a claim or prior authorization. It requires a health care provider to review each claim or prior authorization before an insurer can deny a claim or prior authorization. Under the bill, if a health care provider denies a claim or a prior authorization without an individual review, it is an act of unprofessional conduct.
HB 2208 Pharmacists; Pharmacies; Reimbursement Costs; Appeals (Bliss): HB 2208 passed out of the House Health & Human Services Committee on Monday, 9-0. 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. Since HB 2208 is estimated to a sizeable fiscal impact, it has also been assigned to the House Appropriations Committee where it is not expected to receive a hearing.
HB 2332 Postpartum Depression; Treatment; Insurers (Willoughby): HB 2332 will be heard in the House Appropriations Committee on Monday. We understand that there will be a fairly large amendment that will remove the problematic mandate language within the bill. As currently drafted, HB 2332 would require hospital service corporations, medical service corporations, health care services organizations, disability insurers, and group or blanket disability insurers to provide coverage for postpartum depression screening starting January 1, 2026. These entities would also need to ensure adequate reimbursement for health care professionals conducting the screenings and provide broad access to these services in line with evidence-based guidelines. Additionally, the bill prohibits the imposition of step therapy protocols for FDA-approved drugs treating postpartum depression. Furthermore, the bill mandates the development and dissemination of educational materials regarding maternal mental health conditions, including postpartum depression, by the department. Health care institutions and professionals are required to provide these materials to new parents and those showing signs of maternal mental health disorders. The bill also emphasizes the responsibility of primary care physicians and practitioners to offer and conduct screenings for postpartum depression, ensuring that appropriate referrals and treatment options are discussed if necessary.
HB 2693 Genetic Sequencing; Insurance; Prohibition (Biasiucci): HB 2693 passed out of the House on Monday, 39-20. The bill establishes insurance coverage and Arizona Health Care Cost Containment System (AHCCCS) limitations on genetic sequencing. It outlines prohibitions and requirements for health care institutions and research facilities relating to genetic sequencers and software used for genetic sequencing.
HB 2874 Excessive Health Insurance Claims; Notification (Liguori): HB 2874 passed out of the House Appropriations Committee on Wednesday, 17-0. The bill establishes a requirement for health insurers and property casualty insurers to notify DIFI and the applicable certification board if the insurer notices that the number of health care insurance claims filed by the provider for patient services on any given workday that exceeds the number of patients the provider could reasonably be expected to treat on that given workday.
SB 1200 Mandated Health Coverage; JLBC; Analysis (Leach): SB 1200 passed out of the Senate Finance Committee on Monday, 5-2. SB 1200 requires an organization or individual advocating for a legislative proposal that would restrict the form or amount of cost sharing applied to a health plan benefit to report to the Joint Legislative Audit Committee (JLAC) on the social and financial impacts of the cost sharing restriction. The bill modifies the statutorily prescribed social and financial factors for the report.
SB 1291 Health Insurers; Provider; Payment; Claim (Angius): SB 1291 passed out of the Senate Health & Human Services Committee on Wednesday, 6-0. The bill requires health insurers to conclude the provider credentialing process within 60 calendar days and to load the applicant's information into the billing system within 30 days after the health insurer receives a complete credentialing application. It requires, within seven calendar days of receiving a credentialing application, a health insurer to contact the applicant in writing or electronically to acknowledge receipt of the application and inform the applicant whether the application is complete. SB 1291 requires insurers to include a detailed list of all incomplete items in incomplete credentialing application notices. The bill stipulates that, if a credentialing application is incomplete and requires additional information from the applicant, the health insurer must contact the applicant within seven calendar days to acknowledge receipt of the additional information and inform the applicant whether the application is complete. If the time period for processing a credentialing application is tolled while the health insurer waits for additional information, the health insurer must acknowledge, in writing or electronically, receipt of the additional information within seven calendar days. SB 1291 prohibits health insurers from tolling the required application processing time period more than three times. It allows a health insurer to deem an application withdrawn if, after the third toll, the insurer has not received a response from the applicant with additional information within 30 calendar days. It requires health insurers to communicate the withdrawal of an application to the applicant within seven calendar days. Under the bill, credentialing applicants are required to include the email address of an individual who can address discrepancies in the application. The bill allows a provider to receive payment from a health insurer for services provided from the date included on the notice of complete credentialing application to the date the provider's network participation contract is executed. It requires health insurers to process a provider's claim as an in-network claim and pay the claim if the provider:
a) has applied for credentialing and renders a covered service to an individual who is an eligible health plan member on the date of service;
b) renders the service on or after the date that the health insurer notified the provider of a complete credentialing application; and
c) does not submit the claim until after the provider has a fully executed network participation contract with the insurer for the member's health plan network and the insurer has approved the provider's credentials.
The bill prohibits, for claims submitted within one year after the date of service, health insurers from denying a provider's claim that is submitted in compliance with statute on the basis that the claim was not submitted within the contractually required time period. It specifies that health insurers are not required to reimburse an applicant at the in-network rate for any covered medical services provided by the applicant if the applicant's credentialing application is not approved or the health care provider is unwilling to contract with the insurer on mutually acceptable terms. SB 1291 requires, within a reasonable period before a health care provider provides services to a patient in a network facility, the provider or the provider's representative to provide a written, dated disclosure that includes:
a) the name of the billing health care provider;
b) the total estimated cost to be billed by the health care provider or the provider's representative; and
c) a statement that the provider is not credentialed and is not a contract provider.
SB 1291 exempts a health insurer that does not credential a provider from civil liability for any act or omission of the provider in rendering services to a member. If signed into law, it will become effective on April 1, 2026.
Insurance Operations
HB 2210 DIFI; Continuation (Livingston): HB 2210 passed out of the House on Thursday, 47-11. 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 passed out of the House Judiciary Committee on Wednesday, 7-2. 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.
SB 1094 Business; Discrimination Prohibition; Social Criteria (Hoffman): SB 1094 passed out of the Senate on Thursday, 17-12. This problematic bill proposes to amend existing Arizona statutes by adding new sections that prohibit discrimination by financial institutions, insurers, and credit reporting agencies based on political affiliation and various social credit scores. Specifically, it introduces provisions that ensure these entities cannot refuse service or discriminate against individuals based on their political beliefs or scores related to social justice, environmental impact, or governmental criteria. Additionally, the bill allows these institutions to offer products or services that include subjective standards, provided that such standards are fully disclosed to customers prior to contract agreements. Furthermore, the bill emphasizes that the practice of discrimination based on social credit scores is a matter of statewide concern, asserting that it threatens the rights of individuals and the foundational principles of a democratic state. It clarifies that these new regulations do not impede the ability of these institutions to refuse service when necessary for the safety of their employees. If this were to pass, the Governor would likely veto the bill.
SB 1215 Litigation; Financing; Consumer Protection: Enforcement (Leach): SB 1215 passed out of the Senate Regulatory Affairs and Government Efficiency Committee on Wednesday, 4-2. The bill establishes regulations governing the conduct of litigation financiers, including prohibitions against influencing the course of legal actions, receiving excessive proceeds, and engaging in referral fee arrangements. Additionally, it mandates disclosure requirements for legal counsel regarding litigation financing agreements and the parties involved, ensuring transparency in class actions and multidistrict litigation. Furthermore, the bill stipulates that litigation financing agreements entered into in violation of the new regulations will be deemed void, and it outlines the responsibilities of litigation financiers to indemnify funded consumers against adverse costs, except in cases of intentional wrongdoing. The act will apply to all civil actions initiated on or after its effective date, which is set for December 31, 2025. Overall, the bill aims to enhance oversight and accountability in litigation financing practices.
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