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AZ Legislative Update – April 18, 2025

Posted by [email protected] on Apr. 21, 2025  /  Subscribe 0

This Tuesday will be the 100^th day of the Arizona 57^th Legislature, 1^st Regular Session.  The rules of the Legislature require that both legislative chambers adjourn, sine die, by the end of next week, unless leadership extends the deadline (which they have).  Leadership can only extend the legislative session for no more than 7 days; thereafter any further extensions require a majority vote in each chamber.  This is a very common practice since most sessions typically go well beyond the 100-day period.

Of the 1,679 bills introduced this year, the Legislature has now passed 144 bills with Governor Hobbs signing 54 and vetoing 19. 

On Thursday morning, Governor Hobbs issued a bill moratorium on all bills that come to her desk until a bipartisan deal is reached on a supplemental appropriation to fund services for people with developmental disabilities. There is currently a budget shortfall for programs that help people with developmental disabilities, and funding is expected to run dry in the coming weeks if the Governor and Legislature cannot reach an agreement. 

Hobbs is pushing for a clean appropriation of $122 million for the Department of Economic Services' Development Disabilities Division (DDD). The DDD serves about 60,000 people with developmental disabilities, and without a funding boost, some could go without care for months before the next fiscal year begins July 1. 

In addition to the DDD funding issue, the Governor and legislative leadership continue to have discussions on the FY 2026 budget, various other supplemental appropriations, and an extension of Prop. 123 to fund K-12 education; however, there has been no real significant progress made over the last few weeks. As each week passes and tensions grow, it is looking more and more likely that session will spill over into June. That being said, the process remains rather fluid, and things can evolve quickly. 

In the meantime, below, please find a few bills that we would like to highlight. 

Health Insurance 

HB 2109 Forced Organ Harvesting; Insurance; Prohibition (Biasiucci): HB 2109 passed out of the Senate Committee of the Whole on Thursday and will be 3^rd Read on Monday.  The bill allows insurers and the Arizona Health Care Cost Containment System to limit coverage for human organ transplants or post-transplant care if the transplant operation is performed in, or the human organ to be transplanted was procured by a sale or donation originating in the People's Republic of China or the Hong Kong Special Administrative Region.

HB 2175 Claims; Prior Authorization; Conduct (Willoughby): HB 2175 passed out of the Senate Committee of the Whole on Thursday and will be 3^rd Read on Monday.  The bill adds new requirements for health care insurers regarding the denial of claims and prior authorizations. Specifically, it stipulates that before a health care insurer may deny a claim or prior authorization, submitted by a provider, on the basis and involving medical necessity, the medical director shall individually review the denial.  During each review, the medical director shall exercise independent medical judgement and may not rely solely on recommendations from any other source.

HB 2332 Postpartum Depression; Education Materials (Willoughby): HB 2332 passed out of the Senate Committee of the Whole on Thursday and will be 3^rd Read on Monday.  The bill requires the Department of Health Services to compile relevant educational materials and information regarding maternal mental health conditions, including postpartum depression, for use by health care institutions, health care professionals and patients and to establish an Advisory Committee on Obstetrics, Gynecology and Maternal Mental Health in Rural Communities.

HB 2693 Genetic Sequencing; Insurance; Prohibition (Biasiucci): HB 2693 passed out of the Senate on Wednesday, 16-14.  The bill allows an insurer and the Arizona Health Care Cost Containment System (AHCCCS) to limit coverage for genetic sequencing if the company or operation is associated with a foreign adversary. Establishes prohibitions and requirements for health care institutions and research facilities relating to genetic sequencers and software used for genetic sequencing.

SB 1291 Health Insurers; Provider Credentialing Claims (Angius): SB 1291 passed out of the House on Monday, 54-0 and is now awaiting final action in the Senate.  The bill requires a health insurer to conclude the provider credentialing process within 60 calendar days and load the applicant's information into the insurer's billing system within 30 calendar days, rather than 100 calendar days, upon receipt of a complete credentialing application. The bill requires a health insurer, within seven calendar days of receiving a credentialing application, to contact the applicant in writing or electronically to acknowledge receipt of the application and inform the applicant whether the application is a complete credentialing application. SB 1291 requires credentialing applicants to include the email address of an individual who can address discrepancies in the application. The bill specifies that a health insurer must include a detailed list of all incomplete items in its incomplete credentialing application notices. SB 1291 specifies 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 submitted additional information and inform the applicant whether the application is complete. The bill requires health insurers to communicate the withdrawal of an application to the applicant within 7 calendar days, if the insurer has not received any response from the applicant providing the requested information within 30 calendar days. The bill specifies that, 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 forbids health insurers from tolling the required application processing time period more than three times. The bill permits 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. The bill permits 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 permits a provider to receive payment from a health insurer for services provided from the date included on the notice of a complete credentialing application to the date the provider's network participation contract is executed. The bill directs a health insurer to process a provider's claim as an in-network claim and pay the claim if the provider:

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