AZ Legislative Update – March 27, 2026
Posted by [email protected] on Mar. 27, 2026 / Subscribe 0
Today marks the 75th day of the Arizona 57th Legislature, 2nd Regular Session. The deadline for bills to be heard in policy committees has now passed. With the exception of measures that may still be considered in House and Senate Appropriations Committees next week, all bills that have not been heard are effectively dead for the session.
As the Legislature transitions into the final phase, activity outside of the budget will largely occur on the floor or through conference committees. Of the 1,966 bills introduced this session, 24 have been passed by the Legislature. To date, the Governor has signed 5 bills and vetoed 15 (4 bills are still awaiting action).
Budget Update
Budget negotiations between the Legislature and the Governor’s Office remain at a standstill, largely due to ongoing disagreements over K-12 education funding, most notably, the reauthorization and potential expansion of Proposition 123.
Proposition 123, originally approved by voters in 2016, established a dedicated funding stream for K-12 education by increasing the annual distribution from Arizona’s State Land Trust. The measure directed additional funds, outside of the state’s General Fund, to public schools over a 10-year period, providing a significant boost to teacher salaries and classroom spending. That authorization is set to expire, and policymakers are now debating how to extend or modify the program moving forward.
Key points of contention include the size and structure of future distributions, whether additional State Land Trust revenues should be allocated to education, and how any extension of Prop. 123 would interact with broader budget priorities. Because changes to the distribution formula require voter approval, any agreement would ultimately need to be referred to the ballot.
With negotiations paused, there is growing uncertainty around the timing of a budget agreement. In the interim, legislative leadership may limit daily floor calendars, and it would not be surprising to see both chambers take an extended recess until meaningful progress is made.
In the meantime, below are several bills we would like to highlight.
Health Insurance
HB 2308 Dental Insurers; Dental Practice; Prohibition (Weninger): HB 2308 passed out of the Senate Regulatory Affairs & Government Efficiency Committee on Wednesday, 7-0. The bill prevents dental insurers and holding companies of dental insurers from having ownership interest in business organizations that offer regulated professional services to the public.
SB 1212 Health Insurance; Reimbursement Rates; Vaccines (Shamp): SB 1212 passed out of the House Government Committee on Wednesday, 4-3. The bill prevents a health care insurer from reimbursing a health professional at a different rate based on a covered individual's decision to refuse a vaccine.
S/E: SB 1372 Insurance; Reimbursement Rates; Nurse Anesthetists (Shope): A strike-everything amendment to SB 1372 passed out of the House Health & Human Services on Monday, 9-1. The striker resurrected HB 2447 Insurance; Reimbursement Rates; Nurse Anesthetists (Lopez) which prohibits health care insurers that issue, amend or renew a contract or policy from imposing a reimbursement rate for Certified Registered Nurse Anesthetists services that differ from the reimbursement rates for licensed physicians. There was a poison pill amendment successfully added to the bill that excludes CRNAs employed by a practice owned by private equity.
S/E: SB 1458 Prohibition; Providers; Patient Prescription Information (Shamp): The strike-everything amendment to SB 1458 passed out of the House Health & Human Services Committee on Monday, 11-1. The striker, sponsored by Representative Bliss, establishes new restrictions on pharmacy benefit managers (PBMs) by prohibiting them from sharing patient or prescriber-identifiable prescription information with affiliated providers for commercial purposes, with limited exceptions for functions such as reimbursement and care coordination. It prohibits PBMs from steering patients to affiliated providers through data use, communications, financial incentives, or other inducements, and bars retaliation against patients who choose non-affiliated providers. The amendment also restricts PBMs from requiring prescription transfers without patient consent, reimbursing affiliated providers at higher rates than non-affiliated providers for the same services, and engaging in unfair or deceptive practices. Violations are subject to investigation and enforcement under consumer fraud laws, and the provisions apply to applicable contracts entered into or renewed after the effective date.
SB 1494 Patient Steering (Werner): SB 1494 passed out of the House Health & Human Services Committee on Monday, 8-1-1. The bill prohibits health care providers, health care institutions and drug manufacturers from paying enrollee health insurance premiums or steering enrollees to change plans based on health status and establishes related criminal penalties.
SB 1497 School Insurance (Werner): SB 1497 passed out of the House Education Committee on Tuesday, 10-0. The bill requires a school district governing board that employs at least 300 employees and that establishes a self-insurance program to obtain quotes for coverage and services at least once every four years. SB 1497 instructs any person who supports a school district's self-insurance program to provide to the school district specified information.
SB 1628 Claims Denial; Prior Authorization; Reporting (Angius): SB 1628 passed out of the House Health & Human Services Committee on Monday, 11-0. The bill adds new statutory reporting requirements for health plans related to claims denials and prior authorization practices. Beginning July 1, 2027, and annually thereafter, plans must submit aggregated data to the Department detailing total claims and prior authorization requests, partial and full denials, appeals by level of review, reversal rates, top denied inpatient and outpatient services by category, and the top five reasons for denials. The bill newly requires disclosure of the total number of claims that were completely downcoded, defined as the unilateral alteration of a submitted service code to a lower-paying code. It also requires reporting on average and median turnaround times for standard and expedited prior authorization determinations, mandates that the Department publish plan-specific reports online each year and directs the Director to adopt rules as necessary to implement these provisions.
SB 1672 AHCCCS; Antipsychotic Drugs; Authorization (Kavanagh): SB 1672 passed out of the House Health & Human Services Committee on Monday, 9-3. The bill would prohibit the AHCCCS and its contractors from implementing prior authorization requirements for antipsychotic drugs prescribed to members 18 years or older with a serious mental illness. It would also prohibit AHCCCS and its contractors from requiring a member to show a failure to respond to more than 2 alternative antipsychotic drugs before covering a particular antipsychotic drug.
HB 2091 Financial Surveillance Fund; Insurer Examinations (Livingston): HB 2091 passed out of the Senate Finance Committee on Monday, 4-1. The bill modernizes the funding structure for the Arizona Department of Insurance and Financial Institutions’ Financial Surveillance Fund. It increases the maximum allowable assessment amount for each range of total admitted assets. A committee amendment removed the provision adjusting for inflation.
HB 4020 Insurance; Fraud Unit; Assessment; Increase (Livingston): HB 4020 passed out of the Senate Finance Committee on Monday, 4-1. The bill increases the maximum assessment amount the Director of the Department of Insurance and Financial Institutions can assess each licensed insurer from $1,050 to $1,350.
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