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Chapter 0049 - 572R - H Ver of HB2177
House Engrossed
AHCCCS; waivers;
American Indians; services
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
CHAPTER 49
HOUSE BILL 2177
AN
ACT
Amending title 36, chapter 29, article 1,
Arizona Revised Statutes, by adding section 36-2903.18; amending section
36-2907, Arizona Revised Statutes; relating to the Arizona health care
cost containment system.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section
1.
1. Title
36, chapter 29, article 1, Arizona Revised Statutes, is amended by adding
section 36-2903.18, to read:
START_STATUTE
36-2903.18.
Waivers; annual submittal; American Indians and Alaskan natives;
covered services
A. On or before March 30 of each
year, the director shall apply to the centers for medicare and medicaid
services for waivers or amendments to the current section 1115 waiver to
authorize this state to make payments for covered services that are provided to
American Indian or Alaska native members by participating Indian health
services facilities or participating facilities operated by tribes
or tribal organizations under the Indian self-determination and
education assistance act (P.L. 93-638; 88 Stat. 2203; 25 United
States Code chapter 46) and that were eliminated from, reduced or limited in
the state plan on or after September 2010, including payments for medically
necessary diagnostic, therapeutic and preventative dental services.
B. In any year, the director shall
apply pursuant to subsection A of this section for only the waivers or
amendments to the current section 1115 waiver that have not been approved and
are not in effect.
END_STATUTE
Sec.
2.
2. Section
36-2907, Arizona Revised Statutes, is amended to read:
START_STATUTE
36-2907.
Covered health
and medical services; modifications; related delivery of service requirements;
rules; definitions
A. Subject to the limits and exclusions specified in
this section, contractors shall provide the following medically necessary
health and medical services:
1. Inpatient hospital services that are ordinarily
furnished by a hospital to care for and treat inpatients and that are provided
under the direction of a physician or a primary care
practitioner. For the purposes of this section, inpatient hospital
services exclude services in an institution for tuberculosis or mental diseases
unless authorized under an approved section 1115 waiver.
2. Outpatient health services that are ordinarily
provided in hospitals, clinics, offices and other health care facilities by
licensed health care providers. Outpatient health services include
services provided by or under the direction of a physician or a primary care
practitioner, including occupational therapy.
3. Other laboratory and X-ray services ordered
by a physician or a primary care practitioner.
4. Medications that are ordered on prescription by a
physician or a dentist who is licensed pursuant to title 32, chapter 11.�
Persons who are dually eligible for title XVIII and title XIX services must
obtain available medications through a medicare licensed or certified medicare
advantage prescription drug plan, a medicare prescription drug plan or any
other entity authorized by medicare to provide a medicare part D prescription
drug benefit.
5. Medical supplies, durable medical equipment,
insulin pumps and prosthetic devices ordered by a physician or a primary care
practitioner. Suppliers of durable medical equipment shall provide the
administration with complete information about the identity of each person who
has an ownership or controlling interest in their business and shall comply
with federal bonding requirements in a manner prescribed by the administration.
6. For persons who are at least twenty-one
years of age, treatment of medical conditions of the eye, excluding eye
examinations for prescriptive lenses and the provision of prescriptive lenses.
7. Early and periodic health screening and
diagnostic services as required by section 1905(r) of title XIX of the social
security act for members who are under twenty-one years of age.
8. Family planning services that do not include
abortion or abortion counseling. If a contractor elects not to
provide family planning services, this election does not disqualify the
contractor from delivering all other covered health and medical services under
this chapter. In that event, the administration may contract
directly with another contractor, including an outpatient surgical center or a
noncontracting provider, to deliver family planning services to a member who is
enrolled with the contractor that elects not to provide family planning
services.
9. Podiatry services that are performed by a
podiatrist who is licensed pursuant to title 32, chapter 7 and ordered by a
primary care physician or primary care practitioner.
10. Nonexperimental transplants approved for title
XIX reimbursement.
11. Dental services as follows:
(a) Except as provided in subdivision (b) of this
paragraph, for persons who are at least twenty-one years of age,
emergency dental care and extractions in an annual amount of not more than
$1,000 per member.
(b) Subject to approval by the centers for medicare
and medicaid services, for persons treated at an Indian health service or
tribal facility, adult dental services that are eligible for a federal medical
assistance percentage of one hundred percent and that exceed the limit
prescribed in subdivision (a) of this paragraph.
12. Ambulance and nonambulance transportation,
except as provided in subsection G of this section.
13. Hospice care.
14. Orthotics, if all of the following apply:
(a) The use of the orthotic is medically necessary
as the preferred treatment option consistent with medicare guidelines.
(b) The orthotic is less expensive than all other
treatment options or surgical procedures to treat the same diagnosed condition.
(c) The orthotic is ordered by a physician or
primary care practitioner.
15. Subject to approval by the centers for medicare
and medicaid services, medically necessary chiropractic services that are
performed by a chiropractor who is licensed pursuant to title 32, chapter 8 and
that are ordered by a primary care physician or primary care practitioner
pursuant to rules adopted by the administration. The primary care
physician or primary care practitioner may initially order up to twenty visits
annually that include treatment and may request authorization for additional
chiropractic services in that same year if additional chiropractic services are
medically necessary.
16. For up to ten
program hours annually, diabetes outpatient self-management training
services, as defined in 42 United States Code section 1395x, if prescribed by a
primary care practitioner in either of the following circumstances:
(a) The member is
initially diagnosed with diabetes.
(b) For a member who has
previously been diagnosed with diabetes, either:
(i) A change occurs in
the member's diagnosis, medical condition or treatment regimen.
(ii) The member is not meeting appropriate clinical
outcomes.
17. Pursuant to the terms and conditions that are
approved by the centers for medicare and medicaid services and subject to
available funding, traditional healing services, if both of the following
apply:
(a) The member qualifies for services through the
Indian health service or a tribal facility pursuant to the conditions of
participation outlined in 42 Code of Federal Regulations section 136.12.
(b) The traditional healing service is delivered by
or through the Indian health service or a tribal facility.
B. The limits and exclusions for health and medical
services provided under this section are as follows:
1. Circumcision of newborn males is not a covered
health and medical service.
2. For eligible persons who are at least twenty-one
years of age:
(a) Prosthetic devices do not include hearing aids,
dentures or bone-anchored hearing aids. Prosthetic devices,
except prosthetic implants, may be limited to $12,500 per contract year.
(b) Percussive vests are not covered health and
medical services.
(c) Durable medical equipment is limited to items
covered by medicare.
(d) Nonexperimental transplants do not include
pancreas-only transplants.
(e) Bariatric surgery procedures, including
laparoscopic and open gastric bypass and restrictive procedures, are not
covered health and medical services.
C. The system shall pay noncontracting providers
only for health and medical services as prescribed in subsection A of this
section and as prescribed by rule.
D. The director shall adopt rules necessary to
limit, to the extent possible, the scope, duration and amount of services,
including maximum limits for inpatient services that are consistent with
federal regulations under title XIX of the social security act (P.L. 89-97;
79 Stat. 344; 42 United States Code section 1396 (1980)). To
the extent possible and practicable, these rules shall provide for the prior
approval of medically necessary services provided pursuant to this chapter.
E. The director shall make available home health
services in lieu of hospitalization pursuant to contracts awarded under this
article.� For the purposes of this subsection, "home health services"
means the provision of nursing services, home health aide services or medical
supplies, equipment and appliances that are provided on a part-time or
intermittent basis by a licensed home health agency within a member's residence
based on the orders of a physician or a primary care practitioner.� Home health
agencies shall comply with the federal bonding requirements in a manner
prescribed by the administration.
F. The director shall adopt rules for the coverage
of behavioral health services for persons who are eligible under section 36-2901,
paragraph 6, subdivision (a). The administration acting through
the regional behavioral health authorities shall establish a diagnostic and
evaluation program to which other state agencies shall refer children who are
not already enrolled pursuant to this chapter and who may be in need of
behavioral health services. In addition to an evaluation, the
administration acting through regional behavioral health authorities shall also
identify children who may be eligible under section 36-2901,
paragraph 6, subdivision (a) or section 36-2931, paragraph 5 and
shall refer the children to the appropriate agency responsible for making the
final eligibility determination.
G. The director shall adopt rules providing for
transportation services and rules providing for copayment by members for
transportation for other than emergency purposes. Subject to
approval by the centers for medicare and medicaid services, nonemergency
medical transportation shall not be provided except for stretcher vans and
ambulance transportation. Prior authorization is required for transportation by
stretcher van and for medically necessary ambulance transportation initiated
pursuant to a physician's direction. Prior authorization is not
required for medically necessary ambulance transportation services rendered to
members or eligible persons initiated by dialing telephone number 911 or other
designated emergency response systems.
H. The director may adopt rules to allow the
administration, at the director's discretion, to use a second opinion procedure
under which surgery may not be eligible for coverage pursuant to this chapter
without documentation as to need by at least two physicians or primary care
practitioners.
I. If the director does not receive bids within the
amounts budgeted or if at any time the amount remaining in the Arizona health
care cost containment system fund is insufficient to pay for full contract
services for the remainder of the contract term, the administration, on
notification to system contractors at least thirty days in advance, may modify
the list of services required under subsection A of this section for persons
defined as eligible other than those persons defined pursuant to section 36-2901,
paragraph 6, subdivision (a).� The director may also suspend services or may
limit categories of expense for services defined as optional pursuant to title
XIX of the social security act (P.L. 89-97; 79 Stat. 344; 42 United
States Code section 1396 (1980)) for persons defined pursuant to section 36-2901,
paragraph 6, subdivision (a). Such reductions or suspensions do not
apply to the continuity of care for persons already receiving these services.
J. All health and medical services provided under
this article shall be provided in the geographic service area of the member,
except:
1. Emergency services and specialty services
provided pursuant to section 36-2908.
2. That the director may allow the delivery of
health and medical services in other than the geographic service area in this
state or in an adjoining state if the director determines that medical practice
patterns justify the delivery of services or a net reduction in transportation
costs can reasonably be expected. Notwithstanding the definition of
physician as prescribed in section 36-2901, if services are procured from
a physician or primary care practitioner in an adjoining state, the physician
or primary care practitioner shall be licensed to practice in that state
pursuant to licensing statutes in that state that are similar to title 32,
chapter 13, 15, 17 or 25 and shall complete a provider agreement for this
state.
K. Covered outpatient services shall be
subcontracted by a primary care physician or primary care practitioner to other
licensed health care providers to the extent practicable for purposes
including, but not limited to, making health care services available to
underserved areas, reducing costs of providing medical care and reducing
transportation costs.
L. The director shall adopt rules that prescribe the
coordination of medical care for persons who are eligible for system
services. The rules shall include provisions for transferring
patients and medical records and initiating medical care.
M. Pursuant to the terms and conditions that are
approved by the centers for medicare and medicaid services and subject to
available funding, the director shall implement limited benefit coverage
prerelease services to eligible incarcerated individuals and committed youth
for up to ninety days immediately before
the individuals'
each individual's
or committed youth's expected date of release
from a prison, jail, secure care facility or tribal correctional facility.
n. On approval by the centers for�
medicare and medicaid services, the administration may make payments for
covered services that are provided to American Indian or Alaska native members
by participating Indian health services facilities or participating facilities
operated by tribes
or tribal organizations under the
Indian self-determination and education assistance act (P.L. 93-638;
88 Stat. 2203; 25 United States Code chapter 46) and that were eliminated from,
reduced or limited in the state plan on or after September 2010, including
payments for medically necessary diagnostic, therapeutic and preventative
dental services.
N.
O.
Notwithstanding
section 36-2901.08, monies from the hospital assessment fund established
by section 36-2901.09 may not be used to provide any of the following:
1. Chiropractic services as prescribed in subsection
A, paragraph 15 of this section.
2. Diabetes outpatient
self-management training services as prescribed in subsection A, paragraph 16
of this section.
3. Speech therapy
provided in an outpatient setting to eligible persons who are at least twenty-one
years of age.
4. Cochlear implants to
eligible persons who are at least twenty-one years of age.
O.
P.
For
the purposes of this section:
1. "Ambulance" has the same meaning
prescribed in section 36-2201.
2. "Tribal facility" has the same meaning
prescribed in section 36-2981.
END_STATUTE
APPROVED BY THE GOVERNOR APRIL 13, 2026.
FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 13, 2026.