dental or optometric services; contracts

HB2272 - 572R - I Ver

REFERENCE TITLE:
dental or optometric services; contracts

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2272

Introduced by

Representative
Livingston

AN
ACT

amending section 20-826, arizona
revised statutes; relating to dental and optometric SERVICE corporations.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 20-826, Arizona Revised
Statutes, is amended to read:

START_STATUTE
20-826.

Subscription contracts; definitions

A. A contract between a corporation and its
subscribers shall not be issued unless the form of such contract is approved in
writing by the director.

B. Each contract shall plainly state the services to
which the subscriber is entitled and those to which the subscriber is not
entitled under the plan, and shall constitute a direct obligation of the
providers of services with which the corporation has contracted for hospital,
medical, dental or optometric services.

C. Each contract, except for dental services or
optometric services, shall be so written that the corporation shall pay
benefits for each of the following:

1. Performance of any surgical service that is
covered by the terms of such contract, regardless of the place of service.

2. Any home health services that are performed by a
licensed home health agency and that a physician has prescribed in lieu of
hospital services, as defined by the director, providing the hospital services
would have been covered.

3. Any diagnostic service that a physician has
performed outside a hospital in lieu of inpatient service, providing the
inpatient service would have been covered.

4. Any service performed in a hospital's outpatient
department or in a freestanding surgical facility, if such service would have
been covered if performed as an inpatient service.

D. Each contract for dental or optometric services
shall be so written that the corporation shall pay benefits for contracted
dental or optometric services provided by dentists or optometrists.
The contract shall be construed according to the entirely of its terms
and conditions as set forth in the contract and as amplified, extended or
modified by a certificate, rider, endorsement, schedule, summary or application
that is attached to and made part of the contract.� Any document that is a part
of the contract may include language that indicates which document controls if
a conflict exists between the documents.

E. Any contract, except accidental death and
dismemberment, applied for that provides family coverage, as to such coverage
of family members, shall also provide that the benefits applicable for children
shall be payable with respect to a newly born child of the insured from the
instant of such child's birth, to a child adopted by the insured, regardless of
the age at which the child was adopted, and to a child who has been placed for
adoption with the insured and for whom the application and approval procedures
for adoption pursuant to section 8-105 or 8-108 have been completed
to the same extent that such coverage applies to other members of the
family. The coverage for newly born or adopted children or children
placed for adoption shall include coverage of injury or sickness, including
necessary care and treatment of medically diagnosed congenital defects and
birth abnormalities. If payment of a specific premium is required to
provide coverage for a child, the contract may require that notification of
birth, adoption or adoption placement of the child and payment of the required
premium must be furnished to the insurer within thirty-one days after the
date of birth, adoption or adoption placement in order to have the coverage
continue beyond the thirty-one day period.

F. Each contract that is delivered or issued for
delivery in this state after December 25, 1977 and that provides that coverage
of a dependent child shall terminate on attainment of the limiting age for
dependent children specified in the contract shall also provide in substance
that attainment of such limiting age shall not operate to terminate the
coverage of such child while the child is and continues to be both incapable of
self-sustaining employment by reason of intellectual disability or
physical disability and chiefly dependent on the subscriber for support and
maintenance. Proof of such incapacity and dependency shall be
furnished to the corporation by the subscriber within thirty-one days of
the child's attainment of the limiting age and subsequently as may be required
by the corporation, but not more frequently than annually after the two-year
period following the child's attainment of the limiting age.

G. A corporation may not cancel or refuse to renew
any subscriber's contract without giving notice of such cancellation or
nonrenewal to the subscriber under such contract. A notice by the
corporation to the subscriber of cancellation or nonrenewal of a subscription
contract shall be mailed to the named subscriber at least forty-five days
before the effective date of such cancellation or nonrenewal. The
notice shall include or be accompanied by a statement in writing of the reasons
for such action by the corporation.� Failure of the corporation to comply with
this subsection shall invalidate any cancellation or nonrenewal except a
cancellation or nonrenewal for nonpayment of premium.

H. A contract that provides coverage for surgical
services for a mastectomy shall also provide coverage incidental to the
patient's covered mastectomy for surgical services for reconstruction of the
breast on which the mastectomy was performed, surgery and reconstruction of the
other breast to produce a symmetrical appearance, prostheses, treatment of
physical complications for all stages of the mastectomy, including lymphedemas,
and at least two external postoperative prostheses subject to all of the terms
and conditions of the policy.

I. A contract that provides coverage for surgical
services for a mastectomy shall also provide coverage for preventive
mammography screening and diagnostic imaging performed on dedicated equipment
for diagnostic purposes on referral by a patient's physician, subject to all of
the terms and conditions of the policy, including:

1. A mammogram.

2. Digital breast
tomosynthesis, magnetic resonance imaging, ultrasound or other modality and at
such age and intervals as recommended by the national comprehensive cancer
network.� This includes patients at risk for breast cancer who have a family
history with one or more first or second degree relatives with breast cancer,
prior diagnosis of breast cancer, positive testing for hereditary gene
mutations or heterogeneously or dense breast tissue based on the breast imaging
reporting and data system of the American college of radiology.

J. Any contract that is issued to the insured and
that provides coverage for maternity benefits shall also provide that the
maternity benefits apply to the costs of the birth of any child legally adopted
by the insured if all of the following are true:

1. The child is adopted within one year of birth.

2. The insured is legally obligated to pay the costs
of birth.

3. All preexisting conditions and other limitations
have been met by the insured.

4. The insured has notified the insurer of the
insured's acceptability to adopt children pursuant to section 8-105,
within sixty days after such approval or within sixty days after a change in
insurance policies, plans or companies.

K. The coverage prescribed by subsection J of this
section is excess to any other coverage the natural mother may have for
maternity benefits except coverage made available to persons pursuant to title
36, chapter 29. If such other coverage exists, the agency, attorney
or individual arranging the adoption shall make arrangements for the insurance
to pay those costs that may be covered under that policy and shall advise the
adopting parent in writing of the existence and extent of the coverage without
disclosing any confidential information such as the identity of the natural
parent.� The insured adopting parents shall notify their insurer of the
existence and extent of the other coverage.

L. The director may disapprove any contract if the
benefits provided in the form of such contract are unreasonable in relation to
the premium charged.

M. The director shall adopt emergency rules
applicable to persons who are leaving active service in the armed forces of the
United States and returning to civilian status including:

1. Conditions of eligibility.

2. Coverage of dependents.

3. Preexisting conditions.

4. Termination of insurance.

5. Probationary periods.

6. Limitations.

7. Exceptions.

8. Reductions.

9. Elimination periods.

10. Requirements for replacement.

11. Any other condition of subscription contracts.

N. Any contract that provides maternity benefits
shall not restrict benefits for any hospital length of stay in connection with
childbirth for the mother or the newborn child to less than forty-eight
hours following a normal vaginal delivery or ninety-six hours following a
cesarean section.� The contract shall not require the provider to obtain
authorization from the corporation for prescribing the minimum length of stay
required by this subsection. The contract may provide that an
attending provider in consultation with the mother may discharge the mother or
the newborn child before the expiration of the minimum length of stay required
by this subsection.� The corporation shall not:

1. Deny the mother or the newborn child eligibility
or continued eligibility to enroll or to renew coverage under the terms of the
contract solely for the purpose of avoiding the requirements of this
subsection.

2. Provide monetary payments or rebates to mothers
to encourage those mothers to accept less than the minimum protections
available pursuant to this subsection.

3. Penalize or otherwise reduce or limit the
reimbursement of an attending provider because that provider provided care to
any insured under the contract in accordance with this subsection.

4. Provide monetary or other incentives to an
attending provider to induce that provider to provide care to an insured under
the contract in a manner that is inconsistent with this subsection.

5. Except as described in subsection O of this
section, restrict benefits for any portion of a period within the minimum
length of stay in a manner that is less favorable than the benefits provided
for any preceding portion of that stay.

O. Subsection N of this section does not:

1. Require a mother to give birth in a hospital or
to stay in the hospital for a fixed period of time following the birth of the
child.

2. Prevent a corporation from imposing deductibles,
coinsurance or other cost sharing in relation to benefits for hospital lengths
of stay in connection with childbirth for a mother or a newborn child under the
contract, except that any coinsurance or other cost sharing for any portion of
a period within a hospital length of stay required pursuant to subsection N of
this section shall not be greater than the coinsurance or cost sharing for any
preceding portion of that stay.

3. Prevent a corporation from negotiating the level
and type of reimbursement with a provider for care provided in accordance with
subsection N of this section.

P. Any contract that provides coverage for diabetes
shall also provide coverage for equipment and supplies that are medically
necessary and that are prescribed by a health care provider, including:

1. Blood glucose monitors.

2. Blood glucose monitors for the legally blind.

3. Test strips for glucose monitors and visual
reading and urine testing strips.

4. Insulin preparations and glucagon.

5. Insulin cartridges.

6. Drawing up devices and monitors for the visually
impaired.

7. Injection aids.

8. Insulin cartridges for the legally blind.

9. Syringes and lancets, including automatic lancing
devices.

10. Prescribed oral agents for controlling blood
sugar that are included on the plan formulary.

11. To the extent coverage is required under
medicare, podiatric appliances for prevention of complications associated with
diabetes.

12. Any other device, medication, equipment or
supply for which coverage is required under medicare from and after January 1,
1999. The coverage required in this paragraph is effective six
months after the coverage is required under medicare.

Q. Subsection P of this section does not prohibit a
medical service corporation, a hospital service corporation or a hospital,
medical, dental and optometric service corporation from imposing deductibles,
coinsurance or other cost sharing in relation to benefits for equipment or
supplies for the treatment of diabetes.

R. Any hospital or medical service contract that
provides coverage for prescription drugs shall not limit or exclude coverage
for any prescription drug prescribed for the treatment of cancer on the basis
that the prescription drug has not been approved by the United States food and
drug administration for the treatment of the specific type of cancer for which
the prescription drug has been prescribed, if the prescription drug has been
recognized as safe and effective for treatment of that specific type of cancer
in one or more of the standard medical reference compendia prescribed in
subsection S of this section or medical literature that meets the criteria
prescribed in subsection S of this section. The coverage required
under this subsection includes covered medically necessary services associated
with the administration of the prescription drug.� This subsection does not:

1. Require coverage of any prescription drug used in
the treatment of a type of cancer if the United States food and drug
administration has determined that the prescription drug is contraindicated for
that type of cancer.

2. Require coverage for any experimental
prescription drug that is not approved for any indication by the United States
food and drug administration.

3. Alter any law with regard to provisions that
limit the coverage of prescription drugs that have not been approved by the
United States food and drug administration.

4. Notwithstanding section 20-841.05, require
reimbursement or coverage for any prescription drug that is not included in the
drug formulary or list of covered prescription drugs specified in the contract.

5. Notwithstanding section 20-841.05, prohibit
a contract from limiting or excluding coverage of a prescription drug, if the
decision to limit or exclude coverage of the prescription drug is not based
primarily on the coverage of prescription drugs required by this section.

6. Prohibit the use of deductibles, coinsurance,
copayments or other cost sharing in relation to drug benefits and related
medical benefits offered.

S. For the purposes of subsection R of this section:

1. The acceptable standard medical reference
compendia are the following:

(a) The American hospital formulary service drug
information, a publication of the American society of health system
pharmacists.

(b) The national comprehensive cancer network drugs
and biologics compendium.

(c) Thomson Micromedex compendium DrugDex.

(d) Elsevier gold standard's clinical pharmacology
compendium.

(e) Other authoritative compendia as identified by
the secretary of the United States department of health and human services.

2. Medical literature may be accepted if all of the
following apply:

(a) At least two articles from major peer reviewed
professional medical journals have recognized, based on scientific or medical
criteria, the drug's safety and effectiveness for treatment of the indication
for which the drug has been prescribed.

(b) No article from a major peer reviewed
professional medical journal has concluded, based on scientific or medical
criteria, that the drug is unsafe or ineffective or that the drug's safety and
effectiveness cannot be determined for the treatment of the indication for
which the drug has been prescribed.

(c) The literature meets the uniform requirements
for manuscripts submitted to biomedical journals established by the
international committee of medical journal editors or is published in a journal
specified by the United States department of health and human services as
acceptable peer reviewed medical literature pursuant to section 186(t)(2)(B) of
the social security act (42 United States Code section 1395x(t)(2)(B)).

T. A corporation shall not issue or deliver any
advertising matter or sales material to any person in this state until the
corporation files the advertising matter or sales material with the
director. This subsection does not require a corporation to have the
prior approval of the director to issue or deliver the advertising matter or
sales material.� If the director finds that the advertising matter or sales
material, in whole or in part, is false, deceptive or misleading, the director
may issue an order disapproving the advertising matter or sales material,
directing the corporation to cease and desist from issuing, circulating,
displaying or using the advertising matter or sales material within a period of
time specified by the director but not less than ten days and imposing any
penalties prescribed in this title. At least five days before
issuing an order pursuant to this subsection, the director shall provide the
corporation with a written notice of the basis of the order to provide the
corporation with an opportunity to cure the alleged deficiency in the
advertising matter or sales material within a single five-day period for
the particular advertising matter or sales material at issue.� The corporation
may appeal the director's order pursuant to title 41, chapter 6, article
10. Except as otherwise provided in this subsection, a corporation
may obtain a stay of the effectiveness of the order as prescribed in section 20-162.�
If the director certifies in the order and provides a detailed explanation of
the reasons in support of the certification that continued use of the
advertising matter or sales material poses a threat to the health, safety or
welfare of the public, the order may be entered immediately without opportunity
for cure and the effectiveness of the order is not stayed pending the hearing
on the notice of appeal but the hearing shall be promptly instituted and
determined.

U. Any contract that is offered by a hospital
service corporation or medical service corporation and that contains a
prescription drug benefit shall provide coverage of medical foods to treat
inherited metabolic disorders as provided by this section.

V. The metabolic disorders triggering medical foods
coverage under this section shall:

1. Be part of the newborn screening program
prescribed in section 36-694.

2. Involve amino acid, carbohydrate or fat
metabolism.

3. Have medically standard methods of diagnosis,
treatment and monitoring, including quantification of metabolites in blood,
urine or spinal fluid or enzyme or DNA confirmation in tissues.

4. Require specially processed or treated medical
foods that are generally available only under the supervision and direction of
a physician who is licensed pursuant to title 32, chapter 13 or 17 or a
registered nurse practitioner who is licensed pursuant to title 32, chapter 15,
that must be consumed throughout life and without which the person may suffer
serious mental or physical impairment.

W. Medical foods eligible for coverage under this
section shall be prescribed or ordered under the supervision of a physician
licensed pursuant to title 32, chapter 13 or 17 as medically necessary for the
therapeutic treatment of an inherited metabolic disease.

X. A hospital service corporation or medical service
corporation shall cover at least fifty percent of the cost of medical foods
prescribed to treat inherited metabolic disorders and covered pursuant to this
section. A hospital service corporation or medical service
corporation may limit the maximum annual benefit for medical foods under this
section to $5,000, which applies to the cost of all prescribed modified low
protein foods and metabolic formula.

Y. Any contract between a corporation and its
subscribers is subject to the following:

1. If the contract provides coverage for
prescription drugs, the contract shall provide coverage for any prescribed drug
or device that is approved by the United States food and drug administration
for use as a contraceptive. A corporation may use a drug formulary,
multitiered drug formulary or list but that formulary or list shall include
oral, implant and injectable contraceptive drugs, intrauterine devices and
prescription barrier methods. The corporation may not impose
deductibles, coinsurance, copayments or other cost containment measures for
contraceptive drugs that are greater than the deductibles, coinsurance,
copayments or other cost containment measures for other drugs on the same level
of the formulary or list.

2. If the contract provides coverage for outpatient
health care services, the contract shall provide coverage for outpatient
contraceptive services.� For the purposes of this paragraph, "outpatient
contraceptive services" means consultations, examinations, procedures and
medical services provided on an outpatient basis and related to the use of
approved United States food and drug administration prescription contraceptive
methods to prevent unintended pregnancies.

3. This subsection does not apply to contracts
issued to individuals on a nongroup basis.

Z. Notwithstanding subsection Y of this section, a
religiously affiliated employer may require that the corporation provide a
contract without coverage for specific items or services required under
subsection Y of this section because providing or paying for coverage of the
specific items or services is contrary to the religious beliefs of the
religiously affiliated employer offering the plan. If a religiously
affiliated employer objects to providing coverage for specific items or services
required under subsection Y of this section, a written affidavit shall be filed
with the corporation stating the objection. On receipt of the
affidavit, the corporation shall issue to the religiously affiliated employer a
contract that excludes coverage for specific items or services required under
subsection Y of this section.� The corporation shall retain the affidavit for
the duration of the contract and any renewals of the contract. This
subsection shall not exclude coverage for prescription contraceptive methods ordered
by a health care provider with prescriptive authority for medical indications
other than for contraceptive, abortifacient, abortion or sterilization
purposes. A religiously affiliated employer offering the plan may
state religious beliefs in its affidavit and may require the subscriber to
first pay for the prescription and then submit a claim to the hospital service
corporation, medical service corporation or hospital, medical, dental and
optometric service corporation along with evidence that the prescription is not
for a purpose covered by the objection. A hospital service
corporation, medical service corporation or hospital, medical, dental and
optometric service corporation may charge an administrative fee for handling
these claims.

AA. Subsection Z of this section does not authorize
a religiously affiliated employer to obtain an employee's protected health
information or to violate the health insurance portability and accountability
act of 1996 (P.L. 104-191; 110 Stat. 1936) or any federal regulations
adopted pursuant to that act.

BB. Subsection Z of this section does not restrict
or limit any protections against employment discrimination that are prescribed
in federal or state law.

CC. For the purposes of:

1. This section:

(a) "Inherited metabolic disorder" means a
disease caused by an inherited abnormality of body chemistry and includes a
disease tested under the newborn screening program prescribed in section 36-694.

(b) "Medical foods" means modified low
protein foods and metabolic formula.

(c) "Metabolic formula" means foods that
are all of the following:

(i) Formulated to be consumed or administered
enterally under the supervision of a physician who is licensed pursuant to
title 32, chapter 13 or 17.

(ii) Processed or formulated to be deficient in one
or more of the nutrients present in typical foodstuffs.

(iii) Administered for the medical and nutritional
management of a person who has limited capacity to metabolize foodstuffs or
certain nutrients contained in the foodstuffs or who has other specific
nutrient requirements as established by medical evaluation.

(iv) Essential to a person's optimal growth, health
and metabolic homeostasis.

(d) "Modified low protein foods" means
foods that are all of the following:

(i) Formulated to be consumed or administered
enterally under the supervision of a physician who is licensed pursuant to
title 32, chapter 13 or 17.

(ii) Processed or formulated to contain less than
one gram of protein per unit of serving, but does not include a natural food
that is naturally low in protein.

(iii) Administered for the medical and nutritional
management of a person who has limited capacity to metabolize foodstuffs or
certain nutrients contained in the foodstuffs or who has other specific
nutrient requirements as established by medical evaluation.

(iv) Essential to a person's optimal growth, health
and metabolic homeostasis.

2. Subsection E of this section, "child",
for purposes of initial coverage of an adopted child or a child placed for
adoption but not for purposes of termination of coverage of such child, means a
person who is under eighteen years of age.

3. Subsections Z and AA of this section,
"religiously affiliated employer" means either:

(a) An entity for which all of the following apply:

(i) The entity primarily employs persons who share
the religious tenets of the entity.

(ii) The entity primarily serves persons who share
the religious tenets of the entity.

(iii) The entity is a nonprofit organization as
described in section 6033(a)(3)(A)(i) or (iii) of the internal revenue code of
1986, as amended.

(b) An entity whose articles of incorporation
clearly state that it is a religiously motivated organization and whose
religious beliefs are central to the organization's operating principles.
END_STATUTE

Sec. 2.
Applicability

Section 20-826, Arizona Revised
Statutes, as amended by this act, applies to contracts that are entered into on
or after the effective date of this act.