2026-2027; health care.

HB4145 - 572R - H Ver

House Engrossed

2026-2027; health
care.

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 4145

AN
ACT

Amending title 36, chapter 29, article 1,
Arizona Revised Statutes, by adding sections 36-2903.18 and 36-2903.19;
appropriating monies; relating to health care.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Title 36, chapter 29, article 1,
Arizona Revised Statutes, is amended by adding sections 36-2903.18 and 36-2903.19,
to read:

START_STATUTE
36-2903.18.

Data matching agreements; review of member eligibility
information; quarterly eligibility redetermination; waiver requests

A. The administration shall enter
into a data matching agreement with the department of
revenue
to identify members who have lottery or gambling winnings of $3,000 or
more. the administration shall review this information On at least a
monthly basis. If a member fails to disclose winnings of $3,000 or
more and is identified through the database match, the administration shall
consider the member's failure to disclose the information a violation of the
system's terms of eligibility.

B. On at least a monthly basis, the
administration shall
:

1. Receive and review death records
information from the department of health services concerning members and shall
adjust system eligibility accordingly.

2. Review information concerning
members that indicates a change in circumstances that may affect eligibility,
including potential changes in residency as identified by out-of-state
electronic benefit transfer card transactions.

C. On a quarterly basis, the
administration shall
redetermine the eligibility of able-bodied
adults who are eligible pursuant to section 36-2901, 36-2901.01 or
36-2901.07 and who are not american indians or alaskan
natives. For the purposes of the redetermination process, the
administration shall receive and review information from
both:

1. the department of revenue
concerning members that indicates a change in circumstances that may affect
eligibility for the system, including potential changes in income, wages or
residency as identified by tax records.

2. the department of economic
security concerning members that indicates a change in circumstances that may
affect eligibility, including changes to unemployment benefits, employment
status or wages.

D. Unless required by federal law,
the administration may not accept self-attestation of income, residency,
age, household composition, caretaker or relative status or receipt of other
health insurance coverage without independent verification before
enrollment. The administration may not request authority to waive or
decline to periodically check any available income-related data sources
to verify eligibility.

E. The administration may not accept
eligibility determinations for the system from an exchange established pursuant
to 42 United States code section 18041(
c
). The
administration may accept assessments from an exchange established pursuant to
42 United States code section 18041(
c
) but shall
independently verify eligibility and make eligibility determinations.

F. If the administration receives
information concerning a member that indicates a change in the member's
circumstances that may affect eligibility, the administration shall review the
member's eligibility.

G. The administration may execute a
memorandum of understanding with any other department of this state for
information required to be shared pursuant to this section. The
administration may contract with one or more independent vendors to provide
additional data or information that may indicate a change in circumstances and
affect an individual's eligibility.

H. On or before April 1, 2027, the
administration shall submit to the centers for medicare and medicaid services
any waiver requests necessary to implement this section.
END_STATUTE

START_STATUTE
36-2903.19.

Presumptive eligibility; limits; standards; notification;
training

A. The administration shall request
approval from the centers for medicare and medicaid services for a section 1115
waiver to allow the administration to eliminate mandatory hospital presumptive
eligibility and restrict presumptive eligibility determinations to children and
pregnant women eligibility groups. If approval for the section 1115
waiver is denied, the administration shall resubmit a subsequent request for
approval within twelve months after each denial.

B. Unless required by federal law,
the administration may not designate itself as a qualified health entity for
the purpose of making presumptive eligibility determinations or for any purpose
not expressly authorized by state law.

C. When making presumptive
eligibility determinations, a qualified hospital shall do all of the following:

1. Notify the administration of each
presumptive eligibility determination within five working days after the date
the determination is made.

2. Assist individuals who are
determined presumptively eligible under the system with completing and
submitting a full application for system eligibility.

3. Notify each applicant in writing
and on all relevant forms with plain language and large print that if the
applicant does not file a full application for system eligibility with the
administration before the last day of the following month, presumptive
eligibility coverage will end on the last day of the following month.

4. Notify each applicant that if the
applicant files a full application for system eligibility with the
administration before the last day of the following month, presumptive
eligibility coverage will continue until an eligibility determination is made
on the application that is filed.

D. The administration shall apply the
following standards to establish and ensure that accurate presumptive
eligibility determinations are made by each qualified hospital:

1. Whether the qualified hospital
submitted to the administration the presumptive eligibility card within five
working days after the determination date.

2. Whether a full application for
system eligibility was received by the administration before the expiration of
the presumptive eligibility period.

3. If a full application was received
by the administration, whether the individual was found to be eligible under
the system.

E. If the administration determines
that a qualified hospital fails to meet any of the standards established under
subsection D of this section for any presumptive eligibility determination that
the qualified hospital made, the administration shall notify the qualified
hospital in writing within five days after the determination. The
notice must include:

1. For the first violation, both of
the following:

(
a
) A
description of the standard that was not met and an explanation of why it was
not met.

(
b
) Confirmation
that a second finding will require that all applicable hospital staff
participate in mandatory training by the administration on hospital presumptive
eligibility rules.

2. For the second violation, all of
the following:

(
a
) A
description of the standard that was not met and an explanation of why it was
not met.

(
b
) Confirmation
that all applicable hospital staff will be required to participate in mandatory
training by the administration on hospital presumptive eligibility rules,
including the date, time and location of the training as determined by the
administration.

(
c
) A
description of available appeals procedures by which a qualified hospital may
dispute the finding and remove the finding from the qualified hospital's record
by providing clear and convincing evidence that the standard was met.

(
d
) Confirmation
that if the qualified hospital subsequently fails to meet any standard for
presumptive eligibility for any determination, the qualified hospital will no
longer be qualified to make presumptive eligibility determinations under the
system.

3. For the third violation, all of
the following:

(
a
) A
description of the standard that was not met and an explanation of why it was
not met.

(
b
) A
description of available appeals procedures by which a qualified hospital may
dispute the finding and remove the finding from the qualified hospital's record
by providing clear and convincing evidence that the standard was met.

(
c
) Confirmation
that, effective immediately, the qualified hospital is no longer qualified to
make presumptive eligibility determinations under the system.

END_STATUTE

Sec. 2.
ALTCS; county
contributions; fiscal year 2026-2027

A. Notwithstanding section
11-292, Arizona Revised Statutes, county contributions for the Arizona
long-term care system for fiscal year 2026-2027 are as follows:

1. Apache���������������������������������� $ 792,400

2. Cochise��������������������������������� $ 8,055,900

3. Coconino�������������������������������� $ 2,378,900

4. Gila������������������������������������ $ 3,365,400

5. Graham���������������������������������� $ 2,320,400

6. Greenlee�������������������������������� $ 138,200

7. La Paz���������������������������������� $ 756,100

8. Maricopa�������������������������������� $298,895,000

9. Mohave���������������������������������� $ 12,022,500

10. Navajo��������������������������������� $ 3,279,800

11. Pima����������������������������������� $ 68,282,000

12. Pinal���������������������������������� $ 19,662,800

13. Santa Cruz����������������������������� $ 3,204,100

14. Yavapai�������������������������������� $ 8,793,400

15. Yuma����������������������������������� $ 13,867,000

B. If the overall cost for
the Arizona long-term care system exceeds the amount specified in the general
appropriations act for fiscal year 2026-2027, the state treasurer shall
collect from the counties the difference between the amount specified in
subsection A of this section and the counties' share of the state's actual
contribution. The counties' share of the state's contribution must
comply with any federal maintenance of effort requirements. The
director of the Arizona health care cost containment system administration
shall notify the state treasurer of the counties' share of the state's
contribution and report the amount to the director of the joint legislative
budget committee. The state treasurer shall withhold from any other
monies payable to a county from whatever state funding source is available an
amount necessary to fulfill that county's requirement specified in this
subsection. The state treasurer may not withhold distributions from
the Arizona highway user revenue fund pursuant to title 28, chapter 18, article
2, Arizona Revised Statutes.� The state treasurer shall deposit the amounts
withheld pursuant to this subsection and amounts paid pursuant to subsection A
of this section in the long-term care system fund established by section 36-2913,
Arizona Revised Statutes.

Sec. 3.
AHCCCS; disproportionate share payments; fiscal year
2026-2027

A. Disproportionate
share payments for fiscal year 2026-2027 made pursuant to section
36-2903.01, subsection O, Arizona Revised Statutes, include:

1. $28,474,900 for the
Arizona state hospital. The Arizona state hospital shall provide a
certified public expense form for the amount of qualifying disproportionate
share hospital expenditures made on behalf of this state to the Arizona health
care cost containment system administration on or before March 31,
2027. The administration shall assist the Arizona state hospital in
determining the amount of qualifying disproportionate share hospital
expenditures. Once the administration files a claim with the federal
government and receives federal financial participation based on the amount
certified by the Arizona state hospital, the administration shall deposit the
entire amount of federal financial participation in the state general
fund. If the certification provided is for an amount less than
$28,474,900, the administration shall notify the governor, the president of the
senate and the speaker of the house of representatives and shall deposit the
entire amount of federal financial participation in the state general
fund. The certified public expense form provided by the Arizona
state hospital must contain both the total amount of qualifying
disproportionate share hospital expenditures and the amount limited by section
1923(g) of the social security act.

2. $884,800 for private
qualifying disproportionate share hospitals.� The Arizona health care cost
containment system administration shall make payments to hospitals consistent
with this appropriation and the terms of the state plan, but payments are
limited to those hospitals that either:

(
a
) Meet
the mandatory definition of disproportionate share qualifying hospitals under
section 1923 of the social security act.

(
b
) Are
located in Yuma county and contain at least three hundred beds.

B.
After the distributions made pursuant to subsection A of
this section, the allocations of disproportionate share hospital payments made
pursuant to section 36-
2903.01,
subsection P, Arizona Revised Statutes, shall be made available in the
following order to qualifying private hospitals that are:

1. Located in a county with
a population of less than four hundred thousand persons.

2. Located in a county with
a population of at least four hundred thousand persons but less than nine
hundred thousand persons.

3. Located in a county with
a population of at least nine hundred thousand persons.

Sec. 4.
AHCCCS transfer; counties; federal monies; fiscal year
2026-2027

On or
before December 31, 2027, notwithstanding any other law, for fiscal year 2026-2027,
the Arizona health care cost containment system administration shall transfer
to the counties the portion, if any, as may be necessary to comply with section
10201(c)(6) of the patient protection and affordable care act (P.L. 111-148),
regarding the counties' proportional share of this state's contribution.

Sec. 5.
County acute care
contributions; fiscal year 2026-2027; intent

A. Notwithstanding section
11-292, Arizona Revised Statutes, for fiscal year 2026-2027 for the provision
of hospitalization and medical care, the counties shall contribute the
following amounts:

1. Apache ��������������������������������� $ 268,800

2. Cochise��������������������������������� $ 2,214,800

3. Coconino�������������������������������� $ 742,900

4. Gila������������������������������������ $ 1,413,200

5. Graham���������������������������������� $ 536,200

6. Greenlee�������������������������������� $ 190,700

7. La Paz���������������������������������� $ 212,100

8. Maricopa�������������������������������� $14,417,300

9. Mohave���������������������������������� $ 1,237,700

10. Navajo��������������������������������� $ 310,800

11. Pima����������������������������������� $14,951,800

12. Pinal���������������������������������� $ 2,715,600

13. Santa Cruz����������������������������� $ 482,800

14. Yavapai�������������������������������� $ 1,427,800

15. Yuma����������������������������������� $ 1,325,100

B. If a county does not
provide funding as specified in subsection A of this section, the state
treasurer shall subtract the amount owed by the county to the Arizona health
care cost containment system fund and the long-term care system fund
established by section 36-2913, Arizona Revised Statutes, from any payments
required to be made by the state treasurer to that county pursuant to section
42-5029, subsection D, paragraph 2, Arizona Revised Statutes, plus interest on
that amount pursuant to section 44-1201, Arizona Revised Statutes, retroactive
to the first day the funding was due. If the monies the state
treasurer withholds are insufficient to meet that county's funding requirements
as specified in subsection A of this section, the state treasurer shall
withhold from any other monies payable to that county from whatever state
funding source is available an amount necessary to fulfill that county's
requirement. The state treasurer may not withhold distributions from
the Arizona highway user revenue fund pursuant to title 28, chapter 18, article
2, Arizona Revised Statutes.

C. Payment of an amount
equal to one-twelfth of the total amount determined pursuant to subsection A of
this section shall be made to the state treasurer on or before the fifth day of
each month. On request from the director of the Arizona health care
cost containment system administration, the state treasurer shall require that
up to three months' payments be made in advance, if necessary.

D. The state treasurer
shall deposit the amounts paid pursuant to subsection C of this section and
amounts withheld pursuant to subsection B of this section in the Arizona health
care cost containment system fund and the long-term care system fund
established by section 36-2913, Arizona Revised Statutes.

E. If payments made
pursuant to subsection C of this section exceed the amount required to meet the
costs incurred by the Arizona health care cost containment system for the
hospitalization and medical care of those persons defined as an eligible person
pursuant to section 36-2901, paragraph 6, subdivisions (a), (b) and (c),
Arizona Revised Statutes, the director of the Arizona health care cost
containment system administration may instruct the state treasurer either to
reduce remaining payments to be paid pursuant to this section by a specified
amount or to provide to the counties specified amounts from the Arizona health
care cost containment system fund and the long-term care system fund
established by section 36-2913, Arizona Revised Statutes.

F. The legislature intends
that the Maricopa county contribution pursuant to subsection A of this section
be reduced in each subsequent year according to the changes in the GDP price
deflator.� For the purposes of this subsection, "GDP price deflator"
has the same meaning prescribed in section 41-563, Arizona Revised Statutes.

Sec. 6.
Department of
administration; state employee health insurance; premiums; intent

A. Notwithstanding sections
38-651, 38-651.01 and 38-654, Arizona Revised Statutes, for
the health insurance benefit plan year 2027 the department of administration
shall implement a ten percent increase to the health insurance premium
contributions paid by full-time officers and employees of this state and
by former employees who worked for this state and who opt on retirement to
enroll or continue enrollment in the group health and accident coverage for
active employees working for this state.

B. The legislature intends
that for the health insurance benefit plan years 2028 and 2029 the department
of administration implement in each plan year a five percent increase to the
health insurance premium contributions paid by full-time officers and
employees of this state and by former employees who worked for this state and
who opt on retirement to enroll or continue enrollment in the group health and
accident coverage for active employees working for this state.

Sec. 7.
AHCCCS; mental health medication utilization; report;
definition

A. Not
later than January 31, 2027, the Arizona health care cost containment system
administration shall prepare and issue a report to the governor, the
chairpersons of the house of representatives and senate health and human
services committees, or their successor committees, the director of the joint
legislative budget committee and the director of the governor's office of
strategic planning and budgeting that includes information about the costs and
aggregate spending on and aggregate utilization of mental health medications
during contract year 2024-2025.� The administration shall provide a copy
of the report to the secretary of state.

B. The report required by
subsection A of this section shall include the annual aggregate gross amount
spent for each mental health medication class and the annual aggregate net
amount spent by this state for each mental health medication class after
rebates without disclosing any information about manufacturer-negotiated
supplemental rebate agreements for any specific drug. The report
shall also include the average annual cost by class for generic and nongeneric
mental health medications. Without disclosing any information about
manufacturer-negotiated supplemental rebate agreements that could
compromise the competitive or proprietary nature of these agreements, for
antipsychotic and antidepressant medications, the report shall include the
total number of prior authorizations submitted for nonpreferred antipsychotic
and nonpreferred antidepressant medications, the percentage of prior
authorization approvals and denials, the generic antipsychotic and generic
antidepressant medication utilization percentages and the total amount of
antipsychotic and antidepressant medication claims.

C. For purposes of this
section, "mental health medication" means the following medications:

1. Antipsychotics.

2. Antidepressants.

3. Anxiolytics.

4. Stimulants.

5. Sedative hypnotics.

Sec. 8.
Proposition 204
administration; exclusion; county expenditure limitations

County contributions for the
administrative costs of implementing sections 36-2901.01 and 36-2901.04,
Arizona Revised Statutes, that are made pursuant to section 11-292, subsection
O, Arizona Revised Statutes, are excluded from the county expenditure limitations.

Sec. 9.
Competency
restoration; exclusion; county expenditure limitations

County contributions made pursuant to
section 13-4512, Arizona Revised Statutes, are excluded from the county expenditure
limitations.

Sec. 10.
AHCCCS; risk
contingency rate setting

Notwithstanding any other law, for the
contract year beginning October 1, 2026 and ending September 30, 2027, the
Arizona health care cost containment system administration may continue the
risk contingency rate setting for all managed care organizations and the
funding for all managed care organizations administrative funding levels that
were imposed for the contract year beginning October 1, 2010 and ending
September 30, 2011.

Sec. 11.
Legislative
intent; implementation of program

The legislature intends that for
fiscal year 2026-2027 the Arizona health care cost containment system
administration implement a program within the available appropriation.

Sec. 12.
Effective date

Sections 36-2903.18 and 36-2903.19,
Arizona Revised Statutes, as added by this act, are effective from and after
December 31, 2026.