AHCCCS; noncontracting providers; reimbursement

Plain English Breakdown

The official text states reimbursement is for laboratory services referred by a contracted provider of the contractor; it does not explicitly define if this applies to all diagnostic services or only those involving lab work, though prior authorization bans cover diagnostic services broadly.

SB1086: Rules for AHCCCS Payments to Noncontracting Providers

This law requires Arizona Medicaid health plans to pay non-contracted providers for lab work when a contracted doctor refers a patient, while banning prior authorization for diagnostic services and retaliation against referring doctors.

What This Bill Does

• Requires AHCCCS contractors to reimburse noncontracting providers for laboratory services if the member was referred by a contracted provider of that contractor.
• Limits reimbursement rates so they cannot exceed what is paid to contracting providers.
• Prohibits contractors from requiring prior authorization for diagnostic services.
• Bans contractors from taking or threatening retaliatory action against doctors who refer patients to noncontracted providers.

Who It Names or Affects

• AHCCCS health plan contractors
• Noncontracting medical providers offering laboratory and diagnostic services
• Contracted providers who make referrals for members

Terms To Know

AHCCCS contractor

A person or entity with a prepaid capitated contract to provide health care to AHCCCS members.

Noncontracting provider

A medical professional who does not have a direct contract with the AHCCCS health plan.

Prior authorization

Approval required from an insurance company before receiving certain services or treatments.

Limits and Unknowns

• The law applies specifically to laboratory and diagnostic services, not all medical care.
• Reimbursement is limited to the rate paid to contracting providers; higher rates are prohibited.
• Officials state there is insufficient information to determine how much this change will cost.

Official Summary Text

SB1086 - 572R - Senate Fact Sheet

Assigned to
HHS������������������������������������������������������������������������������������������������ AS
PASSED BY COMMITTEE

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

REVISED

AMENDED

FACT SHEET FOR
S.B. 1086

AHCCCS;
noncontracting providers; reimbursement

Purpose

Requires contractors with the Arizona Health Care Cost Containment System
(AHCCCS) to reimburse noncontracting providers for laboratory services under
specified conditions and prohibits contractors from imposing restrictions or
taking retaliatory actions relating to noncontracting provider referrals.

Background

AHCCCS contracts with health plans to
provide medically necessary health and medical services to eligible members.
AHCCCS contractors are required to provide services and supplies including but
not limited to: 1) inpatient and outpatient hospital services; 2) laboratory
and X-ray services; 3) prescription medications; 4) medical supplies, durable
medical equipment, insulin pumps and prosthetic devices; 5) medical treatment
of eye conditions; 6) early and periodic health screening and diagnostic
services; 7) family planning services; 8) podiatry services;

9) nonexperimental transplants; 10) emergency dental care; 11) ambulance and
nonambulance transportation; 12) hospice care; 13) orthotics; 14) chiropractic
services; 15) diabetes outpatient

self-management training services; and 16) traditional healing services, as
specified (
A.R.S. � 36-2907
).

Contractor
means a person or entity that has a prepaid capitated
contract with AHCCCS to provide health care to members either directly or
through subcontracts with providers (
A.R.S.

� 36-2901
).

The Joint Legislative Budget Committee fiscal note estimates that S.B.
1086 would generate additional costs due to increased reimbursement for non-contracted
providers and increased utilization of diagnostic services that would otherwise
require prior authorization, but there is insufficient information to determine
the magnitude of these costs (
JLBC fiscal
note
).

Provisions

1.

Requires
an AHCCCS contractor to reimburse a noncontracting provider for laboratory
services rendered to a member who is enrolled with the contractor if the member
was referred by a contracted provider.

2.

Prohibits
a contractor from reimbursing a noncontracting provider at a rate exceeding the
reimbursement rate for contracting providers.

3.

Prohibits
a contractor from requiring prior authorization for diagnostic services.

4.

Prohibits
a contractor from taking or threatening to take retaliatory action against a
contracted provider for referring a member to a noncontracted provider.

5.

Contains
a statement of legislative intent.

6.

Becomes
effective on the general effective date.

Amendments
Adopted by Committee

�

Prohibits a contractor from reimbursing a noncontracting provider
at a rate exceeding the reimbursement rate for contracting providers.

Revisions

�

Updates the fiscal impact statement.

Senate
Action

HHS��� 2/11/26����������� DPA��� 4-2-1

ATT���� 3/2/26������������� W/D

Prepared by Senate Research

April 2, 2026

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Current Bill Text

SB1086 - 572R - S Ver

Senate Engrossed

AHCCCS;
noncontracting providers; reimbursement

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SENATE BILL 1086

AN
ACT

Amending title 36, chapter 29, article 1,
Arizona Revised Statutes, by adding section 36-2905.05; 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 36-2905.05, to read:

START_STATUTE
36-2905.05.

Contractors; reimbursement; noncontracting providers;
prohibitions

a. nOTWITHSTANDING ANY OTHER LAW TO
THE CONTRARY:

1. A contractor shall reimburse a
noncontracting provider for laboratory services rendered to a member who is
enrolled with the contractor if the member was referred by a contracted
provider
OF THE CONTRACTOR AT A RATE THAT IS NOT MORE
THAN THE RATE THAT WOULD BE REIMBURSED TO A CONTRACTING PROVIDER.

2. A contractor may not require prior
authorization for diagnostic services.

b. A contractor may not take or
threaten to take retaliatory action against a contracted provider for referring
a member to a noncontracted provider.
END_STATUTE

Sec.
2.
2.
Legislative intent

The legislature intends to promote
cost controls through competition and to avoid monopolistic practices that
interfere with the free market.� Adequate oversight through rigorous audit
practices is the alternative.