AHCCCS; claims review; behavioral health

Plain English Breakdown

The official status indicates the bill passed both chambers, but the specific effective date depends on general state law timing not detailed here.

SB1116: New Review Rules for Behavioral Health Claims in the American Indian Health Program

This law requires that any denial or negative appeal decision regarding behavioral health services covered by the American Indian Health Program be reviewed and approved by a clinician with at least two years of experience providing similar services.

What This Bill Does

• Requires an individual to review claims and supporting medical records before denying them based on lack of medical necessity for AIHP behavioral health services.
• Mandates that the person approving any denial or adverse appeal determination must have at least two years of relevant clinical experience providing the same or similar services.
• Adds a new section, 36-2903.18, to Arizona Revised Statutes regarding these review requirements.

Who It Names or Affects

• Members of the American Indian Health Program (AIHP) who receive behavioral health services.
• AHCCCS contractors and staff responsible for reviewing claims and making denial decisions under AIHP.

Terms To Know

American Indian Health Program (AIHP)

A healthcare coverage option within AHCCCS available to enrolled American Indians and Alaska Natives in Arizona, providing medically necessary services including behavioral health care.

Adverse appeal determination

A decision that goes against a member's request when they challenge an initial claim denial or service refusal.

Medical necessity

The judgment about whether a specific medical service is needed to treat a patient's condition, which can be the basis for denying a claim if not met.

Limits and Unknowns

• The bill becomes effective on the general effective date, but no specific calendar date is provided in this document.
• While fiscal notes estimate increased administrative costs and staffing needs, there is insufficient data to evaluate the reasonableness of these estimates.

Official Summary Text

SB1116 - 572R - Senate Fact Sheet

Assigned to
HHS
& ATT������������������������������������������������������������������������������������������������� AS
PASSED BY COW

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

AMENDED

FACT SHEET FOR
s.b. 1116

AHCCCS;
claims review; behavioral health

Purpose

Requires a claim
denial or adverse appeal determination based on the medical necessity of a
behavioral health service covered by the American Indian Health Program (AIHP)
to be reviewed and approved by an individual with specified relevant clinical
experience.

Background

The Arizona
Health Care Cost Containment System (AHCCCS) serves as Arizona's Medicaid
agency, which offers qualifying Arizona residents access to healthcare programs,
including behavioral health. AHCCCS consists of contracts with contractors for
the provision of hospitalization and medical care coverage to members. A
contractor

is a person or entity that has a prepaid capitated contract with AHCCCS to
provide health care to members as prescribed, either directly or through
subcontracts with providers (A.R.S. ��
36-2901

and
36-2903
).

American Indians
and Alaska Natives enrolled in AHCCCS may choose to receive coverage through
the AIHP. The AIHP provides medically necessary services to enrolled members,
including preventative and behavioral health care services. Members enrolled in
the AIHP may receive health care services from Indian Health Facilities
operated by the Indian Health Service, tribally-operated 638 health programs or
urban Indian health clinics and other AHCCCS-registered providers (
AHCCCS
).

A
capped
fee-for-service
is the payment mechanism by which a provider of care is
reimbursed upon submission of a valid claim for a specific covered service or
equipment provided to a member. A payment is made in accordance with an upper
or capped limit established by the Director of AHCCCS and may either be a
specific dollar amount or a percentage of billed charges. AHCCCS must pay
providers, including both contracting and noncontracting providers, at either
the lesser of billed charges or outlined capped fee-for-service rates, unless a
different fee is specified in a contract between AHCCCS and the provider, or is
otherwise required by law. Fee schedules for payment for various covered
services are on file at the central office of AHCCCS for reference use during
customary business hours and on the AHCCCS website (
A.A.C.

R9-22-101
and

R9-22-710
;
AHCCCS
).

The Joint
Legislative Budget Committee (JLBC)� states that AHCCCS estimates S.B. 1116
would increase administrative costs by $490,000 in state General Fund monies
and $1,200,000 in Total Funds for eight FTE positions. The JLBC concurs with
the need to hire additional staff, but notes that there is insufficient data to
evaluate the reasonableness of the specific proposal (
JLBC
fiscal note
).

Provisions

1.

Requires, before a claim denial or adverse appeal determination based on
the medical necessity of a behavioral health service covered by the AIHP,
review of the claim and supporting medical documentation and approval of the
denial or adverse determination by an individual with at least two years of
relevant clinical experience providing the same or similar services.

2.

Becomes effective on the general effective date. �

Amendments Adopted by the
Health and Human Services Committee

1.

Expands the conditions that prompt a review to include any claim denial
or adverse appeal determination, rather than any appeal, based on the medical
necessity of a behavioral health service covered by AHCCCS.

2.

Requires the review and approval of a claim denial or adverse appeal
determination to be conducted an individual with at least two years of relevant
experience providing the same or similar services.

Amendments Adopted by the
Appropriations, Transportation & Technology Committee

1.

Expands the conditions that prompt a review to include any claim denial
or adverse appeal determination, rather than any appeal, based on the medical
necessity of a behavioral health service covered by the AIHP.

2.

Requires the review and approval of a claim denial or adverse appeal
determination to be conducted an individual with at least two years of relevant
experience providing the same or similar services.

Amendments Adopted by
Committee of the Whole

1.

The Health and Human Services Committee amendment was withdrawn.

2.

The Appropriations, Transportation & Technology Committee amendment
was adopted.

Senate Action

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Prepared by Senate Research

March 26, 2026

MM/SDR/hk

Current Bill Text

SB1116 - 572R - S Ver

Senate Engrossed

AHCCCS; claims
review; behavioral health

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SENATE BILL 1116

AN
ACT

Amending title 36, chapter 29, article 1,
Arizona Revised Statutes, by adding section 36-2903.18; 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. Title 36, chapter 29, article 1,
Arizona Revised Statutes, is amended by adding section 36-2903.18, to
read:

START_STATUTE
36-2903.18.

Behavioral health claims; American Indian health program; appeal
review requirement

Before Any
CLAIM DENIAL OR
ADVERSE appeal
DETERMINATION BASED ON THE MEDICAL
NECESSITY of a behavioral health
SERVICE COVERED BY THE
american Indian health program, THE CLAIM AND SUPPORTING MEDICAL RECORD
DOCUMENTATION shall be reviewed
AND THE DENIAL OR ADVERSE
DETERMINATION APPROVED by an individual who has
AT LEAST
TWO YEARS OF relevant clinical experience
PROVIDING THE
SAME OR SIMILAR SERVICES TO THE SERVICES AT ISSUE.

END_STATUTE