Official Summary Text
SB1399 - 572R - Senate Fact Sheet
Assigned to
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PASSED BY COW
ARIZONA STATE SENATE
Fifty-Seventh
Legislature, Second Regular Session
AMENDED
FACT SHEET FOR
S.B. 1399
prepaid capitated
contractors; cost reports
Purpose
Requires, by
December 1 of each year, the Arizona Health Care Cost Containment System
(AHCCCS) to report the percentage of monies all nongovernment entities that
have a prepaid capitated contract with AHCCCS spent in the previous contract
year on direct payments to providers for services and
administrative
costs, by category, to specified officials.
Background
AHCCCS
administers the state�s Medicaid program and delivers services to eligible
members primarily through contracts with managed care organizations and other
prepaid capitated contractors. AHCCCS pays contractors a fixed per-member,
per-month payment to provide covered services. Contractors are then responsible
for managing the delivery and cost of care within those payments. Through these
contracts, AHCCCS provides coverage for specified health care services and
supplies, including but not limited to inpatient and outpatient hospital
services, laboratory and X-ray services, prescription medications and medical supplies,
health screenings, diagnostic services and medical transportation (A.R.S. ��
36-2901
;
36-2904
and
36-2907
).
There is no anticipated fiscal impact to the state
General Fund associated with this legislation.
Provisions
1.
Requires,
by December 1 of each year, AHCCCS to submit an annual report, aggregated for
all nongovernment entities that have a prepaid capitated contract with AHCCCS, detailing
the percentage of monies spent in the previous contract year on direct
payments to providers for services and on
administrative costs, by category, to:
a)
the Joint Legislative Budget Committee;
b)
the Governor;
c)
the President of the Senate;
d)
the Speaker of the House of Representatives; and
e)
the
members of the Senate and House of Representatives Health and Human Services
Committees, or their successor committees.
2.
Requires
the report to include the percentage of monies spent on administrative costs
for each of the following:
a)
health care quality improvement activities;
b)
program integrity, including fraud, waste and abuse prevention;
c)
taxes, licenses and regulatory fees;
d)
community reinvestment; and
e)
all
other administrative activities.
3.
Becomes effective on the general effective date.
Amendments Adopted by
Committee of the Whole
1.
Requires AHCCCS, rather than each prepaid capitated contractor, to
submit an annual expenditure report aggregated for all nongovernment entities
with a prepaid capitated contract.
2.
Requires the report to include amounts spent on direct payments to
providers for services, rather than direct patient care.
3.
Outlines required administrative costs by category to be included in the
report.
Senate Action
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Prepared by Senate Research
March 3, 2026
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Current Bill Text
Read the full stored bill text
Chapter 0225 - 572R - S Ver of SB1399
Senate Engrossed
prepaid capitated
contractors; cost reports
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
CHAPTER 225
SENATE BILL 1399
AN
ACT
AMending title 36, chapter 29, article 1,
Arizona Revised Statutes, by adding section 36-2904.01; 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 36-2904.01, to read:
START_STATUTE
36-2904.01.
Prepaid capitated contracts; expenditures; annual report
On or before December 1
of each year, the administration shall annually report to the joint legislative
budget committee, the governor, the president of the senate, the speaker of the
House of representatives and the members of the senate and house of representatives
health and human services committees, or their successor committees,
in aggregate for all nongovernment entities that have a prepaid
capitated contract with the administration,
The
percentage of monies in the previous contract year:
1. that was spent on direct
payments to providers for services.
2. that was spent on administrative
costs
for each of the following:
(
a
) Health care
quality improvement administrative activities.
(
b
) Program
integrity, including fraud, waste and abuse prevention expenses.
(
c
) Taxes,
licenses and regulatory fees.
(
d
) Community
reinvestment.
(
e
) All other
administrative activities.
END_STATUTE
APPROVED BY THE GOVERNOR JUNE 22, 2026.
FILED IN THE OFFICE OF THE SECRETARY OF STATE JUNE 22, 2026.