Official Summary Text
SB1611 - 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. 1611
American Indian
health program; administration
Purpose
An emergency
measure that, beginning October 1, 2027, requires the Arizona Health Care Cost
Containment System (AHCCCS) to contract with an administrative services
organization to perform specified administrative functions for members enrolled
in the American Indian Health Program (AIHP).
Background
American Indians
and Alaska Natives (AI/AN) enrolled in AHCCCS or the Children's Health
Insurance Program may choose to receive coverage through the AIHP or an
AHCCCS-contracted managed care organization. Members who choose coverage under
the AIHP receive services under a fee-for-service model, with AHCCCS directly
administering coverage and paying registered providers for covered services. AHCCCS
covers behavioral health services, including mental health, substance use
treatment and crisis services, provided at Indian Health Service-covered Tribal
facilities or at an AHCCCS registered provider. Recipients do not need a
referral to receive behavioral health services. Under the AIHP, covered
services include:
1) inpatient services in a hospital or other facilities; 2) partial care; 3)
individual, group and family counseling and therapy; 4) emergency and crisis
services; 5) behavior management; 6) evaluation and diagnosis; 7) medicine and
monitoring of medicine; 8) psychosocial rehabilitation;
9) laboratory and radiology services; 10) screening; 11) emergency and
non-emergency transportation; and 12) limited respite care (
AHCCCS
AIHP Guide
).
The Joint
Legislative Budget Committee estimates that S.B. 1611 would generate state
costs for AHCCCS to contract out specified functions to an administrative
services organization, potentially in the tens of millions of dollars. JLBC
notes that costs may be partially offset if AHCCCS reduces staffing in affected
areas or if the contractor implements cost-containment or fraud-detection
measures (
JLBC
fiscal note
).
Provisions
1.
Requires AHCCCS, beginning October 1, 2027, to contract with a qualified
contractor or other entity to serve as the administrative services organization
for purposes of performing specified functions for members enrolled in the AIHP,
excluding services provided to AI/AN members through a tribal health program.
2.
Specifies that the contract must comply with all federal and state
requirements, including the protections for Indians, Indian health care
providers and Indian managed care entities.
3.
Requires AHCCCS to retain ultimate responsibility for administering the
AIHP, including fee-for-service rate setting
and
oversight of any administrative services organization contractor.
4.
Requires AHCCCS, as part of any request for proposals for an
administrative services organization, to require each offeror to demonstrate a
proven history of competency and experience in providing robust case management
and complaint services to AI/AN populations in coordination with tribal health
programs.
5.
Prohibits AHCCCS from eliminating the AIHP as a fee-for-service option
for eligible AI/AN members.
6.
Requires AHCCCS, before issuing any request for proposals for an
administrative services organization, to complete meaningful and timely tribal
consultation and urban confer regarding implementation of the administrative
services organization requirements and subsequently, within 30 days, submit any
necessary state plan amendment or waiver to the U.S. Centers for Medicare and
Medicaid Services.
7.
Requires
AHCCCS, before issuing any request for proposals for an administrative services
organization, to:
a)
transmit the proposed procurement strategy, minimum qualifications and
evaluation factors to the Senate and House of Representatives Health and Human
Services Committees, or their successor committees (HHS Committees); and
b)
receive,
thoughtfully consider and meaningfully and timely respond to written and oral
comments from committee members and the public, including tribal governments,
Indian health care providers and urban Indian organizations.
8.
Authorizes each federally recognized Indian tribe in Arizona to appoint
one nonvoting observer to the AHCCCS source-selection evaluation committee and
requires that each observer be a member of a different tribe.
9.
Specifies that the designated nonvoting observers may attend evaluation meetings,
review materials submitted by offerors, ask questions and make statements, but
may not score proposals, participate in final ranking or make or direct an
award decision.
10.
Requires
AHCCCS, after completing proposal evaluations and before executing a contract,
to transmit
a summary of evaluation results and
the proposed award recommendation to the Senate and House of Representatives
HHS Committees.
11.
Declares that the
administrative services organization requirements for the AIHP do not:
a)
transfer source-selection or contract-award authority from AHCCCS to the
Legislature, any legislative committee or any tribal government; or
b)
conflict
with the Arizona procurement code or any applicable federal procurement
requirement.
12.
Affirms
that AHCCCS remains responsible for awarding the contract and must comply with
all applicable state and federal procurement laws and regulations.
13.
Requires any AIHP
administrative arrangement to preserve:
a)
the rights of eligible AI/AN members to elect the AIHP fee-for-service
coverage;
b)
the rights of AI/AN members to voluntarily enroll in and disenroll from
a managed care organization consistent with federal law; and
c)
the
protections afforded to Indians and Indian health care providers under federal
law, including out-of-network access and appropriate payment requirements for
Indian health care providers.
14.
Requires
any entity procured to perform administrative functions for the AIHP to be
organized and operated as a qualified contractor.
15.
Specifies
that the administrative services organization's performance of program
integrity functions does not supersede the AHCCCS Office of Inspector General's
authority to investigate fraud.
16.
Requires
the administrative services organization and AHCCCS to establish a streamlined
provider screening and registration process to ensure only qualified providers
are issued a valid AHCCCS provider identification number and prohibits the
administrative services organization from requiring any additional
registration.
17.
Specifies
that AHCCCS and the administrative services organization are not prohibited
from monitoring providers to ensure compliance with applicable laws, rules and
policies.
18.
Prohibits
the administrative services organization from requiring prior authorization for
services provided to an AIHP member when the member is referred from a tribal
health program to a nontribal provider or facility.
19.
Prohibits
AHCCCS and the administrative services organization from requiring prior
authorization for services provided to an AIHP member by a nontribal provider
or facility in a manner that is different from the AHCCCS policy in effect on
January 1, 2026.
20.
Prohibits
any changes to prior authorization requirements or policy affecting the AIHP
from being implemented until after the quarterly tribal consultation.
21.
Requires
the administrative services organization to conduct its duties in a corrective,
efficient, competent, state-of-the-art and culturally informed manner.
22.
Requires the administrative
services organization, if an AIHP member receives services from a nontribal
health program due to a referral, to:
a)
coordinate care management and utilization management activities with
the tribal health programs, when appropriate; and
b)
facilitate communication regarding referrals, authorizations and claims
processing and payment issues.
23.
Prohibits
the administrative services organization from interfering with or overriding
the clinical determinations or care management decisions of a referring tribal
health program.
24.
Requires the administrative
services organization to establish an office of tribal relations and requires the
office to:
a)
coordinate and communicate with the federally recognized Indian tribes
in Arizona, tribal members and tribal health programs;
b)
serve as the primary point of contact between the administrative
services organization and tribal governments and tribal health programs; and
c)
participate
in tribal consultation and stakeholder meetings as requested by tribal
governments or AHCCCS.
25.
Requires
AHCCCS and the administrative services organization to consult quarterly with
the Governor or the Governor's designee, tribal health programs, representatives
of Arizona's federally recognized Indian tribes, AHCCCS providers and AIHP
members to evaluate the administrative services organization's performance and
data analytics gathered during the previous quarter to ensure tribal members
are receiving quality, safe and appropriate care.
26.
Defines
administrative services organization
as a Medicaid managed care
organization that is a qualified contractor or other qualified entity that
contracts with AHCCCS to perform administrative functions, including program
integrity, care management, provider support, quality improvement, data
analytics and claims payment.
27.
�Defines
American Indian health program
as the fee-for-service program operated
by AHCCCS for eligible AI/AN members as required under federal law to preserve
a fee-for-service option for AI/AN beneficiaries, excluding services provided
to AI/AN members through a tribal health program.
28.
Defines
tribal health
program
as any of the following:
a)
a tribal facility that is operated by an Indian tribe or tribal
organization and that is authorized to provide services pursuant to P.L.
93-638, as amended;
b)
any health care provider or facility that is operated by the Indian
Health Service;
c)
a tribal health program or facility that is operated by a federally
recognized Indian tribe in Arizona;
d)
any health care provider or facility that is owned, operated or governed
by a federally recognized Indian tribe in Arizona;
e)
a tribal regional behavioral health authority;
f)
an urban Indian organization that is contracted or receives grants to
provide services pursuant to 25 U.S.C. ch. 18; or
g)
a
tribal health facility that is operated under an intergovernmental agreement
between two or more Indian tribes in Arizona.
29.
Defines
terms.
30.
Contains
a statement of legislative finding.
31.
Becomes
effective on the signature of the Governor, if the emergency clause is enacted.
Amendments Adopted by
Committee
1.
Excludes from the oversight of the administrative services organization
any services provided through the IHS or a tribal facility.
2.
Requires the Senate President and the Speaker of the House of
Representatives to designate eleven nonvoting observers to the AHCCCS
source-selection evaluation committee, as specified, rather than individual
legislators designated by the chairs of the HHS Committees.
3.
Specifies that the administrative services organization's performance of
program integrity functions does not supersede the AHCCCS Office of Inspector
General's authority to investigate fraud.
4.
Allows AHCCCS to respond to written and oral comments received from
committee members and the public.
5.
Specifies that source-selection and contract-award authority for the
AIHP administrative services organization are not transferred from AHCCCS to
any tribal government.
6.
Defines terms.
Amendments Adopted by
Committee of the Whole
1.
Excludes services provided to AI/AN members through a tribal health
program from the oversight of the administrative services organization.
2.
Requires AHCCCS, as part of any request for proposals for an AIHP
administrative services organization, to require each offeror to demonstrate a
proven history of competency and experience in providing robust case management
and complaint services to AI/AN populations in coordination with tribal health
programs.
3.
Requires AHCCCS, before issuing any request for proposals for an
administrative services organization, to complete meaningful and timely tribal
consultation and urban confer regarding implementation and subsequently,
within 30 days, submit any necessary state plan amendment
or waiver
to the U.S. Centers for Medicare and Medicaid Services.
4.
Replaces legislative appointments of observers to the AHCCCS
source-selection committee with appointments by each federally recognized
Indian tribe in Arizona and requires each observer to be a member of a
different tribe.
5.
Requires, rather than allows, AHCCCS to respond to written and oral
comments received from committee members and the public.
6.
Requires the administrative services organization and AHCCCS to
establish a streamlined provider screening and registration process to ensure
only qualified providers are enrolled and prohibits the administrative services
organization from requiring any additional registration.
7.
Prohibits the administrative services organization from requiring prior
authorization for services provided to an AIHP member when the member is
referred from a tribal health program to a nontribal provider or facility.
8.
Prohibits AHCCCS and the administrative services organization from
requiring prior authorization for services provided to an AIHP member by a
nontribal provider or facility in a manner that is different from the AHCCCS
policy in effect on January 1, 2026.
9.
Prohibits any changes to prior authorization requirements or policy
affecting the AIHP from being implemented until after the quarterly tribal
consultation.
10.
Requires the administrative
services organization, if an AIHP member receives services from a nontribal
health program due to a referral, to:
a)
coordinate care management and utilization management activities with
the tribal health programs, when appropriate; and
b)
facilitate
communication regarding referrals, authorizations and claims processing and
payment issues.
11.
Requires
the administrative services organization to establish an office of tribal
relations and outlines duties of the office.
11.
Requires
AHCCCS and the administrative services organization to consult quarterly with
the Governor or the Governor's designee, tribal health programs,
representatives of Arizona's federally recognized Indian tribes, AHCCCS
providers and AIHP members to evaluate the administrative services
organization's performance and data analytics gathered during the previous
quarter to ensure tribal members are receiving quality, safe and appropriate
care.
13.
Modifies
defined terms.
14.
Makes
technical and conforming changes.
Senate Action
HHS ����� 2/3/26������ DPA ������� 5-2-0
Prepared by Senate Research
March 10, 2026
MM/hk
Current Bill Text
Read the full stored bill text
SB1611 - 572R - S Ver
Senate Engrossed
American Indian
health program; administration
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SENATE BILL 1611
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.
American Indian health program; administrative services contract;
legislative review; administrative services organization; duties; office of
tribal relations; definitions
A. Beginning October 1, 2027, the
administration shall contract with a qualified contractor or other qualified
entity to serve as the administrative services organization and to perform
the functions
prescribed in subsection i
of this section for members enrolled in the American Indian health
program
, not including services provided to American
Indian or Alaska native members through a tribal health program.� The contract
must comply with all applicable federal and state requirements, including the
protections for Indians, Indian health care providers and Indian managed care
entities pursuant to 42 Code of Federal Regulations section 438.14.
B. The administration shall retain
ultimate responsibility for administering the American Indian health program,
including fee
-for
-service
rate setting and oversight of any administrative services organization
contractor, and may not eliminate the American Indian health program as a fee
-for
-service option for eligible
American Indian and Alaska native members.
C. As part of any request for
proposals issued by the administration for an administrative services organization
pursuant to this section, the administration shall require each offeror to
demonstrate a proven history of competency and experience in providing robust
case management AND compassionate, quality and compliant services to American
Indian and Alaska native populations and in coordinating with tribal health
programs.
D. Before issuing any request for
proposals to procure an administrative services organization pursuant to
subsection A of this section:
1. The administration shall complete
meaningful and timely tribal consultation and urban confer regarding the
implementation of this section and, within thirty days after completing the
tribal consultation and urban confer, shall submit any state plan amendment or
waiver to the centers for medicare and medicaid services.
2. Notwithstanding any law to the
contrary:
(
a
) The
administration shall transmit the proposed procurement strategy, minimum
qualifications and evaluation factors to the senate and house of
representatives health and human services committees, or their successor
committees.
(
b
) The
administration shall receive,
thoughtfully
consider
and meaningfully and timely
respond to written and oral comments from committee members and the
public, including tribal governments, Indian health care providers and urban
Indian organizations.
E. Notwithstanding any law to the
contrary, for each procurement described in subsection d of this section:
1. Each federally recognized Indian
tribe in this state may appoint one nonvoting observer
to
the source
-selection evaluation committee convened
by the administration. Each observer must be a member of a different federally
recognized Indian tribe in this state.
2. The twenty-two nonvoting
tribal member observers designated pursuant to paragraph 1 of this subsection
may attend evaluation meetings, review materials submitted by offerors, ask
questions and make statements during the evaluation meetings but may not score
proposals, participate in final ranking or make or direct an award decision.
F. Notwithstanding any law to the
contrary, after the completion of proposal evaluations and before the execution
of any contract described in subsection A of this section, the administration
shall transmit to the senate and house of representatives health and human
services committees, or their successor committees, a summary of evaluation
results and the proposed award recommendation.
G. This section does not:
1. Transfer source-selection or
contract-award authority from the administration to the legislature
, any legislative committee
or any tribal
government.
2. Conflict with the Arizona
procurement code or any applicable federal procurement requirement. The
administration remains the awarding agency and shall comply with all applicable
state and federal procurement laws and regulations.
H. Any administrative arrangement
authorized under this section must preserve:
1. The right of eligible American
Indian and Alaska native members to elect the American Indian health program
fee
-for
-service
coverage.
2. The right of American Indian and
Alaska native members to voluntarily enroll in and disenroll from a managed
care organization consistent with federal law.
3. The protections afforded to
Indians and Indian health care providers under 42 Code of Federal Regulations
section 438.14, including out-of-network access and appropriate
payment requirements for Indian health care providers.
I. Any entity that is procured
pursuant to this section to perform program integrity
,
care management
, provider support, quality improvement
and data analytics functions
and claims payment for the
American Indian health program shall be organized and operated as a qualified
contractor.
the administrative services organization's
performance of program integrity functions does not supersede the duties and
responsibilities of the administration's office of inspector general
to investigate fraud.
J. The administrative services
organization and the administration shall establish a streamlined provider
screening and registration process to ensure THAT only qualified providers are
issued a valid Arizona health care cost containment system provider
identification number. The administrative services organization may
not require any additional provider registration. This subsection
does not prohibit the administration or the administrative services
organization from monitoring providers to ensure compliance with applicable
laws, rules and policies.
K. The
administrative services organization is prohibited from requiring prior
authorization for any services being provided to an American Indian health
program member when the member is being referred from a tribal health program
to a nontribal health provider or facility. The administration and the
administrative services organization may not require prior authorization for
any services being provided to an American Indian health program member by a
nontribal health provider or facility in a manner that is different from the
Administration's policy in effect on January 1, 2026. Any changes to
prior authorization requirements or policy that affect the American Indian
health program may not be implemented until after the quarterly tribal consultation
required by subsection N of this section.
L. The administrative services
organization:
1. Shall conduct its duties in a
manner that is corrective in nature, efficient, competent, state-of-the-art and
culturally informed.
2. If an American Indian health
program member receives services from a nontribal HEALTH program pursuant to a
referral from a tribal health program, shall:
(
a
) When
appropriate, coordinate care management and utilization management activities
with the tribal health programs.
(
b
) Facilitate
communication regarding referrals, authorizations AND claims processing and
payment issues.
3. May not interfere with or override
the clinical determinations or care management decisions of the referring
tribal health program.
M. The administrative services
organization shall establish an office of tribal relations, which shall:
1. Coordinate and communicate with
the federally recognized Indian tribes in this state, tribal members and tribal
HEALTH programs.
2. Serve as the primary point of
contact between the administrative services organization and tribal governments
and tribal health programs.
3. Participate in tribal consultation
and stakeholder meetings as requested by tribal governments or the
administration.
N. The administration and the
administrative services organization shall consult quarterly with the governor
or the governor's designee, tribal health programs, representatives of the
federally recognized Indian tribes in this state, Arizona health care cost
containment system providers and American Indian health program members to
evaluate the performance of the administrative services organization and data
analytics gathered from the preceding quarter by the parties to ensure that
tribal members are receiving quality, safe and appropriate care.
O. For the purposes of this section:
1. "Administrative services
organization" means a medicaid managed care organization that is a
qualified contractor or other qualified entity that contracts with the
administration to perform administrative functions, including program
integrity, care management, provider support, quality improvement
, data analytics
and claims payment.
2. "American Indian health
program"
:
(
a
) means the
fee
-for
-service program
operated by the administration for eligible American Indian and Alaska native
members as required under federal law to preserve a fee
-for
-service option for American Indian and Alaska native
beneficiaries.
(
b
) Does not
include services provided to American Indian or Alaska native members through a
tribal health program
.
3. "Care management" means
the coordination of a member's health care services to ensure medically
necessary and appropriate care.
4. "data analytics" means
the collection, integration, analysis and reporting of program claims and
provider and member data to support program operations, decision-making
and oversight.
5. "Program integrity"
means functions designed to prevent, detect and investigate fraud, waste or
abuse and to recover improper payments in the administration or delivery of
covered services.
6. "provider support"
includes:
(
a
) Provider
education, training and technical assistance.
(
b
) Assistance
with claims submission and billing issues.
(
c
) Communication
of program policies, procedures and updates.
7. "Qualified contractor"
or "other qualified entity" means an entity that meets all applicable
federal and state requirements to contract with the administration as a
medicaid managed care organization, administrative services organization or
similar entity.
8. "Quality improvement"
means measuring, monitoring and improving the quality, safety and outcomes of
health care services.
9. "Tribal health program"
means any of the following:
(
a
) A tribal
facility that is operated by an Indian tribe or tribal organization and that is
authorized to provide services pursuant to Public Law 93-638, as amended.
(
b
) Any HEALTH
care provider or facility that is operated by the Indian health service.
(
c
) A tribal
HEALTH program or facility that is operated by a federally recognized Indian
tribe in this state.
(
d
) Any HEALTH
care provider or facility that is owned, operated or governed by a federally
recognized Indian tribe in this state.
(
e
) A tribal
regional behavioral health authority.
(
f
) An Urban
Indian organization that is contracted or that receives grants to provide
services pursuant to 25 United States Code chapter 18.
(
g
) A tribal
HEALTH facility that is operated under an intergovernmental agreement between
two or more Indian tribes in this state.
END_STATUTE
Sec. 2.
Legislative
findings
The legislature finds and determines
that immediate implementation of this act is necessary to strengthen program
integrity and care management for American Indian and Alaska native members of
the Arizona health care cost containment system, to protect those members from
fraud and abuse and to preserve the public peace, health and safety.
Sec. 3.
Emergency
This act is an emergency measure that
is necessary to preserve the public peace, health or safety and is operative
immediately as provided by law.