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SB1628 - 572R - S Ver
Senate Engrossed
claims denial; prior
authorization; reporting
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SENATE BILL 1628
AN
ACT
amending title 20, chapter 15, article 1,
arizona revised statutes, by adding section 20-2512; amending section
20-3102, Arizona Revised Statutes; amending title 20, chapter 26, article 1,
arizona revised statutes, by adding section 20-3408; relating to
insurance.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Title 20, chapter 15, article 1,
Arizona Revised Statutes, is amended by adding section 20-2512, to read:
START_STATUTE
20-2512.
Health care services plans; claims denial practices; reporting
requirements; definitions
A. On or before July 1, 2027 and each
July 1 thereafter, a health care
services plan shall
report to the department on a form prescribed by the department the following
aggregated data that relates to the health care
services
plan's claims denial practices for the prior year:
1. The total number of claims
requests, including the total number of claims requests that were not submitted
electronically.
2. The total number of claims
requests that were
partially denied
and the total number of claims requests that were completely denied.
3. The total number of appeals that
were received
for all of the following levels of review:
(
a
) Initial
appeal.
(
b
) Voluntary
internal appeal.
(
c
) External
independent review.
(
d
) Expedited
medical review.
(
e
) Expedited
appeal.
(
f
) Expedited
external independent review.
4. The total number of adverse
determinations
that were partially reversed on appeal and
the total number of adverse determinations that were reversed on appeal.
5. The total number of claims that
were completely downcoded.
6. The top ten
inpatient
and top ten outpatient services
claims that were denied
in each of the following categories:
(
a
) Medical and
surgical procedures.
(
b
) Diagnostic
tests and diagnostic images.
(
c
) Behavioral
health services.
(
d
) Orthopedic
services.
7. The top five reasons why claims
requests were denied.
B. On or before October 31, 2027 and
each October 1 thereafter, the department shall:
1. Aggregate the data that is
collected under subsection A of this section into a standard
report. The report must separate each health care
services plan that submitted data by name and must be written in
easily understandable language.
2. Post the report on the
departments' publicly accessible website.
3. Maintain at least three years of
reports on the department's publicly accessible website.
4. Send a copy of the report to the
speaker of the house of representatives and the president of the senate.
C. The director may adopt rules to
implement this section.
D. For
the purposes of this section:
1. "Downcode"
means the unilateral alteration by a health care insurer of the level of
evaluation and management service code or other service code that was submitted
on a claim and that resulted in a lower payment.
2. "Health care services
plan" has the same meaning prescribed in section 20-3401.
END_STATUTE
Sec. 2. Section 20-3102, Arizona Revised
Statutes, is amended to read:
START_STATUTE
20-3102.
Timely payment of health care providers' claims; grievances
A. A health care insurer shall adjudicate any clean
claim from a contracted or noncontracted health care provider relating to
health care insurance coverage within thirty days after the health care insurer
receives the clean claim or within the time period specified by contract.
Unless there is an express written contract between the health care insurer and
the health care provider that specifies the period in which approved claims
shall be paid, the health care insurer shall pay the approved portion of any
clean claim within thirty days after the claim is adjudicated. If
the claim is not paid within the thirty-day period or within the time
period specified in the contract, the health care insurer shall pay interest on
the claim at a rate that is equal to the legal rate. Interest shall be
calculated beginning on the date that the payment to the health care provider
is due.
B. If the claim is not a clean claim and the health
care insurer requires additional information to adjudicate the claim, the
health care insurer shall send a written request for additional information to
the contracted or noncontracted health care provider, enrollee or third party
within thirty days after the health care insurer receives the
claim. The health care insurer shall notify the contracted or
noncontracted health care provider of all of the specific reasons for the delay
in adjudicating the claim. The health care insurer shall record the
date it receives the additional information and shall adjudicate the claim
within thirty days after receiving all the additional
information. The health care insurer shall also pay the approved
portion of the adjudicated claim within the same thirty-day period
allowed for adjudication or within the time period specified in the provider's
contract. If the health care insurer fails to pay the claim as
prescribed in this subsection, the health care insurer shall pay interest on
the claim in the manner prescribed in subsection A of this section.
C. A health care insurer shall not delay the payment
of clean claims to a contracted or noncontracted provider or pay less than the
amount agreed to by contract to a contracted health care provider without
reasonable justification.
D. A health care insurer shall not request
information from a contracted or noncontracted health care provider that does
not apply to the medical condition at issue for the purposes of adjudicating a
clean claim.
E. A health care insurer shall not request a
contracted or noncontracted health care provider to resubmit claim information
that the contracted or noncontracted health care provider can document it has
already provided to the health care insurer unless the health care insurer
provides a reasonable justification for the request and the purpose of the
request is not to delay the payment of the claim.
F. A health care insurer shall establish an internal
system for resolving payment disputes and other contractual grievances with
health care providers. The director may review the health care
insurer's internal system for resolving payment disputes and other contractual
grievances with health care providers. Each health care insurer
shall maintain records of health care provider
grievances. Semiannually each health care insurer shall provide the
director with a summary of all records of health care provider grievances
received during the prior six months. The records shall include at least
the following information:
1. The name and any identification number of the
health care provider who filed a grievance.
2. The type of grievance.
3. The date the insurer received the grievance.
4. The date the grievance was resolved.
G. On review of the records, if the director finds a
significant number of grievances that have not been resolved, the director may
examine the health care insurer.
H. This section does not require or authorize the
director to adjudicate the individual contracts or claims between health care
insurers and health care providers.
I. On or before
August
October
1 of each year, the director shall post a report on the
department's publicly accessible website that includes the information
prescribed in subsection F of this section for the prior fiscal year and that
includes:
1. The total number of grievances received.
2. The average time to resolve a grievance.
3. The percentage of grievances where a health care
insurer's decision was overturned.
J. Except in cases of fraud, a health care insurer
or contracted or noncontracted health care provider shall not adjust or request
adjustment of the payment or denial of a claim more than one year after the
health care insurer has paid or denied that claim. If the health
care insurer and health care provider agree through contract on a length of
time to adjust or request adjustment of the payment of a claim, the health care
insurer and health care provider must have the same length of time to adjust or
request adjustment of the payment of the claim. If a claim is
adjusted, neither the health care insurer nor the health care provider shall
owe interest on the overpayment or underpayment resulting from the adjustment,
as long as the adjusted payment is made or recoupment taken within thirty days
of the date of the claim adjustment.
K. This article does not apply to licensed health
care providers who are salaried employees of a health care insurer.
L. If a contracted or noncontracted health care
provider files a claim or grievance with a health care insurer that has changed
the location where providers were instructed to file claims or grievances, the
health care insurer shall, for ninety days following the change:
1. Consider a claim or grievance delivered to the
original location properly received.
2. Following receipt of a claim or grievance at the
original location, promptly notify the health care provider of the change of
address through mailed written notice or some other written communication.
M. This section does not preclude a health care
provider, with written informed consent of the patient, from collecting monies
for a medical service that is either:
1. Not covered under the insurance policy.
2. Medically necessary and a payment on the claim
was not made due to a denial on the basis of frequency or a disallowance on the
basis of frequency. For the purposes of this paragraph, a provider is limited
to the rates prescribed by that provider's fee schedule.
N. Any claim that is subject to article 2 of this
chapter is not subject to this article.
END_STATUTE
Sec. 3. Title 20, chapter 26, article 1,
Arizona Revised Statutes, is amended by adding section 20-3408, to read:
START_STATUTE
20-3408.
Health care services plans; prior authorization practices;
reporting requirements; rules
A. On or before July 1, 2027 and each
July 1 thereafter, a health care services plan shall report to the department
on a form prescribed by the department the following aggregated data that
relates to the health care services plan's prior authorization practices for
the prior year:
1. The total number of prior
authorization requests, including the total number of prior authorization
requests that were not submitted electronically.
2. The total number of prior
authorization requests that were
partially denied
and the total number of prior authorization requests that were
completely denied.
3. The total number of appeals that
were received
for all of the following levels of review:
(
a
) Initial
appeal.
(
b
) Voluntary
internal appeal.
(
c
) External
independent review.
(
d
) Expedited
medical review.
(
e
) Expedited
appeal.
(
f
) Expedited
external independent review.
4. The total number of adverse
determinations
that were partially reversed on appeal and
the total number of adverse determinations that were
completely
reversed on appeal.
5. The top ten
inpatient
and top ten outpatient services
prior authorization
requests that were denied in each of the following categories:
(
a
) Medical and
surgical procedures.
(
b
) Diagnostic
tests and diagnostic images.
(
c
) Behavioral
health.
(
d
) Orthopedic
services.
6. The top five reasons why prior
authorization requests were denied.
7. The average and median time that
elapsed between the submission of a request and a determination by the issuer
for standard prior authorizations.
8. The average and median time that
elapsed between the submission of a request and a determination by the issuer
for expedited prior authorizations.
B. On or before October 31, 2027 and
each October 1 thereafter, the department shall:
1. Aggregate the data that is
collected under subsection A of this section into a standard
report. The report must separate each health care services plan that
submitted data by name and must be written in easily understandable language.
2. Post the report on the
departments' publicly accessible website.
3. Maintain at least three years of
reports on the department's publicly accessible website.
4. Send a copy of the report to the
speaker of the house of representatives and the president of the senate.
C. The director may adopt rules to
implement this section.
END_STATUTE
Sec. 4.
Stakeholders meeting; report
A. On or before July 1,
2032, the department of insurance and financial institutions shall convene a
stakeholders meeting that includes health care insurers, health care services
plans, health care institutions that are regulated by the department of health
services, health care providers who are licensed under title 32, Arizona
Revised Statutes, businesses and consumers to determine the quality, relevance
and usefulness of the data that was reported pursuant to sections 20-2512
and 20-3408, Arizona Revised Statutes, as added by this act.
B. On
or before October 31, 2032, the department of insurance and financial
institutions shall submit a report to the governor, the president of the senate
and the speaker of the house of representatives with recommendations to amend
or repeal or to make no changes to, sections 20-2512 and 20-3408,
Arizona Revised Statutes, as added by this act.
Sec. 5.
Retroactivity
Section 20-3102, Arizona Revised
Statutes, as amended by this act, applies retroactively to from and after June
30, 2026.