SB1853 • 2026

health care; 2026-2027.

SB1853 - health care; 2026-2027.

Budget Healthcare Labor Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: David C. Farnsworth
Last action: 2026-06-11
Official status: Senate committee of the whole
Effective date: Not listed

Plain English Breakdown

Using official source text because the generated explanation was unavailable or could not be confirmed against the official bill text.

health care; 2026-2027.

SB1853 - 572R - Senate Fact Sheet Assigned to ATT�� FOR COMMITTEE ARIZONA STATE SENATE Fifty-Seventh Legislature, Second Regular Session FACT SHEET FOR S.B.

What This Bill Does

SB1853 - 572R - Senate Fact Sheet Assigned to ATT�� FOR COMMITTEE ARIZONA STATE SENATE Fifty-Seventh Legislature, Second Regular Session FACT SHEET FOR S.B.
1853 health care; 2026-2027.
Purpose Makes statutory and session law changes relating to health care necessary to implement the FY 2027 state budget.
Background The Arizona Constitution prohibits substantive law from being included in the general appropriations, capital outlay appropriations and supplemental appropriations bills.

Limits and Unknowns

This entry is temporarily using official source text because the generated explanation could not be confirmed against the official bill text during the last sync.

Bill History

2026-06-11 Senate
Senate committee of the whole
2026-06-10 Senate
Senate minority caucus
2026-06-10 Senate
Senate majority caucus
2026-06-10 Senate
Senate second read
2026-06-09 Senate
Senate Rules: PFC
2026-06-09 Senate
Senate Appropriations, Transportation and Technology: DP
2026-06-09 Senate
Senate first read

Official Summary Text

SB1853 - 572R - Senate Fact Sheet

Assigned to
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COMMITTEE

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

FACT SHEET FOR
S.B. 1853

health
care; 2026-2027.

Purpose

Makes statutory and session law changes relating to health care necessary
to implement the FY 2027 state budget.

Background

The Arizona
Constitution prohibits substantive law from being included in the general
appropriations, capital outlay appropriations and supplemental appropriations
bills. However, it is often necessary to make statutory and session law changes
to effectuate the budget. Thus, separate bills called budget reconciliation
bills (BRBs) are introduced to enact these provisions. Because BRBs contain
substantive law changes, the Arizona Constitution provides that they become
effective on the general effective date, unless an emergency clause is enacted.

S.B. 1853
contains the budget reconciliation provisions for changes relating to health
care.

Provisions

Opioid
Settlement Funds

Prohibits a city, town or county from using monies received through the
final One Arizona Distribution of Opioid Settlement Funds
Agreement
to provide, or grant monies to a nongovernmental organization to
provide, safer smoking equipment.

Stipulates that, if a city, town or county exceeds its expenditure limit
due to spending monies received from the final One Arizona Distribution of
Opioid Settlement Funds Agreement, any penalty must be reduced by the amount of
settlement funds spent but may not be less than $0.

Applies the restrictions on use of opioid settlement funds to contracts
entered into or renewed on or after December 31, 2026.

Defines
safer smoking equipment
as sterile, durable and
specialized tools intended to reduce the risks associated with inhaling drugs,
such as cocaine base, methamphetamine or opioids.

Arizona Rural
Health Transformation Fund (RHT Fund)

Establishes the RHT Fund, consisting of monies received through the
Rural Health Transformation Program.

Requires the Arizona Health Care Cost Containment System (AHCCCS) to
administer the Fund.

Specifies that monies in the RHT Fund are continuously appropriated.

Requires
AHCCCS, before the Executive Branch may spend any monies in the RHT Fund, to:

hold three public meetings in each of the largest metropolitan areas in
Northern, Central and Southern Arizona to receive input and feedback regarding
how the monies should be spent; and

submit
a report to the Joint Legislative Budget Committee (JLBC) detailing its
expenditure plan for monies in the RHT Fund.

Health
Insurance Trust Fund Oversight Board (Board)

Establishes
the Board, consisting of the following members:

the Assistant Director of the Arizona Department of Administration
(ADOA) Benefit Services Division, to serve as Chairperson;

the Director of ADOA or the Director's designee;

the Director of the Department of Insurance and Financial Institutions
or the Director's designee;

one member appointed by the Senate President and one member appointed by
the House Speaker, each of whom must:

serve a two-year term or at the pleasure of the appointing authority;

ii.

have
at least three years of experience in the health care industry in Arizona; and

iii.

not be a registered lobbyist.

10.

Requires the Board to:

approve all health insurance benefit programs offered to state officers
and employees;

develop and maintain a strategic plan for the state health plan;

approve premium rates, copayments, deductibles and coinsurance
percentages and maximums for the plan;

beginning in plan year 2028, approve any requests for proposal contract
of more than $3,000,000 that are entered into by ADOA for the state health
plan;

consult with ADOA as required by law and at the request of ADOA; and

design policies that seek to, by plan year 2035, achieve:

a premium cost sharing of 85 percent to be paid by the employer and 15
percent to be paid by the employee for medical premiums;

ii.

a
consistent reserve in the Special Employee Health Insurance Trust Fund (HITF)
totaling twice the amount of incurred, but not reported, claims payable from
funded health benefit programs; and

iii.

optimal cross subsidization of retirees.

11.

Requires, by July 1, 2027,
and each subsequent year, the Board to approve and ADOA to submit an annual
report to the Governor, Senate President, House Speaker, Chairpersons of the
Appropriations Committees of the Senate and House of Representatives and JLBC Staff,
that includes:

the Board's strategic plan for the state health plan;

the annual activities of the Board;

the actuarial assumptions and description of the methodology used to set
benefit premiums and reserve balance targets for the current plan year;

an analysis of the actuarial soundness of the health insurance benefit
plan for the previous and current plan years, as prescribed;

a preliminary estimate of the premiums and reserve balance targets for
the next plan year, including the actuarial assumptions and a description of
the methodology used; and

the required and actual performance standards for the prior plan year
for the contracted health plans, including indemnity health insurance, hospital
and medical service plans, dental plans and health maintenance organizations.

12.

Requires ADOA to make the
report available to officers and employees who have paid premiums under any
insurance plan from which monies were received for deposit in the HITF since
the inception of the state health and accident insurance plan or since ADOA
submitted the most recent annual report, whichever is greater.

13.

Specifies that appointed
Board members are eligible for reappointment.

14.

Prohibits any person from
serving on the Board while also holding an elected office position.

15.

Subjects members of the
Board to state laws governing conflicts of interest.

16.

Requires the Board to meet
at least twice annually.

17.

Allows meetings to be held
at the call of the Chairperson or a majority of the Board.

18.

Specifies that three members
of the Board constitute a quorum for purposes of conducting business.

19.

Allows Board meetings to be
held virtually.

20.

Specifies that Board members
are ineligible to receive compensation or reimbursement of expenses.

21.

Requires the Board to
develop requirements for sharing anonymized and aggregated claim and trend data
with employers that participate in health benefit programs funded by the HITF.

22.

Adds the Board to the list
of entities required to receive insurance provider claims data and
recommendations for legislative action from the Director of ADOA.

23.

Repeals ADOA reporting
requirements relating to HITF.

24.

Exempts the Board from
statutory termination and continuation requirements.

AHCCCS �
Eligibility and
Enrollment

25.

Requires AHCCCS to review
information provided by the Arizona Lottery Commission and the Arizona Department
of Gaming to identify members of households who have won substantial lottery or
gambling winnings, including online gambling winnings, and incorporate the
information into eligibility determinations.

26.

Requires AHCCCS to:

receive and review death records information from DHS concerning members
and to adjust system eligibility accordingly; and

review information indicating a change in a member's circumstances that
may affect eligibility, including potential changes in residency identified
through out-of-state enrollment in another state's Medicaid program, Temporary
Assistance for Needy Families program, or Supplemental Nutrition Assistance
Program or through an out-of-state death record.

27.

Requires AHCCCS, beginning
January 1, 2027, to comply with applicable federal laws and regulations for all
eligibility redeterminations under a state plan or waiver.

28.

Requires AHCCCS to receive
and review information from the Department of Economic Security indicating a
change in circumstances that may affect eligibility, including changes to
unemployment benefits, employment status or wages.

29.

Prohibits AHCCCS from:

accepting self-attestation of residency without independent verification
before enrollment, to the extent allowed by federal law; and

accepting eligibility determinations from a federal exchange.

30.

Specifies that AHCCCS may
accept assessments from a federal exchange but must independently verify
eligibility and make eligibility determinations.

31.

Requires AHCCCS to review a
member�s eligibility if it receives reliable information indicating a change in
circumstances that may affect eligibility.

32.

Allows AHCCCS to:

execute a memorandum of understanding with any other state department in
Arizona for information required to be shared in accordance with the
eligibility verification requirements; and

contract
with one or more independent vendors to provide additional data or information
that may indicate a change in circumstances and affect an individual�s
eligibility.

33.

Requires
AHCCCS, by April 1, 2027, to submit to the U.S. Centers for Medicare and
Medicaid Services (CMS), any waiver requests necessary to implement eligibility
verification requirements.

34.

Requires
AHCCCS to request approval from CMS for a Section 1115 waiver to allow AHCCCS
to eliminate mandatory hospital presumptive eligibility and restrict
presumptive eligibility determinations to children and pregnant women
eligibility groups.

35.

Requires
AHCCCS, if approval for the Section 1115 waiver is denied, to resubmit a
subsequent request for approval within 12 months after each denial.

36.

Prohibits
AHCCCS, unless required by federal law, from designating itself as a qualified
health entity for the purpose of making presumptive eligibility determinations
or for any purpose not expressly authorized by state law.

37.

Requires a qualified
hospital, when making presumptive eligibility determinations, to do all of the
following:

notify AHCCCS of each presumptive eligibility determination within five
working days after the date the determination is made;

assist individuals who are determined presumptively eligible for AHCCCS
coverage with completing and submitting a full application for AHCCCS
eligibility;

notify each applicant in writing and on all relevant forms with plain
language and large print that if the applicant does not file a full application
for coverage eligibility with AHCCCS before the last day of the following
month, presumptive eligibility coverage will end on the last day of the
following month; and

notify each applicant that, if the applicant files a full application
for coverage eligibility with AHCCCS before the last day of the following
month, presumptive eligibility coverage will continue until an eligibility
determination is made on the application that is filed.

38.

Requires AHCCCS to apply the
following standards to establish and ensure the accurate presumptive
eligibility determinations are made by each qualified hospital:

whether the qualified hospital submitted to AHCCCS the presumptive
eligibility card within five working days after the determination date;

whether a full application for system eligibility was received by AHCCCS
before the expiration of the presumptive eligibility period; and

whether the individual was found to be eligible under the system, if a
full application was received by AHCCCS.

39.

Requires AHCCCS to notify a
qualified hospital in writing within five working days after AHCCCS determines
that the hospital fails to meet the established standards for any presumptive
eligibility determination made by the hospital.

40.

Requires the determination
notice to include:

for a first violation:

a description of the standard that was not met and an explanation of why
it was not met; and

ii.

confirmation
that a second finding will require that all applicable hospital staff
participate in mandatory training by AHCCCS on hospital presumptive eligibility
rules;

for a second violation:

a description of the standard that was not met and an explanation of why
it was not met;

ii.

confirmation
that all appliable hospital staff will be required to participate in a
mandatory training by AHCCCS on hospital presumptive eligibility rules,
including the date, time and location of the training as determined by AHCCCS;

iii.

a description of
available appeals procedures by which a qualified hospital may dispute the
findings and remove the finding from the qualified hospital�s record by
providing clear and convincing evidence that the standard was met; and

iv.

confirmation
that, if the qualified hospital subsequently fails to meet any of the standards
for presumptive eligibility for any determination, the qualified hospital will
no longer by qualified to make presumptive eligibility determinations under the
system; and

for a third violation:

a description of the standard that was not met and an explanation of why
it was not met;

ii.

a
description of available appeals procedures by which a qualified hospital may
dispute the finding and remove the finding from the hospital�s record by
providing clear and convincing evidence that the standard was met; and

iii.

confirmation
that, effective immediately, the hospital is no longer qualified to make
presumptive eligibility determinations under the system.
�

41.

Repeals the revised AHCCCS
eligibility determination and enrollment requirements on July 1, 2027.

AHCCCS
� Miscellaneous

42.

Requires,
subject to federal approval of a Section 1115 waiver, AHCCCS and its
contractors, in FYs 2027 through 2029, to provide pilot coverage for
traditional healing services at urban Indian health organizations if:

the member qualifies for services through the Indian Health Service or a
tribal facility; and

the services are delivered by or through an urban Indian organization.

43.

Allows the Director of
AHCCCS to take any administrative action necessary to implement coverage of
traditional healing services.

44.

Repeals AHCCCS coverage of
traditional healing services through urban Indian organizations on January 1,
2029.

45.

Continues to require AHCCCS
to prepare an annual report regarding the costs, aggregate spending on and
aggregate utilization of mental health medications, including antipsychotics,
antidepressants, anxiolytics, stimulants and sedative hypnotics, and submit it
to the:

Governor;

Chairpersons of the Health and Human Services Committees of the Senate
and House of Representatives, or their successor committees;

Director of JLBC;

Director of the Governor's Office of Strategic Planning and Budgeting;
and

Secretary of State.

46.

Requires
the AHCCCS report on the costs and utilization of mental health medications to
include the:

aggregate gross amount spent for each mental health medication class;

annual aggregate net amount spent for each mental health medication
class after rebates, without disclosing any information about
manufacturer-negotiated supplemental rebate agreements for any specific drug;
and

average
annual cost by class for generic and nongeneric mental health medications.

47.

Requires the AHCCCS report
on the costs and utilization of mental health medications, for antipsychotic
and antidepressant medications, without disclosing any information about
manufacturer-negotiated supplemental rebate agreements that could compromise the
competitive or proprietary nature of the agreements, to include the:

total number of prior authorizations submitted for nonpreferred
antipsychotic and antidepressant medications;

percentage of prior authorization approvals and denials;

generic antipsychotic and antidepressant medication utilization
percentages; and

total
amount of antipsychotic and antidepressant medication claims.

48.

Continues
to require AHCCCS to transfer to the counties any excess monies necessary to
comply with the federal Patient Protection and Affordable Care Act, regarding
the counties' proportional share of the state's contribution.

49.

Continues
to allow AHCCCS, for the contract year beginning October 1, 2026, and ending on
September 30, 2027, to extend risk contingency rate settings for all managed
care organizations (MCOs) and funding for all MCO administrative funding levels
imposed for the contract year beginning October 1, 2010, and ending September
30, 2011.

50.

Exempts AHCCCS from rulemaking requirements in FY 2027 for purposes of adopting
policies and rules related to service frequency or hour limitations for covered
services.

51.

Exempts
AHCCCS from rulemaking requirements in FY 2027, retroactive to July 1, 2026,
for purposes implementing the hospital assessment.

52.

Requires
AHCCCS to provide notice and at least 30 days for public comment before
implementing policies and rules related to service frequency or hour
limitations.

53.

Declares
the Legislature's intent that AHCCCS implement a Medicaid program within the
available appropriation for FY 2027.

Alzheimer's
Disease State Plan

54.

Designates
the Department of Health Services (DHS) as the lead state agency to address
Alzheimer's disease and related forms of dementia.

55.

Requires the Director of DHS
to establish a dementia services program within DHS that:

facilitates the coordination of programs relating to Alzheimer's disease
and related forms of dementia in all state agencies;

facilitates the coordination, review, publication and implementation of
and updates to the plan;

applies for public health funding and grants related to Alzheimer's
disease and related forms of dementia; and

incorporates
evidence-based brain health strategies into relevant DHS-led public health
programs.

56.

Requires
DHS to develop a plan that assesses the current and future impact of
Alzheimer's disease and related forms of dementia on the state.

57.

Requires the plan to assess
and identify relevant gaps in:

existing state services and resources that address the needs of persons
living with Alzheimer's disease or a related form of dementia and the persons'
caretakers;

the needs of persons who have Alzheimer's disease or a related form of
dementia and the persons' caregivers;

the state's public and private health systems, workforce and clinical
capacity and capability to provide effective detection, diagnosis and treatment
of Alzheimer's disease or a related form of dementia; and

the state's public and private nonmedical care and support services for
persons living with Alzheimer's disease or a related form of dementia and the
persons' caregivers.

58.

Requires the plan to provide
strategic recommendations with measurable goals for state action to do all of
the following for persons living with Alzheimer's disease or a related form of
dementia:

improve access to care, support, diagnostics and treatment;

improve the quality of dementia care, including crisis response, health
care systems,

long-term care and in-home care;

advance risk reduction and early detection awareness and brain health;

improve caregiver support, care planning and care coordination; and

improve the collection, availability and use of dementia-related data by
state agencies.

59.

Requires DHS to conduct
stakeholder engagement sessions at least once each calendar year to solicit
input on the plan.

60.

Requires DHS, regarding the
stakeholder engagement sessions, to:

seek feedback from and collaborate with persons who have Alzheimer's
disease or a related form of dementia, direct caregivers and public, private
and nonprofit organizations focused on Alzheimer's care services, research,
advocacy, health services and caregiver support;

at least 30 days before each engagement session, provide public notice
of the session, including the date, time, location or virtual access
information, a summary agenda and instructions for submitting written comments;

ensure meaningful participation by stakeholders statewide, including
rural and underserved communities, and provide reasonable accommodations and
language access; and

accept written comments for at least 14 days following each engagement
session.

61.

Requires DHS to convene or
designate an advisory council or working group to assist in planning,
conducting and evaluating stakeholder engagement and plan implementation,
review and updates.

62.

Specifies that membership of
the advisory council or working group must reflect the diversity of the
outlined stakeholders.

63.

Requires DHS, by October 1,
2027, and at least every three years thereafter, to update and submit the plan
to the Governor, the President of the Senate (Senate President) and the Speaker
of the House of Representatives (House Speaker) and provide a copy to the
Secretary of State.

64.

Requires DHS to publish the
plan on its public website.

65.

Repeals DHS dementia and
Alzheimer's disease program requirements on July 1, 2027.

Arizona
Long Term Care System (ALTCS)

66.

Outlines the following FY
2027 county contributions for ALTCS:

County

Contribution Amount

Apache

$792,400

Cochise

$8,055,900

Coconino

$2,378,900

Gila

$3,365,400

Graham

$2,320,400

Greenlee

$138,200

La Paz

$756,100

Maricopa

$298,895,000

Mohave

$12,022,500

Navajo

$3,279,800

Pima

$68,282,000

Pinal

$19,662,800

Santa Cruz

$3,204,100

Yavapai

$8,793,400

Yuma

$13,867,000

67.

Directs the State Treasurer
to collect from the counties the difference between the total contribution and
the counties' share of the state's actual contribution, if the overall cost for
ALTCS exceeds the amount specified in the FY 2027 General Appropriations Act.

68.

Requires the counties' share
of the state's contribution to comply with any federal maintenance of effort
requirements.

69.

Requires the Director of
AHCCCS to notify the State Treasurer of the counties' share of the state's
contribution and report the amount to the Director of the JLBC.

70.

Directs the State Treasurer
to:

withhold
from any other monies payable to a county from any available state funding
source, excluding the Highway User Revenue Fund (HURF), an amount necessary to
fulfill that county's contribution requirement; and

deposit
the withheld amounts and amounts paid by counties into the ALTCS Fund.

Disproportionate
Share Hospital (DSH) Payments

71.

Establishes the FY 2027 DSH
payments as follows:

$28,474,900
for the Arizona State Hospital (ASH), of which the federal portion is deposited
in the state General Fund (state GF); and

$884,800
for private qualifying DSHs, which are hospitals that meet the mandatory
definition of
qualifying DSHs
as defined by the federal Social Security
Act (SSA), or DSHs that are located in Yuma County and contain at least 300
beds.

72.

Outlines the following
requirements once AHCCCS files a claim with the federal government and receives
federal financial participation based on the amount certified by ASH:

if
the certification is for an amount less than $28,474,900, AHCCCS must notify
the Governor, the Senate President and the House Speaker and must deposit the
entire amount of federal financial participation in the state GF; and

requires
the certified public expense (CPE) form to contain both the total amount of
qualifying DSH expenditures and the amount limited by the SSA.

73.

Stipulates that, after DSH
payment distributions are made, the allocation of DSH payments designated to
political subdivisions, tribal governments and universities must be provided in
the following order of priority to qualifying private hospitals located in a
county with a population of:

fewer
than 400,000 persons;

at
least 400,000 but fewer than 900,000 persons; and

900,000
persons or more.

74.

Requires
ASH, by March 31, 2027, to provide a CPE form for qualifying DSH expenditures
to AHCCCS.

75.

Continues
to require AHCCCS to assist ASH in determining the amount of qualifying DSH
expenditures.

County
Acute Care

76.

Outlines the following FY
2027 county acute care contributions:

County

Contribution Amount

Apache

$268,800

Cochise

$2,214,800

Coconino

$742,900

Gila

$1,413,200

Graham

$536,200

Greenlee

$190,700

La Paz

$212,100

Maricopa

$14,417,300

Mohave

$1,237,700

Navajo

$310,800

Pima

$14,951,800

Pinal

$2,715,600

Santa Cruz

$482,800

Yavapai

$1,427,800

Yuma

$1,325,100

77.

Requires the State
Treasurer, if a county does not provide funding as specified, to:

subtract
the amount owed by the county from any payments required to be made by the
State Treasurer to the county plus interest on that amount, retroactive to the
first day the funding was due; and

if
the amount withheld is insufficient to meet that county�s funding requirement,
withhold from any other monies payable to that county from any available state
funding source, excluding HURF, an amount necessary to fulfill that county�s
requirement.

78.

Requires payments equal to
one-twelfth of the total amount for county acute care contributions to be made
to the State Treasurer by the fifth day of each month and requires the State
Treasurer, on request from the Director of AHCCCS, to require that up to three
months' payment be made in advance, if necessary.

79.

Requires
the State Treasurer to deposit the amounts paid and withheld into the AHCCCS
Fund and the ALTCS Fund.

80.

Allows the Director of
AHCCCS, if payments made exceed the amount required to meet the costs incurred
by AHCCCS for the hospitalization and medical care of eligible persons, to
instruct the State Treasurer to:

reduce
the remaining payments to be paid by a specified amount; or

provide,
to the counties, specified amounts from the AHCCCS Fund and the ALTCS Fund.

81.

Declares
the Legislature's intent that Maricopa County acute care contributions be
reduced in each subsequent year according to the changes in the Gross Domestic
Product price deflator.

Miscellaneous

82.

Continues
to exclude county contributions for Proposition 204 administrative costs from
county expenditure limitations.

83.

Continues
to exclude county contributions related to the costs of inpatient, in-custody
competency restoration treatment from county expenditure limitations.

84.

Defines
terms.

85.

Makes
technical and conforming changes.

86.

Becomes
effective on the general effective date, with a retroactive provision as noted.

Prepared by Senate Research

June 9, 2026

MM/ci

Current Bill Text

Read the full stored bill text

SB1853 - 572R - S Ver

Senate Engrossed

health care;
2026-2027.

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SENATE BILL 1853

AN
ACT

Amending section 36-798.51, Arizona
Revised Statutes; amending title 36, chapter 29, article 1, Arizona Revised
Statutes, by adding section 36-2920.01; amending sections 38-651
and 38-654, Arizona Revised Statutes; amending title 38, chapter 4,
article 4, Arizona Revised Statutes, by adding section 38-655; appropriating
monies; relating to HEALTH care.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it
enacted by the Legislature of the State of Arizona:

Section 1. Section 36-798.51, Arizona Revised
Statutes, is amended to read:

START_STATUTE
36-798.51.

Overdose and disease prevention programs; requirements;
standards; prohibition on use of opioid settlement monies

A. A city, town, county or nongovernmental
organization, including a local health department or an organization that
promotes scientifically proven ways of mitigating health risks associated with
drug use and other high-risk behaviors, or any combination of these
entities, may establish and operate an overdose and disease prevention
program. A program established pursuant to this section shall have
all of the following objectives:

1. To reduce the spread of viral hepatitis, HIV and
other bloodborne diseases in this state.

2. To reduce needle-stick injuries to law
enforcement officers and other emergency personnel.

3. To encourage individuals who inject drugs to
enroll in evidence-based treatment.

4. To increase proper disposal of used syringes.

5. To reduce the occurrence of skin and soft tissue
wounds and infections related to injection drug use.

B. A program established pursuant to this section
shall offer all of the following:

1. Disposal of used needles and hypodermic syringes.

2. Needles, hypodermic syringes and other injection
supply items at no cost and in quantities sufficient to ensure that needles,
hypodermic syringes and other injection supply items are not shared or reused.

3. Educational materials on all of the following:

(a) Overdose prevention.

(b) Peer support services.

(d) Treatment for mental illness, including
treatment referrals.

(e) Treatment for substance use disorder, including
referrals for substance use disorder treatment.

4. Access to kits that contain naloxone
hydrochloride or any other opioid antagonist that is approved by the United
States food and drug administration to treat a drug overdose, or referrals to
programs that provide access to naloxone hydrochloride or any other opioid
antagonist that is approved by the United States food and drug administration
to treat a drug overdose.

5. For each
individual who requests services, personal consultations from a program
employee or volunteer concerning mental health or substance use disorder
treatment or referrals for evidence-based substance use disorder treatment, as
appropriate.

C. A program
established pursuant to this section shall develop standards for distributing
and disposing of needles and hypodermic syringes based on scientific evidence
and best practices. The number of needles and hypodermic syringes
disposed of through a program shall be at least equivalent to the number of
needles and hypodermic syringes distributed through the program.

D.
A city, town or county
may not use monies received
through the final one Arizona distribution of opioid settlement funds agreement
To provide or to grant monies to a nongovernmental organization to provide
safer smoking equipment.� For the purposes of this subsection, "safer
smoking equipment" means sterile, durable and specialized tools intended
to reduce the HEALTH risks associated with inhaling drugs, such as cocaine
base, methamphetamine or opioids.
END_STATUTE

Sec. 2. Title 36, chapter 29, article 1,
Arizona Revised Statutes, is amended by adding section 36-2920.01, to read:

START_STATUTE
36-2920.01.

Arizona rural health transformation fund; public meetings

A. The Arizona rural health
transformation fund is established consisting of monies received by this state
through the rural health transformation program prescribed in Section 71401 of
Public Law 119-21.� The administration shall administer the fund.� Monies
in the fund are continuously appropriated.

B. Before the executive branch may
spend any of the monies in the Arizona rural health transformation fund, the
administration shall hold three public meetings in each of the largest
metropolitan areas in northern, central and southern Arizona to receive input
and feedback regarding how the monies should be spent and shall submit a report
to the joint legislative budget committee detailing its expenditure plan for
the monies received through the rural health transformation program prescribed in
section 71401 of Public Law 119-21.�
END_STATUTE

Sec. 3. Section 38-651, Arizona Revised
Statutes, is amended to read:

START_STATUTE
38-651.

Expenditure of monies for health and accident coverage;
definition

A. The department of administration may
expend
spend
public monies appropriated
for such purpose to procure health and accident coverage for full-time
officers and employees of this state and its departments and
agencies. The department of administration may adopt rules that
provide that if an employee dies while the employee's surviving spouse's health
insurance is in force, the surviving spouse is entitled to
no
not
more than thirty-six months of extended coverage at
one hundred two
per cent
percent
of
the group rates by paying the premiums. Except as provided by
sections 38-1114 and 38-1141,
no
public monies
may
not
be
expended

spent
to pay all or any part of the premium of health insurance
continued in force by the surviving spouse. The department of
administration
, in CONSULTATION with the health insurance trust
fund Oversight board established by section 38-655,
shall seek a
variety of plans, including indemnity health insurance, hospital and medical
service plans, dental plans and health maintenance organizations. On

the
recommendation of the
department of administration and the review of the joint legislative budget
committee, the department of administration may self-insure for the
purposes of this subsection. If the department of administration
self-insures, the department
, following approval by the
health insurance TRUST fund Oversight board,
may contract directly with
preferred provider organizations, physician and hospital networks, indemnity
health insurers, hospital and medical service plans, dental plans and health
maintenance organizations. If the department self-insures, the
department shall provide that the self-insurance program include all
health coverage benefits that are mandated pursuant to title 20. The
self-insurance program shall include provisions to provide for the
protection of the officers and employees, including grievance procedures for
claim or treatment denials, creditable coverage determinations, dissatisfaction
with care and access to care issues. The department of
administration
,
by rule
and following
approval by the health insurance trust fund Oversight board,
shall
designate and adopt performance standards, including cost competitiveness,
utilization review issues, network development and access, conversion and
implementation, report timeliness, quality outcomes and customer satisfaction
for qualifying plans. The qualifying plans for which the standards
are adopted include indemnity health insurance, hospital and medical service
plans, closed panel medical and dental plans and health maintenance
organizations, and for eligibility of officers and employees to participate in
such plans. Any indemnity health insurance or hospital and medical
service plan designated as a qualifying plan by the department of
administration
and approved by the health INSURANCE trust fund
Oversight board
must be open for enrollment to all permanent full-time
state employees, except that any plan established
prior to
before
June 6, 1977 may be continued as a separate
plan. Any closed panel medical or dental plan or health maintenance
organization designated as the qualifying plan by the department of
administration
and approved by the health insurance trust fund
Oversight board
must be open for enrollment to all permanent full-time
state employees residing within the geographic area or area to be served by the
plan or organization.� Officers and employees may select coverage under the
available options.

B. The department of administration may
expend
spend
public monies appropriated
for such purpose to procure health and accident coverage for the dependents of
full-time officers and employees of this state and its departments and
agencies. The department of administration shall seek a variety of
plans, including indemnity health insurance, hospital and medical service
plans, dental plans and health maintenance organizations. On
a
the
recommendation of the department of administration and the
review of the joint legislative budget committee, the department of
administration may self-insure for the purposes of this
subsection. If the department of administration self-insures,
the department
, following approval by the health insurance trust
fund Oversight board,
may contract directly with preferred provider
organizations, physician and hospital networks, indemnity health insurers,
hospital and medical service plans, dental plans and health maintenance
organizations. If the department self-insures, the department
shall provide that the self-insurance program include all health coverage
benefits that are mandated pursuant to title 20.� The self-insurance
program shall include provisions to provide for the protection of the officers
and employees, including grievance procedures for claim or treatment denials,
creditable coverage determinations, dissatisfaction with care and access to
care issues. The department of administration
,

by rule
and following approval by the health insurance TRUST
fund Oversight board,
shall designate and adopt performance standards,
including cost competitiveness, utilization review issues, network development
and access, conversion and implementation, report timeliness, quality outcomes
and customer satisfaction for qualifying plans. The qualifying plans
for which the standards are adopted include indemnity health insurance,
hospital and medical service plans, closed panel medical and dental plans and
health maintenance organizations, and for eligibility of the dependents of
officers and employees to participate in such plans. Any indemnity
health insurance or hospital and medical service plan designated as a
qualifying plan by the department of administration
and approved
by the health insurance trust fund Oversight board
must be open for
enrollment to all permanent full-time state employees, except that any
plan established
prior to
before

June 6, 1977 may be continued as a separate plan. Any closed panel
medical or dental plan or health maintenance organization designated as a qualifying
plan by the department of administration
and approved by the
health insurance TRUST fund Oversight board
must be open for enrollment
to all permanent full-time state employees residing within the geographic
area or area to be served by the plan or organization.� Officers and employees
may select coverage under the available options.

C. The department of administration
,
following approval by the health insurance trust fund Oversight board,

may designate the Arizona health care cost containment system established by
title 36, chapter 29 as a qualifying plan for the provision of health and
accident coverage to full-time state officers and employees and their
dependents. The Arizona health care cost containment system shall
not be the exclusive qualifying plan for health and accident coverage for state
officers and employees either on a statewide or regional basis.

D. Except as provided in section 38-652,
public monies
expended
spent

pursuant to this section each month shall not exceed:

1.
Five hundred dollars
$500
multiplied by the number of officers and employees who
receive individual coverage.

2.
One thousand two hundred dollars
$1,200
multiplied by the number of married couples if both
members of the couple are either officers or employees and each receives
individual coverage or family coverage.

3.
One thousand two hundred dollars
$1,200
multiplied by the number of officers or employees who
receive family coverage if the spouses of the officers or employees are not
officers or employees.

E. Subsection D of this section:

1. Establishes a total maximum expenditure of public
monies pursuant to this section.

2. Does not establish a minimum or maximum
expenditure for each individual officer or employee.

F. In order to ensure that an officer or employee
does not suffer a financial penalty or receive a financial benefit based on the
officer's or employee's age, gender or health status, the department of
administration
, in CONSULTATION with and on approval by the
health insurance trust fund Oversight board,
shall consider implementing
the following:

1. Requests for proposals for health insurance that
specify that the carrier's proposed premiums for each plan be based on the
expected age, gender and health status of the entire pool of employees and
officers and their family members enrolled in all qualifying plans and not on
the age, gender or health status of the individuals expected to enroll in the
particular plan for which the premium is proposed.

2. Recommendations from a legislatively established
study group on risk adjustments relating to a system for reallocating premium
revenues among the contracting qualifying plans to the extent necessary to
adjust the revenues received by any carrier to reflect differences between the
average age, gender and health status of the enrollees in that carrier's plan
or plans and the average age, gender and health status of all enrollees in all
qualifying plans.

G. Each officer or employee shall certify on the
initial application for family coverage that the officer or employee is not
receiving more than the contribution for which eligible pursuant to subsection
D of this section. Each officer or employee shall also provide the
certification on any change of coverage or marital status.

H. If a qualifying health maintenance organization
is not available to an officer or employee within fifty miles of the officer's
or employee's residence and the officer or employee is enrolled in a qualifying
plan, the officer or employee shall be offered the opportunity to enroll with a
health maintenance organization when the option becomes
available. If a health maintenance organization is available within
fifty miles and
it is determined by
the department of
administration
determines
that there is an insufficient
number of medical providers in the organization, the department may provide for
a change in enrollment from plans designated by the director when additional
medical providers join the organization.

I. Notwithstanding subsection H of this section,
officers and employees who enroll in a qualifying plan and reside outside the
area of a qualifying health maintenance organization shall be offered the
option to enroll with a qualified health maintenance organization offered
through their provider under the same premiums as if they lived within the area
boundaries of the qualified health maintenance organization, if:

1. All medical services are rendered and received at
an office designated by the qualifying health maintenance organization or at a
facility referred by the health maintenance organization.

2. All nonemergency or nonurgent travel, ambulatory
and other expenses from the residence area of the officer or employee to the
designated office of the qualifying health maintenance organization or the
facility referred by the health maintenance organization are the responsibility
of and at the expense of the officer or employee.

3. All emergency or urgent travel, ambulatory and
other expenses from the residence area of the officer or employee to the
designated office of the qualifying health maintenance organization or the
facility referred by the health maintenance organization are paid pursuant to
any agreement between the health maintenance organization and the officer or
employee living outside the area of the qualifying health maintenance
organization.

J. The department of administration shall allow any
school district in this state that meets the requirements of section 15-388,
a charter school in this state that meets the requirements of section 15-187.01
or a city, town, county, community college district, special taxing district,
authority or public entity organized pursuant to the laws of this state that
meets the requirements of section 38-656 to participate in the

health and accident coverage prescribed in this section,
except that participation is only allowed in a health plan that is offered by
the department and that is subject to title 20, chapter 1, article
1. A school district, a charter school, a city, a town, a county, a
community college district, a special taxing district, an authority or any
public entity organized pursuant to the laws of this state rather than this
state shall pay directly to the benefits provider the premium for its
employees.

K. The department of administration shall determine
the actual administrative and operational costs associated with school
districts, charter schools, cities, towns, counties, community college
districts, special taxing districts, authorities and public entities organized
pursuant to the laws of this state participating in
the

state health and accident insurance coverage. These costs shall be
allocated to each school district, charter school, city, town, county,
community college district, special taxing district, authority and public
entity organized pursuant to the laws of this state based on the total number
of employees participating in the coverage. This subsection only
applies to a health plan that is offered by the department and that is subject
to title 20, chapter 1, article 1.

L. Insurance providers contracting with this state
shall separately maintain records that delineate claims and other expenses
attributable to participation of a school district, charter school, city, town,
county, community college district, special taxing district, authority and
public entity organized pursuant to the laws of this state in
the

state health and accident insurance coverage and, by November 1 of each year,
shall report to the department of administration the extent to which state
costs are impacted by participation of school districts, charter schools,
cities, towns, counties, community college districts, special taxing districts,
authorities and public entities organized pursuant to the laws of this state in

the
state health and accident insurance
coverage. By December 1 of each year, the director of the department
of administration shall submit a report to the president of the senate
,

and
the speaker of the house of
representatives
and the health insurance trust fund Oversight
board
detailing the information provided to the department by the
insurance providers and including any recommendations for possible legislative
action.

M. Notwithstanding subsection J of this section, any
school district in this state that meets the requirements of section 15-388,
a charter school in this state that meets the requirements of section 15-187.01
or a city, town, county, community college district, special taxing district,
authority or public entity organized pursuant to the laws of this state that
meets the requirements of section 38-656 may apply to the department of
administration to participate in the self-insurance program that is
provided
by
pursuant to
this section
pursuant to rules adopted by the department. A participating entity
shall reimburse the department for all premiums and administrative or other
insurance costs. The department shall actuarially prescribe the annual premium
for each participating entity to reflect the actual cost of each participating
entity.

N. Any person that
submits a bid to provide health and accident

coverage
pursuant to this section shall disclose any court or administrative judgments
or orders issued against that person within the last ten years before the
submittal.

O. Subject to applicable state and
federal law, the HEALTH insurance trust fund oversight board shall develop
requirements for the sharing of anonymized and aggregated claim and trend data
with employers that participate in health benefit programs funded by the
special employee health insurance trust fund established by section 38-654.

P.
For
the purposes of this section, "dependent" means a spouse under the
laws of this state, a child who is under twenty-six years of age or a
child who
was disabled
had a disability

before reaching nineteen years of age, who continues to
be
disabled
Have a disability
under 42 United States
Code section 1382c and for whom the employee had custody before
reaching
the child reached
nineteen years of age.
END_STATUTE

Sec. 4. Section 38-654, Arizona Revised Statutes, is amended to read:

START_STATUTE
38-654.

Special employee health insurance trust fund; purpose; investment
of monies; use of monies; exemption from lapsing; report

A. The special
employee health insurance trust fund is established to administer the state
employee health insurance benefit plans. The fund shall consist of
legislative appropriations, monies collected from the employer and employees
for the health insurance benefit plans and investment earnings on monies
collected from employees. The fund shall be administered by the
director of the department of administration.� Monies in the fund that are
determined by the legislature to be for administrative expenses of the
department of administration, including monies authorized by subsection C,
paragraph 4 of this section, are subject to legislative appropriation.

B. On notice from the department of administration,
the state treasurer shall invest and divest monies in the fund as provided by
section 35-313, and monies earned from investment shall be credited to
the fund.� There shall be a separate accounting of monies contributed by the
employer, monies collected from state employees and investment earnings on
monies collected from employees. Monies collected from state
employees for health insurance benefit plans shall be
expended
spent
before expenditure of monies contributed by the
employer.

C. Monies in the fund shall be used by the
department of administration for the following purposes for the benefit of
officers and employees who participate in a health insurance benefit plan
pursuant to this article:

1. To administer a health insurance benefit program
for state officers and employees.

2. To pay health insurance premiums, claims costs
and related administrative expenses.

3. To apply against future premiums, claims costs
and related administrative expenses.

4. To apply the equivalent of not more than $1.50
for each employee for each month to administer applicable federal and state
laws relating to health insurance benefit programs and to design, implement and
administer improvements to the employee health insurance or benefit program
as approved by the health insurance trust fund Oversight board
established by section 38-655
.

D. Subsection C of this section does not require
that all monies in the special employee health insurance trust fund be used
within any one or more fiscal years. Any person who is no longer a
state employee or an employee who is no longer a participant in a health
insurance plan under contract with the department of administration shall have
no claim on monies in the fund.

E. Monies deposited in or credited to the fund are
exempt from the provisions of section 35-190 relating to lapsing of
appropriations.

F. The
department of administration shall submit an annual report on the financial
status of the special employee insurance trust fund to the governor, the
president of the senate, the speaker of the house of representatives, the
chairpersons of the house and senate appropriations committees and the joint
legislative budget committee staff by July 1. The department shall make
the report available to officers and employees who have paid premiums under one
of the insurance plans from which monies were received for deposit in the trust
account since the inception of the health and accident coverage program or
since the department submitted the last report, whichever is
later. The report shall include:

1. The actuarial assumptions and a
description of the methodology used to set premiums and reserve balance targets
for the health insurance benefit program for the current plan year.

2. An analysis of the actuarial
soundness of the health insurance benefit program for the previous plan year.

3. An analysis of the actuarial
soundness of the health insurance benefit program for the current plan year,
based on both year-to-date experience and total expected experience.

4. A preliminary estimate of the
premiums and reserve balance targets for the next plan year, including the
actuarial assumptions and a description of the methodology used.

5. The required and actual performance
standards for the prior plan year for the contracted health plans, including
indemnity health insurance, hospital and medical service plans, dental plans
and health maintenance organizations.

G.
f.
The
department shall submit a report to the joint legislative budget committee
detailing any changes
approved by the health insurance trust
fund Oversight board
to the type of benefits offered under the plan and
associated costs at least forty-five days before making the
change. The report shall include:

1. An estimate of the cost or saving associated with
the change.

2. An explanation of why the change was implemented
before the next plan year.
END_STATUTE

Sec. 5. Title
38, chapter 4, article 4, Arizona Revised Statutes, is amended by adding
section 38-655, to read:

START_STATUTE
38-655.

Health insurance trust fund oversight board; members; duties;
annual report; exemption

A. The health insurance trust fund
Oversight board is ESTABLISHED consisting of the following members:

1. The assistant director of the
department of administration, benefits services division, who serves as
chairperson of the board.

2. The director of the department of
administration or the director's designee.

3. The director of the department of
insurance and financial INSTITUTIONS or the director's designee.

4. One member who is appointed by the
president of the senate and one member who is appointed by the speaker of the
house of REPRESENTATIVES, each of whom:

(
a
) shall Serve
a term of two years or at the pleasure of the appointing
authority. a Board member who is appointed PURSUANT to this
paragraph is eligible for reappointment.

(
b
) Has at
least three years of experience in the health care industry in this state and
who is not a registered lobbyist.

B. a person is not eligible to serve
as a member of the board During the term for which the person has been elected
or appointed to fill an otherwise elected position.

C. members of the board are subject
to the provisions of chapter 3, article 8 of this title relating to conflicts
of interest.

D. The board shall meet at least two
times annually. Meetings may be held at the call of the chairperson
or a majority of the board members. Three members of the health
insurance trust fund Oversight board shall CONSTITUTE a quorum to conduct
business. Board meetings may be conducted
virtually. Board members are not eligible to receive compensation
for board service and are not eligible to receive reimbursement for expenses
pursuant to article 2 of this chapter.

E. The board shall:

1. Approve
all health insurance benefit programs offered to state officers and employees
pursuant to section 38-654.

2. Approve premium rates, copayments,
DEDUCTIBLES and coinsurance percentages and MAXIMUMS for the plan.

3. For plan year 2028 and each
subsequent plan year, approve any requests for proposal contract of more than
$3,000,000 that are entered into by the department of administration for the
uses set forth in section 38-654, subsection C.� The board shall meet to
review the department of administration's contract within ten days after the
request of the department.

4. Consult with the department of
administration as required by this article and at the request of the department
of administration.

5. Develop and maintain a strategic
plan for the state health plan.

6. Design policies that seek to, by
plan year 2035 and for each subsequent plan year, achieve:

(
a
) A premium
cost sharing of eighty-five percent to be paid by the employer and
fifteen percent to be paid by the employee for medical premiums.

(
b
) A
consistent reserve in the special employee health insurance TRUST fund
ESTABLISHED by section 38-654 that is twice the total amount of incurred,
but not reported, claims payable from health benefit programs funded by the
special employee health insurance trust fund.

(
c
) Optimal
cross subsidization of retirees.

F. On or before July 1, 2027 and each
year thereafter, the board shall approve and the department of administration
shall submit an annual report to the governor, the president of the senate, the
speaker of the house of representatives, the chairpersons of the senate and the
house of representatives appropriations committees and the joint legislative
budget committee staff. The department of ADMINISTRATION shall make
the annual report available to officers and employees who have paid premiums
under any of the insurance plans from which monies were received for deposit in
the special employee health insurance trust fund since the inception of the
state health and accident insurance plan or since the department of
administration submitted the most recent annual report, whichever is
later. The annual report must include:

1. The board's strategic plan for the
state health plan.

2. The annual activities of the
board.

3. The actuarial assumptions and a
description of the methodology used to set premiums and reserve balance targets
for the health insurance benefit plan for the current plan year.

4. An analysis of the actuarial
soundness of the health insurance benefit plan for the previous plan year.

5. An analysis of the actuarial
soundness of the health insurance benefit plan for the current plan year, based
on both year-to-date experience and total expected experience.

6. A preliminary estimate of the
premiums and reserve balance targets for the next plan year, including the
actuarial assumptions and a description of the methodology used.

7. The required and actual
performance standards for the prior plan year for the contracted health plans,
including indemnity health insurance, hospital and medical service plans,
dental plans and health maintenance organizations.

G. Section 41-2955, subsection D does
not apply to the board.

END_STATUTE

Sec. 6.
Review of member eligibility information; eligibility
redetermination; waiver requests; delayed repeal; definitions

A. The
administration shall review information that is provided by the Arizona lottery
commission and the department of gaming to identify members of households who
have won substantial lottery or gambling winnings, as defined by 7 Code of Federal
Regulations section 273.11(r)(2), including online gambling winnings, and
incorporate the information into eligibility determinations.

B. The administration
shall:

1. Receive and review death
records information from the department of health services concerning members
and shall adjust system eligibility accordingly.

2. Review information
concerning members that indicates a change in circumstances that may affect
eligibility, including potential changes in residency as identified by out-of-state
enrollment in a state's medicaid program, temporary assistance for needy
families program or supplemental nutrition assistance program or by an out-of-state
death record.

C. For all eligibility
redeterminations for medical assistance under a state plan or a waiver under
that state plan scheduled on or after the first day of the first quarter that
begins after December 31, 2026, and unless otherwise approved as a waiver by
the centers for medicare and medicaid services, the administration shall comply
with federal law and regulations, including 42 United States Code section
1396a(e)(14). For the purposes of the redetermination process, the
administration shall receive and review information from the department of
economic security concerning members that indicates a change in circumstances
that may affect eligibility, including changes to unemployment benefits,
employment status or wages.

D. To the extent allowed by
federal law, the administration may not accept self-attestation of
residency without independent verification before enrollment.

E. The administration may
not accept eligibility determinations for the system from an exchange
established pursuant to 42 United States Code section 18041(c). The
administration may accept assessments from an exchange established pursuant to 42
United States Code section 18041(c) but shall independently verify eligibility
and make eligibility determinations.

F. If the administration
receives reliable information concerning a member that indicates a change in
the member's circumstances that may affect eligibility, the administration
shall review the member's eligibility.

G. The administration may
execute a memorandum of understanding with any other department of this state
for information required to be shared pursuant to this section. The
administration may contract with one or more independent vendors to provide
additional data or information that may indicate a change in circumstances and
affect an individual's eligibility.

H. On or before April 1, 2027, the
administration shall submit to the centers for medicare and medicaid services
any waiver requests necessary to implement this section.

I. This section is repealed
from and after June 30, 2027.

J. For the purposes of this
section, "administration" and "member" have the same
meanings prescribed in section 36-2901, Arizona Revised Statutes.

Sec. 7.
Presumptive
eligibility; limits; standards; notification; training; delayed repeal;
definition

A. The administration shall
request approval from the centers for medicare and medicaid services for a
section 1115 waiver to allow the administration to eliminate mandatory hospital
presumptive eligibility and restrict presumptive eligibility determinations to
children and pregnant women eligibility groups. If approval for the section
1115 waiver is denied, the administration shall resubmit a subsequent request
for approval within twelve months after each denial.

B. Unless required by
federal law, the administration may not designate itself as a qualified health
entity for the purpose of making presumptive eligibility determinations or for
any purpose not expressly authorized by state law.

C. When making presumptive
eligibility determinations, a qualified hospital shall do all of the following:

1. Notify the
administration of each presumptive eligibility determination within five
working days after the date the determination is made.

2. Assist individuals who
are determined presumptively eligible under the system with completing and
submitting a full application for system eligibility.

3. Notify each applicant in
writing and on all relevant forms with plain language and large print that if
the applicant does not file a full application for system eligibility with the
administration before the last day of the following month, presumptive
eligibility coverage will end on the last day of the following month.

4. Notify each applicant
that if the applicant files a full application for system eligibility with the
administration before the last day of the following month, presumptive
eligibility coverage will continue until an eligibility determination is made
on the application that is filed.

D. The administration shall
apply the following standards to establish and ensure that accurate presumptive
eligibility determinations are made by each qualified hospital:

1. Whether the qualified
hospital submitted to the administration the presumptive eligibility card
within five working days after the determination date.

2. Whether a full
application for system eligibility was received by the administration before
the expiration of the presumptive eligibility period.

3. If a full application
was received by the administration, whether the individual was found to be
eligible under the system.

E. If the administration
determines that a qualified hospital fails to meet any of the standards
established under subsection D of this section for any presumptive eligibility
determination that the qualified hospital made, the administration shall notify
the qualified hospital in writing within five days after the determination. The
notice must include:

1. For the first violation,
both of the following:

(a) A description of the
standard that was not met and an explanation of why it was not met.

(b) Confirmation that a
second finding will require that all applicable hospital staff participate in
mandatory training by the administration on hospital presumptive eligibility
rules.

2. For the second
violation, all of the following:

(a) A description of the
standard that was not met and an explanation of why it was not met.

(b) Confirmation that all
applicable hospital staff will be required to participate in mandatory training
by the administration on hospital presumptive eligibility rules, including the
date, time and location of the training as determined by the administration.

(c) A description of
available appeals procedures by which a qualified hospital may dispute the
finding and remove the finding from the qualified hospital's record by
providing clear and convincing evidence that the standard was met.

(d) Confirmation that if
the qualified hospital subsequently fails to meet any standard for presumptive
eligibility for any determination, the qualified hospital will no longer be
qualified to make presumptive eligibility determinations under the system.

3. For the third violation,
all of the following:

(a) A description of the
standard that was not met and an explanation of why it was not met.

(b) A description of
available appeals procedures by which a qualified hospital may dispute the
finding and remove the finding from the qualified hospital's record by
providing clear and convincing evidence that the standard was met.

(c) Confirmation that,
effective immediately, the qualified hospital is no longer qualified to make
presumptive eligibility determinations under the system.

F. This section is repealed
from and after June 30, 2027.

G. For the purposes of this
section, "administration" has the same meaning prescribed in section
36-2901, Arizona Revised Statutes.

Sec. 8.
Dementia services
program; department duties; Alzheimer's disease state plan; posting; reporting
requirement; advisory council; delayed repeal; definition

A.
The
department of health services is designated as the lead agency in this state to
address Alzheimer's disease and related forms of dementia.

B. The director of the
department of health services shall establish a dementia services program
within the department that does all of the following:

1. Facilitates the
coordination of programs that relate to Alzheimer's disease and related forms
of dementia in all state agencies.

2. Facilitates the
coordination, review, publication and implementation of and updates to the
Alzheimer's disease state plan developed pursuant to this section.

3. Applies for public
health funding and grants related to Alzheimer's disease and related forms of
dementia.

4. Incorporates evidence-based
brain health strategies into relevant department-led public health
programs.

C. The department shall
develop an Alzheimer's disease state plan that assesses the current and future
impact of Alzheimer's disease and related forms of dementia on this state and
that:

1. Assesses and identifies
relevant gaps in all of the following:

(a) Existing state services
and resources that address the needs of persons living with Alzheimer's disease
or a related form of dementia and their caregivers.

(b) The needs of persons
who have Alzheimer's disease or a related form of dementia and how their lives
are affected throughout the progression of the disease.

(c) This state's public and
private health systems, workforce and clinical capacity and capability to
provide effective detection, diagnosis and treatment of Alzheimer's disease and
related forms of dementia.

(d) This state's public and
private nonmedical care and support services for persons living with
Alzheimer's disease or a related form of dementia and their caregivers.

2. Provides strategic
recommendations with measurable goals for state action to do all of the
following for persons living with Alzheimer's disease or a related form of
dementia:

(a) Improve access to care,
support, diagnostics and treatment.

(b) Improve the quality of
dementia care, including crisis response, health care systems, long-term
care and in-home care.

(d) Improve
caregiver support, care planning and care coordination.

(e) Improve
the collection, availability and use of dementia-related data by state
agencies.

D. The department shall
convene or designate an advisory council or working group to assist in
planning, conducting and evaluating stakeholder engagement and state plan
implementation, review and updates.� Membership of the advisory council or
working group shall reflect the diversity of stakeholders identified in
subsection E, paragraph 1 of this section.

E. The department shall
conduct stakeholder engagement sessions at least once each calendar year to
solicit input on the state plan.� The department shall:

1. Seek feedback from and
collaborate with persons who have Alzheimer's disease or a related form of
dementia, direct caregivers and public, private and nonprofit organizations
focused on Alzheimer's care services, research, advocacy, health services and
caregiver support.

2. At least thirty days
before each engagement session, provide public notice of the session, including
the date, time, location or virtual access information, a summary agenda and
instructions for submitting written comments.

3. Ensure meaningful
participation by stakeholders statewide, including rural and underserved
communities, and provide reasonable accommodations and language access.

4. Accept written comments
for at least fourteen days following each engagement session.

F. On or before June 30,
2027, the department shall update and submit the state plan to the governor,
the president of the senate and the speaker of the house of representatives and
shall provide a copy to the secretary of state.� The department shall publish
the plan on the department's public website.

G. This section is repealed
from and after June 30, 2027.

H. For the purposes of this
section, "caregiver" means an unpaid person who provides regular
assistance in activities of daily living for a person living with Alzheimer's
disease or a related form of dementia.

Sec. 9.
AHCCCS; urban
Indian organizations; traditional health services; pilot coverage;
administrative action; delayed repeal; definitions

A. Subject to a section
1115 waiver approval by the centers for medicare and medicaid services, for
fiscal years 2026-2027, 2027-2028 and 2028-2029, the Arizona
health care cost containment system and its contractors shall provide pilot
coverage for traditional healing services at urban Indian health organizations
if both of the following apply:

1. The member qualifies for
services through the Indian health service or a tribal facility pursuant to the
conditions of participation outlined in 42 Code of Federal Regulations section
136.12.

2. The traditional healing
services are delivered by or through an urban Indian organization.

B. The director of the
Arizona health care cost containment system may take any administrative action
necessary to implement this section.

C. This section is repealed
from and after December 31, 2029.

D. For the purposes of this
section:

1. "Contractor"
has the same meaning prescribed in section 36-2901, Arizona Revised
Statutes.

2. "Member" has
the same meaning prescribed in section 36-2901, Arizona Revised Statutes.

3. "Urban Indian
organization" means an urban Indian organization in this state that
receives Indian health services funding pursuant to 25 United States Code
chapter 18.

Sec. 10.
ALTCS; county
contributions; fiscal year 2026-2027

A. Notwithstanding section
11-292, Arizona Revised Statutes, county contributions for the Arizona
long-term care system for fiscal year 2026-2027 are as follows:

1. Apache���������������������������������� $ 792,400

2. Cochise��������������������������������� $ 8,055,900

3. Coconino�������������������������������� $ 2,378,900

4. Gila������������������������������������ $ 3,365,400

5. Graham���������������������������������� $ 2,320,400

6. Greenlee�������������������������������� $ 138,200

7. La Paz���������������������������������� $ 756,100

8. Maricopa�������������������������������� $298,895,000

9. Mohave���������������������������������� $ 12,022,500

10. Navajo��������������������������������� $ 3,279,800

11. Pima����������������������������������� $ 68,282,000

12. Pinal���������������������������������� $ 19,662,800

13. Santa Cruz����������������������������� $ 3,204,100

14. Yavapai�������������������������������� $ 8,793,400

15. Yuma����������������������������������� $ 13,867,000

B. If the overall cost for
the Arizona long-term care system exceeds the amount specified in the general
appropriations act for fiscal year 2026-2027, the state treasurer shall
collect from the counties the difference between the amount specified in
subsection A of this section and the counties' share of the state's actual
contribution. The counties' share of the state's contribution must
comply with any federal maintenance of effort requirements. The
director of the Arizona health care cost containment system administration
shall notify the state treasurer of the counties' share of the state's
contribution and report the amount to the director of the joint legislative
budget committee. The state treasurer shall withhold from any other
monies payable to a county from whatever state funding source is available an
amount necessary to fulfill that county's requirement specified in this
subsection. The state treasurer may not withhold distributions from
the Arizona highway user revenue fund pursuant to title 28, chapter 18, article
2, Arizona Revised Statutes.� The state treasurer shall deposit the amounts
withheld pursuant to this subsection and amounts paid pursuant to subsection A
of this section in the long-term care system fund established by section 36-2913,
Arizona Revised Statutes.

Sec. 11.
AHCCCS;
disproportionate share payments; fiscal year 2026-2027

A. Disproportionate
share payments for fiscal year 2026-2027 made pursuant to section
36-2903.01, subsection O, Arizona Revised Statutes, include:

1. $28,474,900 for the
Arizona state hospital. The Arizona state hospital shall provide a
certified public expense form for the amount of qualifying disproportionate
share hospital expenditures made on behalf of this state to the Arizona health
care cost containment system administration on or before March 31,
2027. The administration shall assist the Arizona state hospital in
determining the amount of qualifying disproportionate share hospital
expenditures. Once the administration files a claim with the federal
government and receives federal financial participation based on the amount
certified by the Arizona state hospital, the administration shall deposit the
entire amount of federal financial participation in the state general
fund. If the certification provided is for an amount less than
$28,474,900, the administration shall notify the governor, the president of the
senate and the speaker of the house of representatives and shall deposit the
entire amount of federal financial participation in the state general
fund. The certified public expense form provided by the Arizona
state hospital must contain both the total amount of qualifying
disproportionate share hospital expenditures and the amount limited by section
1923(g) of the social security act.

2. $884,800 for private
qualifying disproportionate share hospitals.� The Arizona health care cost
containment system administration shall make payments to hospitals consistent
with this appropriation and the terms of the state plan, but payments are
limited to those hospitals that either:

(
a
) Meet
the mandatory definition of disproportionate share qualifying hospitals under
section 1923 of the social security act.

(
b
) Are
located in Yuma county and contain at least three hundred beds.

B.
After the distributions made pursuant to subsection A of
this section, the allocations of disproportionate share hospital payments made
pursuant to section 36-
2903.01,
subsection P, Arizona Revised Statutes, shall be made available in the
following order to qualifying private hospitals that are:

1. Located in a county with
a population of less than four hundred thousand persons.

2. Located in a county with
a population of at least four hundred thousand persons but less than nine
hundred thousand persons.

3. Located in a county with
a population of at least nine hundred thousand persons.

Sec. 12.
AHCCCS transfer;
counties; federal monies; fiscal year 2026-2027

On or
before December 31, 2027, notwithstanding any other law, for fiscal year 2026-2027,
the Arizona health care cost containment system administration shall transfer
to the counties the portion, if any, as may be necessary to comply with section
10201(c)(6) of the patient protection and affordable care act (P.L. 111-148),
regarding the counties' proportional share of this state's contribution.

Sec. 13.
County acute
care contributions; fiscal year 2026-2027; intent

A. Notwithstanding section
11-292, Arizona Revised Statutes, for fiscal year 2026-2027 for the provision
of hospitalization and medical care, the counties shall contribute the
following amounts:

1. Apache ��������������������������������� $ 268,800

2. Cochise��������������������������������� $ 2,214,800

3. Coconino�������������������������������� $ 742,900

4. Gila������������������������������������ $ 1,413,200

5. Graham���������������������������������� $ 536,200

6. Greenlee�������������������������������� $ 190,700

7. La Paz���������������������������������� $ 212,100

8. Maricopa�������������������������������� $14,417,300

9. Mohave���������������������������������� $ 1,237,700

10. Navajo��������������������������������� $ 310,800

11. Pima����������������������������������� $14,951,800

12. Pinal���������������������������������� $ 2,715,600

13. Santa Cruz����������������������������� $ 482,800

14. Yavapai�������������������������������� $ 1,427,800

15. Yuma����������������������������������� $ 1,325,100

B. If a county does not
provide funding as specified in subsection A of this section, the state
treasurer shall subtract the amount owed by the county to the Arizona health
care cost containment system fund and the long-term care system fund
established by section 36-2913, Arizona Revised Statutes, from any payments
required to be made by the state treasurer to that county pursuant to section
42-5029, subsection D, paragraph 2, Arizona Revised Statutes, plus interest on
that amount pursuant to section 44-1201, Arizona Revised Statutes, retroactive
to the first day the funding was due. If the monies the state
treasurer withholds are insufficient to meet that county's funding requirements
as specified in subsection A of this section, the state treasurer shall
withhold from any other monies payable to that county from whatever state
funding source is available an amount necessary to fulfill that county's
requirement. The state treasurer may not withhold distributions from
the Arizona highway user revenue fund pursuant to title 28, chapter 18, article
2, Arizona Revised Statutes.

C. Payment of an amount
equal to one-twelfth of the total amount determined pursuant to subsection A of
this section shall be made to the state treasurer on or before the fifth day of
each month. On request from the director of the Arizona health care
cost containment system administration, the state treasurer shall require that
up to three months' payments be made in advance, if necessary.

D. The state treasurer
shall deposit the amounts paid pursuant to subsection C of this section and
amounts withheld pursuant to subsection B of this section in the Arizona health
care cost containment system fund and the long-term care system fund
established by section 36-2913, Arizona Revised Statutes.

E. If payments made
pursuant to subsection C of this section exceed the amount required to meet the
costs incurred by the Arizona health care cost containment system for the
hospitalization and medical care of those persons defined as an eligible person
pursuant to section 36-2901, paragraph 6, subdivisions (a), (b) and (c),
Arizona Revised Statutes, the director of the Arizona health care cost
containment system administration may instruct the state treasurer either to
reduce remaining payments to be paid pursuant to this section by a specified
amount or to provide to the counties specified amounts from the Arizona health
care cost containment system fund and the long-term care system fund
established by section 36-2913, Arizona Revised Statutes.

F. The legislature intends
that the Maricopa county contribution pursuant to subsection A of this section
be reduced in each subsequent year according to the changes in the GDP price
deflator.� For the purposes of this subsection, "GDP price deflator"
has the same meaning prescribed in section 41-563, Arizona Revised Statutes.

Sec. 14.
AHCCCS; mental
health medication utilization; report; definition

A. Not
later than January 31, 2027, the Arizona health care cost containment system
administration shall prepare and issue a report to the governor, the
chairpersons of the house of representatives and senate health and human
services committees, or their successor committees, the director of the joint
legislative budget committee and the director of the governor's office of
strategic planning and budgeting that includes information about the costs and
aggregate spending on and aggregate utilization of mental health medications
during contract year 2024-2025.� The administration shall provide a copy
of the report to the secretary of state.

B. The report required by
subsection A of this section shall include the annual aggregate gross amount
spent for each mental health medication class and the annual aggregate net
amount spent by this state for each mental health medication class after
rebates without disclosing any information about manufacturer-negotiated
supplemental rebate agreements for any specific drug. The report
shall also include the average annual cost by class for generic and nongeneric
mental health medications. Without disclosing any information about
manufacturer-negotiated supplemental rebate agreements that could
compromise the competitive or proprietary nature of these agreements, for
antipsychotic and antidepressant medications, the report shall include the
total number of prior authorizations submitted for nonpreferred antipsychotic
and nonpreferred antidepressant medications, the percentage of prior
authorization approvals and denials, the generic antipsychotic and generic
antidepressant medication utilization percentages and the total amount of
antipsychotic and antidepressant medication claims.

C. For purposes of this
section, "mental health medication" means the following medications:

1. Antipsychotics.

2. Antidepressants.

3. Anxiolytics.

4. Stimulants.

5. Sedative hypnotics.

Sec. 15.
Proposition 204
administration; exclusion; county expenditure limitations

County contributions for the
administrative costs of implementing sections 36-2901.01 and 36-2901.04,
Arizona Revised Statutes, that are made pursuant to section 11-292, subsection
O, Arizona Revised Statutes, are excluded from the county expenditure
limitations.

Sec. 16.
Competency
restoration; exclusion; county expenditure limitations

County contributions made pursuant to
section 13-4512, Arizona Revised Statutes, are excluded from the county
expenditure limitations.

Sec. 17.
Opioid
settlement funds agreement; expenditure limitation; penalty reduction; fiscal
year 2026-2027

Notwithstanding section 41-1279.07,
Arizona Revised Statutes, for fiscal year 2026-2027, if a county, city or
town exceeds its expenditure limitation prescribed in article IX, section 20,
Constitution of Arizona, due to spending monies received from the one Arizona
distribution of opioid settlement funds agreement, the penalty shall be reduced
by the amount of the one Arizona distribution of opioid settlement funds
agreement monies spent and may not be less than $0.

Sec. 18.
AHCCCS; risk
contingency rate setting

Notwithstanding any other law, for the
contract year beginning October 1, 2026 and ending September 30, 2027, the
Arizona health care cost containment system administration may continue the
risk contingency rate setting for all managed care organizations and the
funding for all managed care organizations administrative funding levels that
were imposed for the contract year beginning October 1, 2010 and ending
September 30, 2011.

Sec. 19.
Rulemaking exemption

Notwithstanding any other law, for the
purposes of adopting policies and rules related to service frequency or hour
limitations for covered services pursuant to title 36, chapter 29, Arizona
Revised Statutes, the Arizona health care cost containment system
administration is exempt from the requirements of title 41, chapter 6, Arizona
Revised Statutes, in fiscal year 2026-2027, except that the Arizona
health care cost containment system administration shall provide notice and at
least thirty days for public comment before implementing policies and rules
related to service frequency or hour limitations.

Sec. 20.
Rulemaking exemption; retroactivity

A. Notwithstanding any
other law, for the purposes of implementing the hospital assessment pursuant to
sections 36-2907.08 and 36-2999.72, Arizona Revised Statutes, the
Arizona health care cost containment system administration is exempt from the
requirements of title 41, chapter 6, Arizona Revised Statutes, in fiscal year
2026-2027.

B. This section applies
retroactively to from and after June 30, 2026.

Sec. 21.
Legislative
intent; implementation of program

The legislature intends that for
fiscal year 2026-2027 the Arizona health care cost containment system
administration implement a program within the available appropriation.

Sec. 22.
Applicability

Section 36-798.51, Arizona
Revised Statutes, as amended by this act, applies to contracts entered into or
renewed from and after December 31, 2026.