TOXICOLOGY REIMBURSEMENT REQUIREMENTS

SB0205

SENATE BILL 205

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Leo Jaramillo

AN ACT

RELATING TO HEALTH CARE; ESTABLISHING REIMBURSEMENT
REQUIREMENTS FOR TOXICOLOGY SERVICES PROVIDED BY INDEPENDENT
REFERENCE LABORATORIES; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.
A new section of the Public Assistance Act is
enacted to read:

"[
NEW MATERIAL
] MEDICAID REIMBURSEMENT FOR TOXICOLOGY
SERVICES.--

A. The authority shall establish medicaid
reimbursement codes for toxicology services provided by an
independent reference laboratory that are consistent with the
provisions of this section.

B. Medicaid reimbursement for toxicology services
provided by an independent reference laboratory shall be equal
to the average medicaid fee-for-service rate schedule for the
healthcare common procedure coding system codes used for
billing of definitive drug testing.

C. Toxicology services shall be reimbursed pursuant
to this section if the toxicology services are medically
necessary, as determined by a treating health care provider,
and performed in accordance with evidence-based clinical
protocols adopted by the authority that are consistent with
applicable behavioral health or substance use disorder
treatment standards.

D. The authority shall promulgate rules to
establish protocols for medicaid reimbursement of toxicology
services. While developing the rules, the authority shall
consider nationally accepted clinical guidance, such as
recommendations of the American society of addiction medicine
that provide for:

(1) weekly toxicology services for persons who
are beginning treatment for a substance use disorder, unless
clinical documentation supports a different frequency;

(2) monthly toxicology services for persons in
stable recovery from a substance use disorder, unless clinical
assessment and medical necessity indicate otherwise, as
specified by a treating health care provider; and

(3) randomized toxicology services when
feasible and clinically appropriate.

E. The authority may request an independent
reference laboratory to provide tax filings and certificates of
good standing with the taxation and revenue department to
establish that the independent reference laboratory is eligible
for medicaid reimbursement pursuant to this section.

F. Nothing in this section shall be construed to:

(1) establish a mandatory minimum or maximum
frequency for reimbursement of toxicology services; or

(2) restrict a provider's ability to order
toxicology services at a frequency supported by documented
clinical necessity.

G. As used in this section:

(1) "financially affiliated" means a business
arrangement in which one person, directly or indirectly, is
controlled by, is under common control with or controls another
person;

(2) "independent reference laboratory" means a
laboratory that:

(a) maintains a facility that is
physically located in the state and is staffed by laboratory
personnel who regularly and routinely report to the facility in
the ordinary course of business for the receipt, handling and
testing of human clinical specimens;

(b) is certified pursuant to the federal
Clinical Laboratory Improvement Amendments of 1988, accredited
by the college of American pathologists and licensed by the
authority;

(c) is enrolled as a medicaid provider
under the medicaid program administered by the authority;

(d) is not owned by, controlled by or
financially affiliated with a hospital, a physician practice or
physician group, a managed care organization or an insurer;

(e) performs or contracts for the
performance of medicaid billing, coding, claim submission and
related revenue cycle management activities that occur
physically within the state; and

(f) follows all applicable New Mexico
gross receipts tax laws and regulations;

(3) "medicaid" means the joint federal-state
health coverage program pursuant to Title 19 or Title 21 of the
federal Social Security Act and rules promulgated pursuant to
that act; and

(4) "toxicology services" means laboratory
testing of biological specimens, including urine, blood, saliva
and hair, for the presence of drugs or alcohol."

SECTION 2.
APPROPRIATION.--One hundred thousand dollars
($100,000) is appropriated from the general fund to the health
care authority for expenditure in fiscal year 2027 to
administer medicaid reimbursement for toxicology services
provided by independent reference laboratories. Any unexpended
balance remaining at the end of fiscal year 2027 shall revert
to the general fund.

SECTION 3.
EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2026.

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