AMENDING SECTIONS 36-2921 AND 36-2923, ARIZONA REVISED STATUTES; RELATING TO
THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM.
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 36-2921, Arizona Revised Statutes, is amended to read:
A. Subject to the availability of monies in the medically needy account established pursuant to section 42-1241, subsection C, paragraph 3 the administration shall use the monies in the account in the following order:
1. The administration shall withdraw the amount necessary to pay the
state share of costs for providing health care services to any person who is
eligible pursuant to section 36-2901, paragraph 4, subdivisions (a), (c) and
(h)
2. Beginning on August 1, 1995 and on the first day of each month thereafter, the sum of one million two hundred fifty thousand dollars shall be transferred from the medically needy account to the medical services stabilization fund for uses as prescribed in section 36-2922.
3. From and after August 1, 1995 and each year thereafter, the administration shall transfer not more than fifteen million dollars to the department of health services to be allocated as follows if the department awards a contract:
(a) One-third of the total amount transferred, for the mental health grant program established pursuant to section 36-3414.
(b) One-third of the total amount transferred, for primary care services established pursuant to section 36-2907.05.
(c) One-third of the total amount transferred, for grants to the community health centers established pursuant to section 36-2907.06.
4. From and after August 1, 1995, the administration shall transfer up to five hundred thousand dollars annually for fiscal years 1995-1996 and 1996-1997 for pilot programs providing detoxification services in counties having a population of five hundred thousand persons or less according to the most recent United States decennial census.
5. The administration shall transfer up to two hundred fifty thousand dollars annually for fiscal years 1995-1996, 1996-1997 and 1997-1998 for telemedicine pilot programs designed to facilitate the provision of medical services to persons living in medically underserved areas as provided in section 36-2352.
6. The administration shall transfer up to one hundred fifty thousand dollars annually beginning in fiscal year 1996-1997 for contracts by the department of health services with nonprofit organizations that primarily assist in the management of end stage renal disease and related problems. Contracts shall not include payments for transportation of patients for dialysis.
7. Contingent on the existence of a premium sharing demonstration
project fund, beginning October 1, 1996 and until September 30, 1999, the
administration shall withdraw the sum of twenty million dollars in each of
fiscal years 1996-1997, 1997-1998 and 1998-1999 for deposit in the premium
sharing demonstration project fund established by section 36-2923 to provide
health care services to any person who is eligible for an Arizona health care
cost containment system premium sharing demonstration program enacted by the
legislature. The Arizona health care cost containment system premium sharing
demonstration program enacted by the legislature shall not be an entitlement
program.
8. Subject to the availability of monies, the Arizona health care cost containment system administration shall transfer to the department of health services up to five million dollars annually beginning in fiscal year 1996-1997 for providing nonentitlement funding for a basic children's medical services program established by section 36-2907.08. The administration may also withdraw and transfer to the department amounts for program evaluation and for administrative costs as prescribed in section 36-2907.08.
B. The department of health services shall establish an accounting procedure to ensure that all funds transferred pursuant to this section are maintained separately from any other funds.
C. The administration shall annually withdraw monies from the medically needy account in the amount necessary to reimburse the department of health services for administrative costs to implement each program established pursuant to subsection A of this section not to exceed two per cent of the amount transferred for each program.
D. The administration shall annually withdraw monies from the medically needy account in the amount necessary to reimburse the department of health services for the evaluations as prescribed by section 36-2907.07.
E. The administration shall annually report, no later than November 1 of each year, to the joint legislative oversight committee on the tobacco tax and health care fund the annual revenues deposited in the medically needy account and the estimated expenditures needed in the subsequent year to provide funding for services provided in subsection A, paragraph 1 of this section. The administration shall immediately report to the cochairs of the oversight committee if at any time the administration estimates that the amount available in the medically needy account will not be sufficient to fund the maximum allocations established in this section.
Sec. 2. Section 36-2923, Arizona Revised Statutes, is amended to read:
A. A premium sharing demonstration project fund is established for
costs associated with an Arizona health care cost containment system premium
sharing demonstration project that is to provide uninsured persons access to
medical services provided by system providers. The fund consists of monies
deposited from the medically needy account of the tobacco tax and health care
fund pursuant to section 36-2921, subsection A, paragraph
B. Beginning on October 1, 1997, if a premium sharing demonstration project is established, the administration shall spend monies in the fund through the first quarter of fiscal year 2000-2001 to cover demonstration project expenditures. The administration may continue to make expenditures from the fund, subject to the availability of monies in the fund, for covering program costs incurred but not processed by the administration during the fiscal years in which the program officially operated.
C. The director may withdraw not more than seventy-five thousand dollars from the fund for the fifteen month period beginning July 1, 1996 and ending September 30, 1997 to cover administrative expenditures related to the development of a premium sharing demonstration project proposal or any premium sharing demonstration project analysis requested by a committee of the legislature.
D. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations, except that all unexpended and unencumbered monies remaining on October 1, 2001 revert to the medically needy account of the tobacco tax and health care fund.
E. The state treasurer shall invest the monies in the fund and investment income shall be credited to the fund.
F. For purposes of this section, unless otherwise noted, "fund" means the premium sharing demonstration project fund.
Sec. 3.
A. Beginning October 1, 1997, the Arizona health care cost containment system administration is authorized to contract with health plans that contract with the Arizona health care cost containment system pursuant to section 36-2912, Arizona Revised Statutes, in order to establish the premium sharing demonstration project to provide services to uninsured persons as authorized pursuant to this section. If the director of the Arizona health care cost containment system administration determines there is insufficient coverage in a county participating in the demonstration project, the director shall attempt to contract with a prepaid capitated provider as defined in section 36-2901, Arizona Revised Statutes, to provide services under the demonstration project. Enrollees shall pay a copayment, as specified in subsection D of this section, at the time services are rendered, and a monthly premium to obtain access to medical services. The premium sharing demonstration project fund, established pursuant to section 36-2923, Arizona Revised Statutes, as amended by this act, shall be used to subsidize portions of the enrollee's total premium costs. The total amount of state monies that may be spent in any fiscal year by the administration for the premium sharing demonstration project shall not exceed the amount appropriated or authorized by section 36-2923, Arizona Revised Statutes, as amended by this act. Enrollees shall receive medical services if they pay the required monthly premium costs minus the state subsidized amount, pay all of their copayment charges and comply with all other provisions of this section.
B. The director of the Arizona health care cost containment system administration shall administer and implement the demonstration project. The director has full operational authority and shall use healthcare group, established pursuant to section 36-2912, Arizona Revised Statutes, to carry out the administrative functions of the demonstration project and shall:
1. Establish a process for billing and collecting the enrollee's copayments and monthly premiums.
2. Maintain enrollee data information.
3. Establish an aggressive disenrollment process for enrollees who default on paying premiums or who do not comply with premium payment deadlines. The administration shall disenroll an enrollee from the demonstration project if the enrollee fails to make the required payments within a specified period of time as prescribed by the administration. Participants who leave the demonstration project shall not be eligible to reenroll for a period of twelve months from the date of disenrollment.
4. Establish a system for tracking an enrollee's premium collection and noncollection.
C. For the purposes of determining eligibility, the director of the Arizona health care cost containment system administration shall develop:
1. A presumptive eligibility application process for demonstration project applicants to be used by participating eligibility entities. The Arizona health care cost containment administration may enter into an intergovernmental agreement with the department of economic security, a county or counties or contract with the participating health plans to conduct eligibility determinations for the demonstration project. Gross annual income shall be calculated by multiplying by four the applicant's household income for the three months immediately before the application for eligibility for the premium sharing demonstration project.
2. A process to review the eligibility of the enrollee every six months.
3. Language in the contract or in the intergovernmental agreement for sanctions for erroneous eligibility determinations and a process to audit the eligibility determinations made by the entities with which the administration contracts or enters into intergovernmental agreements.
D. An enrollee shall receive health care services as prescribed in section 36-2907, Arizona Revised Statutes, and pursuant to the limitations and exclusions in this section, except that enrollees shall pay:
1. Ten dollars for each physician visit.
2. Twenty-five dollars for each emergency room visit. This fee shall be waived if the person is admitted to the hospital.
3. Fifty dollars for each inpatient stay.
4. Fifty dollars for each emergency room visit that is for a nonemergency situation.
5. Three dollars for each prescription that is filled with a generic drug and fifty per cent of the cost of each prescription that is filled with a brand name pharmaceutical unless a generic drug is unavailable or not medically appropriate, in which case the enrollee shall pay three dollars for each prescription.
6. Eight dollars for each laboratory visit.
7. Eight dollars for each X-ray service.
8. Fifty dollars for each behavioral health admission to an inpatient behavioral facility. Enrollees are eligible for a maximum of thirty days of inpatient behavioral health services annually.
9. Ten dollars for individual outpatient behavioral health services. Enrollees are eligible for a maximum of thirty outpatient behavioral health visits annually.
10. Five dollars for outpatient behavioral health group services.
11. The full cost of any nonemergency transportation.
E. Instead of the services offered pursuant to subsection D of this section, an enrollee may choose any of the benefit options available through healthcare group.
F. Unless an enrollee meets the requirements for coverage as a chronically ill person pursuant to subsection O, paragraph 1, subdivision (c) of this section, an enrollee is not eligible to receive transplant services.
G. Medical service providers may withhold nonemergency medical services to enrollees who do not pay copayments in full at the time the service is rendered.
H. The director of the Arizona health care cost containment system administration shall require as a condition of a contract with any provider that a marketing plan be developed to reach persons eligible pursuant to this section.
I. For the purposes of the demonstration project, the Arizona health care cost containment system administration shall establish the total premium costs and shall establish the portion of the monthly premium that each enrollee shall pay based on the following:
1. The enrollee's household gross income and household size. The enrollee's portion of the premium shall not exceed four per cent of the enrollee's household gross income.
2. The total amount of monies available in the premium sharing demonstration project fund established by section 36-2923, Arizona Revised Statutes, as amended by this act. The total amount of state monies that may be spent in any fiscal year by the administration for the premium sharing demonstration project shall not exceed the amount appropriated or authorized by section 36-2923, Arizona Revised Statutes, as amended by this act.
3. The administration shall establish actuarially sound capitation rates. The administration may adjust the initial capitation rates, except that any increase exceeding ten per cent of the established rate must first be reviewed by the oversight committee.
4. Chronically ill persons who have household incomes between two hundred and four hundred per cent of the federal poverty level shall pay the full premium.
J. Enrollees shall pay the required enrollee premium payment and full copayment charges established by the administration.
K. On implementation of the federal waiver for eligibility based on one hundred per cent of the federal poverty level by the federal health care financing administration, enrollees in the premium sharing demonstration project who have incomes that are less than one hundred per cent of the federal poverty guidelines as published annually by the United States department of health and human services shall not be eligible for the premium sharing demonstration project and shall reapply for the plan implemented after the waiver is approved.
L. Pregnancy shall not be considered a preexisting condition for the purposes of refusing services.
M. Once a participant is determined eligible, the participant's family members are also considered eligible. Participants shall enroll all family members who are not currently insured and who have not been insured for the preceding six months.
N. Notwithstanding any other law, Arizona health care cost containment system health plans that participate in the premium sharing demonstration project and healthcare group for the purposes of the demonstration shall not be subject to the provisions of the health insurance portability and accountability act of 1996 (P.L. 104-191) but participants in the premium sharing demonstration project shall be allowed to use enrollment in the premium sharing demonstration project as creditable coverage as defined in the health insurance portability and accountability act of 1996. A person who will lose eligibility for the premium sharing demonstration project due to excess income may elect to continue immediate, uninterrupted coverage through the Arizona health care cost containment system health plans participating in the premium sharing demonstration project but only for the duration of the premium sharing demonstration project and provided that the person pays the full amount of the monthly premium directly to healthcare group pursuant to healthcare group requirements. If a person elects conversion coverage prior to losing coverage in the premium sharing demonstration project, premiums shall be assessed based on conversion coverage premiums developed by healthcare group and all healthcare group requirements shall apply. Any conversion coverage elected by a participant in the premium sharing demonstration project shall not be considered as individual coverage under the provisions of the health insurance portability and accountability act of 1996.
O. For the purposes of this section:
1. "Enrollee" means a resident of this state and of either one of two urban counties with a population of more than five hundred thousand persons or of one of two rural counties with a population of less than five hundred thousand persons chosen by the administration to participate in the demonstration project who is a citizen of the United States or who meets the alienage requirements that are established pursuant to title 36, chapter 29, article 1, Arizona Revised Statutes, and who:
(a) Has been screened pursuant to subsection C of this section and is ineligible for services pursuant to title 11, chapter 2, Arizona Revised Statutes, or title 36, chapter 29, Arizona Revised Statutes.
(b) Submits an application for the premium sharing demonstration project as prescribed by the Arizona health care cost containment system administration.
(c) Has an annual household gross income that does not exceed two hundred per cent of the federal poverty guidelines as published annually by the United States department of health and human services. Persons who are chronically ill with a nonacute condition that is not caused by alcohol, drug or chemical addiction and that if not treated has a reasonable medical probability of causing a life-threatening situation or death and who have been eligible for health care services pursuant to section 11-297, Arizona Revised Statutes, for twelve consecutive months may have a household income that does not exceed four hundred per cent of the federal poverty guidelines as published annually by the United States department of health and human services. A state subsidy shall not be contributed to share in the cost of any enrollee whose gross income exceeds two hundred per cent of the federal poverty guidelines as published annually by the United States department of health and human services.
(d) Demonstrates that the enrollee has not been insured by a health care insurer at any time during the six months preceding the date of application. This subdivision does not apply to any applicant who is no longer eligible pursuant to section 36-2901, paragraph 4, subdivisions (a), (b), (c) and (h), Arizona Revised Statutes. This subdivision does not apply to persons who are described as chronically ill in this paragraph.
(e) Agrees to share in the cost of the premiums established by the administration pursuant to subsection I of this section.
(f) Agrees to cooperate fully with the administration in the determination of household income for the purposes of determining gross income and premium costs.
(g) Is not eligible for medicare benefits through title XVIII of the social security act or supplemental security income payments associated with blindness or disability.
(h) Is ineligible for coverage through the veterans' administration for the condition or conditions in question.
(i) Has not been found by a governmental agency or a court of law to have committed an act of fraud or abuse with respect to any cash or in-kind benefit program including temporary assistance to needy families, general assistance, food stamps, a state medicaid program or any state or county sponsored medical assistance program.
(j) Is not eligible for benefits under title XIX of the social security act.
2. "Healthcare group" means the separate organization established pursuant to section 36-2912, Arizona Revised Statutes.
3. "Plan" means the federal waiver for eligibility based on one hundred per cent of the federal poverty level and as approved by the federal health care financing administration.
4. "Population" means the population according to the most recent United States decennial census.
Sec. 4.
The Arizona health care cost containment system administration shall limit enrollment in the premium sharing demonstration project established pursuant to section 3 of this act so that annual premium expenditures by the state for the project do not exceed the annual appropriation to the project pursuant to section 36-2921, Arizona Revised Statutes, as amended by this act. The administration shall determine the number of demonstration project participants that can be enrolled. The administration shall limit the number of chronically ill enrollees to two hundred persons.
Sec. 5.
A. The premium sharing demonstration project oversight committee is established consisting of:
1. Three members of the senate, appointed by the president of the senate, not more than two of whom represent the same political party. The president of the senate shall appoint one of these members to cochair the committee.
2. Three members of the house of representatives appointed by the speaker of the house of representatives, not more than two of whom represent the same political party. The speaker of the house of representatives shall appoint one of these members to cochair the committee.
B. The committee shall:
1. Review the capitation rates and premiums established by the Arizona health care cost containment system administration.
2. Submit a report to the governor, the speaker of the house of representatives, the president of the senate, the secretary of state, the director of the department of library, archives and public records and the director of the Arizona legislative council on or before November 15 of each year regarding the committee's recommendations and observations on the demonstration project's implementation and operation.
Sec. 6.
A. Beginning on April 1, 1998, the director of the Arizona health care cost containment system administration shall report semiannually to the premium sharing demonstration project oversight committee on the implementation and operation of the premium sharing demonstration project. The administration shall submit the report to the governor, the president of the senate and the speaker of the house of representatives. The director of the administration shall include in the report recommendations on shifting premium sharing demonstration project enrollees who have incomes that are less than one hundred per cent of the federal poverty guidelines as published annually by the United States department of health and human services into the new plan, when the federal waiver for eligibility based on one hundred per cent of the federal poverty level is approved by the health care financing administration.
B. Beginning on April 1, 1998, the Arizona legislative council shall submit a report semiannually to the premium sharing demonstration project oversight committee. The report shall contain the following information regarding the demonstration project:
1. An analysis of client satisfaction.
2. Program enrollment information.
3. The average annual income of the enrollee.
4. The annual medical service expenditure.
5. The total monies collected from enrollees.
6. Information necessary to analyze and evaluate the project's effectiveness or impact.
7. A review of the actual medical costs incurred and the premiums charged.
C. On or before January 1, 1999, the premium sharing demonstration project oversight committee shall submit a report to the governor, the speaker of the house of representatives and the president of the senate containing its findings regarding the overall success of the demonstration project and recommending its continuation or discontinuation.
Sec. 7.
The Arizona health care cost containment system administration is exempt from the rule making requirements of title 41, chapter 6, Arizona Revised Statutes, for the purposes of implementing the premium sharing demonstration project pursuant to this act. The administration shall report to the premium sharing oversight committee and conduct at least two public hearings, including at least one in a county with a population of less than five hundred thousand persons according to the most recent United States decennial census and chosen by the administration to participate in the demonstration project, before it adopts exempted rules. The administration shall publish adopted rules pursuant to title 41, chapter 6, Arizona Revised Statutes.
Sec. 8.
Sections 3 through 7 of this act are repealed from and after September 30, 2000.
Sec. 9.
This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.
APPROVED BY THE GOVERNOR APRIL 25, 1997.
FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 28, 1997.
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