Reference Title: premium sharing demonstration project

AN ACT
AMENDING SECTION 36-2921, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 1998, CHAPTER 1, SECTION 108, CHAPTER 214, SECTION 9 AND CHAPTER 256, SECTION 2; REPEALING SECTION 36-2921, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 1998, FOURTH SPECIAL SESSION, CHAPTER 4, SECTION 3; AMENDING LAWS 1997, CHAPTER 186, SECTION 3, AS AMENDED BY LAWS 1997, SECOND SPECIAL SESSION, CHAPTER 1, SECTION 1 AND LAWS 1998, CHAPTER 214, SECTION 21; BLENDING MULTIPLE ENACTMENTS; RELATING TO THE PREMIUM SHARING DEMONSTRATION PROJECT.

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

Section 1. Section 36-2921, Arizona Revised Statutes, as amended by Laws 1998, chapter 1, section 108, chapter 214, section 9 and chapter 256, section 2, is amended to read:

36-2921 . Tobacco tax allocation

A. Subject to the availability of monies in the medically needy account established pursuant to section 36-774 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) and who becomes eligible for a heart, lung, heart-lung, liver or autologous and allogeneic bone marrow transplant pursuant to section 36-2907, subsection A, paragraph 11, subdivision (d) as determined by the administrator and to any person who is eligible pursuant to section 36-2901, paragraph 4, subdivision (b) and who becomes eligible for a lung or heart-lung transplant pursuant to section 36-2907, subsection A, paragraph 11, subdivision (b), as determined by the administrator.

2. Beginning on August 1, 1995 and on the first day of each month thereafter UNTIL JULY 1, 1998 , 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. THE ADMINISTRATION SHALL WITHDRAW THE SUM OF NINE MILLION TWO HUNDRED FIFTY-ONE THOUSAND ONE HUNDRED DOLLARS IN FISCAL YEAR 1998-1999 FOR DEPOSIT IN THE CHILDREN'S HEALTH INSURANCE PROGRAM FUND ESTABLISHED BY SECTION 36-2995 TO PAY THE STATE SHARE OF THE CHILDREN'S HEALTH INSURANCE PROGRAM ESTABLISHED PURSUANT TO ARTICLE 4 OF THIS CHAPTER.

3. 4. From and after August 1, 1995 and each year thereafter, the administration shall transfer the following monies to the department of health services to be allocated as follows if the department awards a contract:

(a) Five million dollars, for the mental health grant program established pursuant to section 36-3414.

(b) Six million dollars, for primary care services established pursuant to section 36-2907.05.

(c) Five million dollars, for grants to the QUALIFYING community health centers established pursuant to section 36-2907.06 , SUBSECTION A .

4. 5. The administration shall transfer up to five hundred thousand dollars for fiscal years 1997-1998 and 1998-1999 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. The department of health services shall report to the joint legislative oversight committee on the tobacco tax and health care fund no later than October 1, 1998 regarding the operation and effectiveness of the detoxification pilot programs funded pursuant to this subsection. The report shall also include recommendations regarding the continued funding of these programs.

5. 6. The administration shall transfer up to two hundred fifty thousand dollars annually for fiscal years 1995-1996, 1996-1997, 1997-1998 and 1998-1999 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. 7. The administration shall transfer up to two 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. 8. 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. BEGINNING ON OCTOBER 1, 1997, the administration shall annually withdraw monies from the medically needy account not to exceed two FOUR per cent of the sum of any monies transferred pursuant to this paragraph for administrative costs associated with the premium sharing demonstration project. ADMINISTRATIVE COSTS IN EXCESS OF TWO PER CENT SHALL BE FUNDED FROM THE INTEREST PAYMENTS FROM THE TWENTY MILLION DOLLARS WITHDRAWN FROM THE MEDICALLY NEEDY ACCOUNT TO FUND THE PREMIUM SHARING PROGRAM PURSUANT TO THIS PARAGRAPH.

8. 9. 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 YEARS 1996-1997 AND 1997-1998 AND TWO MILLION FIVE HUNDRED THOUSAND DOLLARS IN FISCAL YEAR 1998-1999 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.

9. 10 Subject to the availability of monies, the sum of one million dollars shall be transferred annually to the health crisis fund for use as prescribed in section 36-797.

10. 11. Subject to the availability of monies, the Arizona health care cost containment system administration shall transfer to the aging and adult administration in the department of economic security the sum of five hundred thousand dollars annually beginning in fiscal year 1997-1998 for services provided pursuant to section 46-192, subsection A, paragraph 4. Services shall be used for persons who meet the low income eligibility criteria developed by the aging and adult administration.

11. 12. Subject to the availability of monies, the Arizona health care cost containment system administration shall transfer to the department of health services the sum of two hundred thousand dollars annually beginning in fiscal year 1998-1999 for contracts entered into pursuant to section 36-132, subsection D, with hospitals THAT ARE licensed by the department of health services AND that perform nonrenal organ transplant operations. These contracts shall not include payments for transportation to and from treatment facilities.

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 four 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. Repeal

Section 36-2921, Arizona Revised Statutes, as amended by Laws 1998, fourth special session, chapter 4, section 3, is repealed.

Sec. 3. Laws 1997, chapter 186, section 3, as amended by Laws 1997, second special session, chapter 1, section 1 and Laws 1998, chapter 214, section 21, is amended to read:

Sec. 3. Premium sharing demonstration project; implementation; requirements; definitions

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 capitate CAPITATED provider as defined in section 36-2901, Arizona Revised Statutes, to provide services under the demonstration project.

B. Enrollees shall pay a copayment, as specified in subsection D  G 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.

C. 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.

D. THE ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM IS THE PAYOR OF LAST RESORT PURSUANT TO SECTION 36-2903, SUBSECTION G, ARIZONA REVISED STATUTES.

B. E. 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 VOLUNTARILY TERMINATE ELIGIBILITY FOR the demonstration project shall OR WHO DO NOT PAY THE REQUIRED PREMIUMS ARE 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.

5. RECOVER ANY THIRD PARTY COLLECTIONS AND ARE ENTITLED TO A LIEN PURSUANT TO SECTIONS 36-2915 AND 36-2916, ARIZONA REVISED STATUTES.

6. COORDINATE BENEFITS PURSUANT TO SECTION 36-2903, ARIZONA REVISED STATUTES.

7. ESTABLISH A GRIEVANCE AND APPEALS PROCESS THAT CONFORMS WITH THE PROCESS AND TIME FRAMES IN TITLE 36, CHAPTER 29, ARTICLE 1, ARIZONA REVISED STATUTES.

C. F. 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 BASED ON INCOME RECEIVED DURING THE MONTH IMMEDIATELY PRECEDING the application for eligibility for the premium sharing demonstration project.

2. A process to review the eligibility of the enrollee every six TWELVE months. ON REDETERMINATION, THE ADMINISTRATION SHALL CALCULATE GROSS ANNUAL INCOME FOR ENROLLEES PURSUANT TO THIS PARAGRAPH.

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. G. 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 GROUP outpatient behavioral health group services.

11. The full cost of any nonemergency transportation.

E. Unless an enrollee meets the requirements for coverage as a chronically ill person pursuant to subsection O, paragraph 2, subdivision (d) of this section, an enrollee is not eligible to receive transplant services.

H. ENROLLEES ARE ELIGIBLE FOR CORNEA AND KIDNEY TRANSPLANT SERVICES AND IMMUNOSUPPRESSANT DRUGS. ENROLLEES WHO ARE CHRONICALLY ILL AS DEFINED IN THIS SECTION ARE ELIGIBLE FOR ALL TRANSPLANTS SPECIFIED IN SECTION 36-2907, ARIZONA REVISED STATUTES.

I. ENROLLEES ARE ELIGIBLE FOR MEDICALLY NECESSARY BREAST RECONSTRUCTIONS FOLLOWING A MASTECTOMY PERFORMED BY A CONTRACTED HEALTH PLAN PURSUANT TO THIS SECTION.

F. J. Medical service providers may withhold nonemergency medical services to enrollees who do not pay copayments in full at the time the service is rendered.

G. K. 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.

H. L. 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. An enrollee with an annual gross household income of up to and including two hundred per cent of the federal poverty guidelines shall pay a portion of the premium that does not exceed four per cent of the enrollee's household gross income. An enrollee who is chronically ill pursuant to subsection O  R , paragraph 2  1 , subdivision (d) of this section and who has an annual gross household income above two hundred per cent of the federal poverty guidelines but not more than four hundred per cent of the federal poverty guidelines shall pay the full premium established by the administration.

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.

I. M. Enrollees shall pay the required enrollee premium payment and full copayment charges established by the administration.

J. N. 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 ARE not be eligible for the premium sharing demonstration project and shall reapply for the plan implemented after the waiver is approved.

K. O. On implementation of a state children's health insurance program established pursuant to title XXI of the social security act, any child who is eligible for that program is not eligible for the premium sharing demonstration project. Eligibility for the premium sharing demonstration project shall continue for not more than ninety days after the implementation date of the state children's health insurance program to allow the enrollee sufficient time to submit an application and to be determined eligible for that program. If the enrollee does not apply for the state children's health insurance program, eligibility for the premium sharing demonstration project terminates ninety days after the implementation date of the state children's health insurance program.

L. P. Pregnancy shall not be considered a preexisting condition for the purposes of refusing services.

M. Q. 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 VOLUNTARILY LOST INSURANCE IN the preceding six months unless the household member is eligible pursuant to subsection J or K N OR O of this section.

N. R. 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 ARE 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.

O. S. For the purposes of this section:

1. "Chronic disease" means:

(a) Alpha-1-Antitrypsin deficiency.

(b) Amyotrophic lateral sclerosis.

(c) Cardiomyopathy.

(d) Chronic liver disease.

(e) Chronic pancreatitis.

(f) Chronic rheumatoid arthritis.

(g) Congenital heart disease.

(h) Cystic fibrosis.

(i) Growth hormone deficiency.

(j) Hematologic cancer.

(k) Hemophilia.

(l) History of any solid organ transplant.

(m) Acquired immunodeficiency syndrome.

(n) Human immunodeficiency virus.

(o) Hodgkins disease.

(p) Metastatic cancer.

(q) Multiple sclerosis.

(r) Muscular dystrophies.

(s) Pulmonary hypertension.

(t) Sickle cell disease.

2. "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 and 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  F 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) Except as provided in subdivision (d) of this paragraph, 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.

(d) Has an annual household gross income of between zero and four hundred per cent of the federal poverty guidelines and who has at least one chronic disease as defined in this subsection. If the chronic disease is caused by alcohol, drug or chemical addiction, the applicant is not eligible for the premium sharing demonstration project. A person who is chronically ill and who has an annual gross household income above two hundred per cent of the federal poverty guidelines shall have been eligible for health care services pursuant to section 11-297, Arizona Revised Statutes, for twelve OUT OF THE PREVIOUS FIFTEEN consecutive months immediately preceding the date of application for the premium sharing program. A direct 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.

(e) Demonstrates that the enrollee has not been insured by a health care insurer or healthcare group VOLUNTARILY LOST INSURANCE 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, or to a person who is chronically ill and who has an annual household gross income above two hundred per cent of the federal poverty guidelines but not more than four hundred per cent of the federal poverty guidelines. THE REQUIREMENT THAT AN ENROLLEE BE WITHOUT HEALTH CARE COVERAGE FOR SIX MONTHS PURSUANT TO THIS SUBDIVISION DOES NOT APPLY TO A PERSON WHO IS ENROLLED IN THE PREMIUM SHARING DEMONSTRATION PROJECT.

(f) Agrees to share in the cost of the premiums established by the administration pursuant to subsection H  L of this section.

(g) Agrees to cooperate fully with the administration in the determination of household income for the purposes of determining gross income and premium costs.

(h) Is not eligible for medicare benefits through title XVIII of the social security act or supplemental security income payments associated with blindness or disability.

(i) Is ineligible for coverage through the veterans' administration for the condition or conditions in question.

(j) 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.

(k) Is not eligible for benefits under title XIX of the social security act. However, women who are eligible for the sixth omnibus budget reconciliation act extension may apply for the premium sharing demonstration project.

(l) IS ELIGIBLE FOR COVERAGE BASED ON THE ALLOCATION ESTABLISHED IN SECTION 36-2921, ARIZONA REVISED STATUTES.

3. "Federal poverty guidelines" means the guidelines published annually by the United States department of health and human services.

4. "Healthcare group" includes the separate organization established pursuant to section 36-2912, Arizona Revised Statutes.

5. "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.

6. "Population" means the population according to the most recent United States decennial census.