ARIZONA STATE SENATE

RESEARCH STAFF

TODD MADEKSZA

LEGISLATIVE RESEARCH ANALYST

BANKING & INSURANCE COMMITTEE

Telephone: (602) 542-3171

Facsimile: (602) 542-7833

TO: Members of the Senate

BANKING & INSURANCE COMMITTEE

DATE: February 19, 2002

SUBJECT: Proposed Strike Everything Amendment to S.B. 1150

Purpose

Eliminates the ability of the Director of the Department of Insurance (DOI) to set the definition of basic health care solely through rulemaking while maintaining the current definition of basic health care plan in rule and DOI’s ability to implement current and future legislation through the rulemaking process.

Background

S.B. 1330 was passed in 2000 and established DOI’s authority to regulate HCSOs in Arizona. Following legislation that transferred oversight of Arizona’s Health Care Service Organization (HCSOs) industry from the Department of Health Services (DHS) to the DOI, concern was raised by the industry regarding the scope of the Director’s ability to set and/or implement policy in the rulemaking process.

The strike everything amendment to S.B. 1150 clarifies that the current rule defining basic health care, imported from DHS to DOI, maintains its standing, while at the same time removes expansion capabilities from the Director of DOI, through rulemaking procedures. The measure also ensures that the Director maintains authority to engage the rulemaking process necessary to implement S.B. 1330.

There is no anticipated fiscal impact associated with the amendment to S.B. 1150.

Provisions

1. Strikes definition of and references to “basic health care services.”

2. Clarifies the Director’s authority to determine the appropriateness of HCSOs in providing health care services and to adopt rules furthering implementation of legislation regulating the organizations.

3. Provides for a general effective date.

TM/jas