SB 1629

Senate Engrossed
behavioral health;
  contracts; network adequacy
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SENATE BILL 1629
AN
ACT
Amending title 36, chapter 29, article 1,
Arizona Revised Statutes, by adding section 36-2930.07; amending title
36, chapter 29, article 2, Arizona Revised Statutes, by adding section 36-2961;
Amending title 36, chapter 34, article 1, Arizona Revised Statutes, by adding
section 36-3414; relating to behavioral health services.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section [1.]1. Title
36, chapter 29, article 1, Arizona Revised Statutes, is amended by adding
section 36-2930.07, to read:
START_STATUTE36-2930.07. Managed care organizations; high-volume service providers;
termination without cause; written notice; determination of network adequacy;
definitions
A. Before a managed care organization
may terminate a high-volume service provider's contract without cause,
the managed care organization shall submit written notice to the administration
at least ninety days before the proposed effective date of the termination.
B. The notice to the administration
pursuant to subsection A of this section shall include all of the following:
1. Documentation showing that the
service provider is a high-volume service provider, including the
specific data sources, calculation methodology and metrics used.
2. A network adequacy study performed
by the managed care organization that evaluates and documents, at a minimum:
(a) Current and
projected posttermination service provider-to-enrollee ratios by
service provider type and geographic service area.
(b) Current
appointment wait time performance for the affected services.
(c) The patient
volume and geographic distribution of the affected services.
(d) The impact
on members who are receiving behavioral health services associated with the
member's disability.
(e) The
cumulative effect of all pending or recently completed without-cause
terminations of high-volume service providers by the managed care
organization.
(f) Any
additional factors the managed care organization or the administration
identifies as relevant to network adequacy.
3. The managed care organization's
preliminary assessment of the impact of the termination on network adequacy.
4. Any mitigation measures the
managed care organization is proposing.
C. If there is a discrepancy between
the managed care organization and the service provider of whether the service
provider is a high-volume service provider, the managed care organization
shall notify the administration and provide documentation supporting the
managed care organization's decision not to file the written notice pursuant to
subsection A of this section. The administration shall review the
documentation and decide whether the managed care organization is required to
file written notice pursuant to subsection A of this section. the
administration shall notify the service provider of the decision.
D. A managed care organization may
not terminate a high-volume service provider without cause until the
administration has reviewed the managed care organization's network adequacy
study and has provided written confirmation that applicable network adequacy
standards will continue to be met after the termination of the high-volume
service provider.� The administration shall complete its review of the network
adequacy study within ten business days after receiving the notice pursuant to
subsection A of this section.
E. If the administration agrees with
the managed care organization's decision based on the findings provided, the
administration shall both:
1. Post the managed care
organization's complete network adequacy study, including methodology, data
sources, metrics and findings, and the administration's determination on the
administration's public website and send a copy to the chairpersons of the
senate and house of representatives health and human resources committees, or
their successor committees, and the governor's office.
2. Provide written notice of the
administration's determination to the managed care organization.
F. If the administration determines
that network adequacy standards would not be met, the managed care organization
may not proceed with the high-volume service provider's termination
unless the managed care organization demonstrates to the administration's
satisfaction that network adequacy standards will be met.
G. If a managed care organization
declines to contract with a service provider or potential service provider due
to a determination of network adequacy, the managed care organization shall
complete and send to the administration a network adequacy study, including the
specific data sources, calculation methodology and metrics used to support the
denial decision. �The study must include, at a minimum:
1. Service provider-to-enrollee
ratios by service provider type.
2. Current appointment wait time
performance for the services that the applicant was to provide.
3. All pending or recently completed
terminations of high-volume service providers without cause in the
geographic area that the applicant would have served.
4. Any additional factors the managed
care organization or the administration identifies as relevant to network
adequacy.
H. Subsection G of this section
applies only to high-volume service providers.
I. The administration shall post the
managed care organization's complete network adequacy study submitted pursuant
to subsection G of this section on the administration's public website and send
a copy to the chairpersons of the senate and house of representatives health
and human resources committees, or their successor committees, and the
governor's office.
J. For
the purposes of this section:
1. "High-volume
service provider" means a service provider that meets either of the
following:
(a) Delivered
at least ten percent of any specific service for a managed care organization in
the preceding state fiscal year.
(b) Employs
more than ten percent of the actively licensed behavioral health providers in
this state.
2. "Managed care
organization" means a contractor that has a prepaid capitated contract
with the administration or a regional behavioral health authority.
3. "Service provider" means
an organization or mental health professional that meets the criteria
established by the administration and that has a contract with the
administration or a regional behavioral health authority. END_STATUTE
Sec. [2.]2. Title
36, chapter 29, article 2, Arizona Revised Statutes, is amended by adding
section 36-2961, to read:
START_STATUTE36-2961. Managed care organizations; high-volume service providers;
termination without cause; written notice; determination of network adequacy;
definitions
A. Before a managed care organization
may terminate a high-volume service provider's contract without cause,
the managed care organization shall submit written notice to the administration
at least ninety days before the proposed effective date of the termination.
B. The notice to the administration
pursuant to subsection A of this section shall include all of the following:
1. Documentation showing that the
service provider is a high-volume service provider, including the
specific data sources, calculation methodology and metrics used.
2. A network adequacy study performed
by the managed care organization that evaluates and documents, at a minimum:
(a) Current and
projected posttermination service provider-to-enrollee ratios by
service provider type and geographic service area.
(b) Current
appointment wait time performance for the affected services.
(c) The patient
volume and geographic distribution of the affected services.
(d) The impact
on members who are receiving behavioral health services associated with the
member's disability.
(e) The
cumulative effect of all pending or recently completed without-cause
terminations of high-volume service providers by the managed care
organization.
(f) Any
additional factors the managed care organization or the administration
identifies as relevant to network adequacy.
3. The managed care organization's
preliminary assessment of the impact of the termination on network adequacy.
4. Any mitigation measures the
managed care organization is proposing.
C. If there is a discrepancy between
the managed care organization and the service provider of whether the service
provider is a high-volume service provider, the managed care organization
shall notify the administration and provide documentation supporting the
managed care organization's decision not to file the written notice pursuant to
subsection A of this section. The administration shall review the
documentation and decide whether the managed care organization is required to
file written notice pursuant to subsection A of this section. the
administration shall notify the service provider of the decision.
D. A managed care organization may
not terminate a high-volume service provider without cause until the
administration has reviewed the managed care organization's network adequacy
study and has provided written confirmation that applicable network adequacy
standards will continue to be met after the termination of the high-volume
service provider. The administration shall complete its review of
the network adequacy study within ten business days after receiving the notice
pursuant to subsection A of this section.
E. If the administration agrees with
the managed care organization's decision based on the findings provided, the
administration shall both:
1. Post the managed care
organization's complete network adequacy study, including methodology, data
sources, metrics and findings, and the administration's determination on the
administration's public website and send a copy to the chairpersons of the
senate and house of representatives health and human resources committees, or
their successor committees, and the governor's office.
2. Provide written notice of the
administration's determination to the managed care organization.
F. If the administration determines
that network adequacy standards would not be met, the managed care organization
may not proceed with the high-volume service provider's termination
unless the managed care organization demonstrates to the administration's
satisfaction that network adequacy standards will be met.
G. If a managed care organization
declines to contract with a service provider or potential service provider due
to a determination of network adequacy, the managed care organization shall
complete and send to the administration a network adequacy study, including the
specific data sources, calculation methodology and metrics used to support the
denial decision. The study must include, at a minimum:
1. Service provider-to-enrollee
ratios by service provider type.
2. Current appointment wait time
performance for the services that the applicant was to provide.
3. All pending or recently completed
terminations of high-volume service providers without cause in the
geographic area that the applicant would have served.
4. Any additional factors the managed
care organization or the administration identifies as relevant to network
adequacy.
H. Subsection G of this section
applies only to high-volume service providers.
I. The administration shall post the
managed care organization's complete network adequacy study submitted pursuant
to subsection G of this section on the administration's public website and send
a copy to the chairpersons of the senate and house of representatives health
and human resources committees, or their successor committees, and the
governor's office.
J. For the purposes of this section:
1. "High-volume service
provider" means a service provider that meets either of the following:
(a) Delivered
at least ten percent of any specific service for a managed care organization in
the preceding state fiscal year.
(b) Employs
more than ten percent of the actively licensed behavioral health providers in
this state.
2. "Managed care
organization" means a contractor that has a prepaid capitated contract
with the administration or a regional behavioral health authority.
3. "Service provider" means
an organization or mental health professional that meets the criteria
established by the administration and that has a contract with the
administration or a regional behavioral health authority. END_STATUTE
Sec. [3.]3. Title 36, chapter 34, article 1, Arizona
Revised Statutes, is amended by adding section 36-3414, to read:
START_STATUTE36-3414. Managed care organizations; high-volume service providers;
termination without cause; written notice; determination of network adequacy;
definitions
A. Before a managed care organization
may terminate a high-volume service provider's contract without cause,
the managed care organization shall submit written notice to the administration
at least ninety days before the proposed effective date of the termination.
B. The notice to the administration
pursuant to subsection A of this section shall include all of the following:
1. Documentation showing that the
service provider is a high-volume service provider, including the
specific data sources, calculation methodology and metrics used.
2. A network adequacy study performed
by the managed care organization that evaluates and documents, at a minimum:
(a) Current and
projected posttermination service provider-to-enrollee ratios by
service provider type and geographic service area.
(b) Current
appointment wait time performance for the affected services.
(c) The patient
volume and geographic distribution of the affected services.
(d) The impact
on members who are receiving behavioral health services associated with the
member's disability.
(e) The
cumulative effect of all pending or recently completed without-cause
terminations of high-volume service providers by the managed care
organization.
(f) Any
additional factors the managed care organization or the administration
identifies as relevant to network adequacy.
3. The managed care organization's
preliminary assessment of the impact of the termination on network adequacy.
4. Any mitigation measures the
managed care organization is proposing.
C. If there is a discrepancy between
the managed care organization and the service provider of whether the service
provider is a high-volume service provider, the managed care organization
shall notify the administration and provide documentation supporting the
managed care organization's decision not to file the written notice pursuant to
subsection A of this section. The administration shall review the
documentation and decide whether the managed care organization is required to
file written notice pursuant to subsection A of this section. the
administration shall notify the service provider of the decision.
D. A managed care organization may
not terminate a high-volume service provider without cause until the
administration has reviewed the managed care organization's network adequacy
study and has provided written confirmation that applicable network adequacy
standards will continue to be met after the termination of the high-volume
service provider. The administration shall complete its review of
the network adequacy study within ten business days after receiving the notice
pursuant to subsection A of this section.
E. If the administration agrees with
the managed care organization's decision based on the findings provided, the
administration shall both:
1. Post the managed care
organization's complete network adequacy study, including methodology, data
sources, metrics and findings, and the administration's determination on the
administration's public website and send a copy to the chairpersons of the
senate and house of representatives health and human resources committees, or
their successor committees, and the governor's office.
2. Provide written notice of the
administration's determination to the managed care organization.
F. If the administration determines
that network adequacy standards would not be met, the managed care organization
may not proceed with the high-volume service provider's termination
unless the managed care organization demonstrates to the administration's
satisfaction that network adequacy standards will be met.
G. If a managed care organization
declines to contract with a service provider or potential service provider due
to a determination of network adequacy, the managed care organization shall
complete and send to the administration a network adequacy study, including the
specific data sources, calculation methodology and metrics used to support the
denial decision. The study must include, at a minimum:
1. Service provider-to-enrollee
ratios by service provider type.
2. Current appointment wait time
performance for the services that the applicant was to provide.
3. All pending or recently completed
terminations of high-volume service providers without cause in the
geographic area that the applicant would have served.
4. Any additional factors the managed
care organization or the administration identifies as relevant to network
adequacy.
H. Subsection G of this section
applies only to high-volume service providers.
I. The administration shall post the
managed care organization's complete network adequacy study submitted pursuant
to subsection G of this section on the administration's public website and send
a copy to the chairpersons of the senate and house of representatives health
and human resources committees, or their successor committees, and the
governor's office.
J. For the purposes of this section:
1. "High-volume service
provider" means a service provider that meets either of the following:
(a) Delivered
at least ten percent of any specific service for a managed care organization in
the preceding state fiscal year.
(b) Employs
more than ten percent of the actively licensed behavioral health providers in
this state.
2. "Managed care
organization" means a contractor that has a prepaid capitated contract
with the administration or a regional behavioral health authority. END_STATUTE