Arkansas 2025 Regular Session

Arkansas Senate Bill SB626 Compare Versions

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11 Stricken language would be deleted from and underlined language would be added to present law.
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33 State of Arkansas 1
44 95th General Assembly A Bill 2
55 Regular Session, 2025 SENATE BILL 626 3
66 4
77 By: Senator Irvin 5
88 By: Representative L. Johnson 6
99 7
1010 For An Act To Be Entitled 8
1111 AN ACT TO AMEND THE LAW CONCERNING HEALTHCARE 9
1212 PROVIDER REIMBURSEMENT; TO REQUIRE FAIR AND 10
1313 TRANSPARENT REIMBURSEMENT RATES FOR LICENSED 11
1414 AMBULATORY SURGICAL CENTERS, OUTPATIENT PSYCHIATRIC 12
1515 CENTERS, AND OUTPATIENT IMAGING FACILITIES; TO ENSURE 13
1616 PARITY IN INSURANCE PAYMENTS FOR HEALTHCARE SERVICES; 14
1717 TO AMEND THE BILLING IN THE BEST INTEREST OF PATIENTS 15
1818 ACT; TO DECLARE AN EMERGENCY; AND FOR OTHER PURPOSES. 16
1919 17
2020 18
2121 Subtitle 19
2222 TO REQUIRE FAIR AND TRANSPARENT 20
2323 REIMBURSEMENT RATES; TO ENSURE PARITY OF 21
2424 HEALTHCARE SERVICES; TO AMEND THE 22
2525 BILLING IN THE BEST INTEREST OF PATIENTS 23
2626 ACT; AND TO DECLARE AN EMERGENCY. 24
2727 25
2828 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 26
2929 27
3030 SECTION 1. DO NOT CODIFY. Legislative findings and intent. 28
3131 (a) The General Assembly finds that: 29
3232 (1) Disparities in the reimbursement rates for medical and 30
3333 imaging services performed at hospital -based outpatient departments and 31
3434 other licensed outpatient healthcare facilities can create barriers to 32
3535 competition, reduce patient access to cost -effective care, and impose 33
3636 unnecessary financial burdens on healthcare providers providing medical and 34
3737 outpatient imaging services outside of hospital facilities; 35
3838 (2) In Ark. Blue Cross & Blue Shield v. Freeway Surgery Ctr., 36 SB626
3939
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4141 2024 Ark. App. 540, the Arkansas Court of Appeals interpreted Arkansas law in 1
4242 a manner that permits insurers to reimburse licensed ambulatory surgical 2
4343 centers at rates lower than those paid to hospital -based facilities for the 3
4444 same outpatient services despite the clear legislative intent to ensure 4
4545 reimbursement on an equal basis; 5
4646 (3) The interpretation in Ark. Blue Cross & Blue Shield v. 6
4747 Freeway Surgery Ctr., 2024 Ark. App. 540. undermines competition in the 7
4848 healthcare marketplace, disincentivizes cost -efficient alternatives to 8
4949 hospital-based care, and imposes financial hardships on providers operating 9
5050 in nonhospital settings; and 10
5151 (4) Transparency in reimbursement methodologies will promote 11
5252 fairness in the healthcare marketplace and ensure that insurers comply with 12
5353 existing state laws governing provider reimbursement. 13
5454 (b) It is the intent of the General Assembly in enacting this act to: 14
5555 (1) Ensure fair and equitable reimbursement rates for medical or 15
5656 imaging services performed at licensed ambulatory surgical centers, 16
5757 outpatient psychiatric centers, and outpatient imaging facilities; 17
5858 (2) Amend the law to clarify that insurers shall not reimburse 18
5959 licensed ambulatory surgical centers at rates lower than those applied to 19
6060 hospital-based outpatient departments for equivalent healthcare services, 20
6161 thereby making the holding in Ark. Blue Cross & Blue Shield v. Freeway 21
6262 Surgery Ctr., 2024 Ark. App. 540, no longer applicable; 22
6363 (3) Reaffirm the requirement that insurers establish fair, 23
6464 transparent, and nondiscriminatory reimbursement methodologies that ensure 24
6565 insurers reimburse all licensed healthcare facilities on an equal basis for 25
6666 performing the same medical, surgical, or imaging services under § 23 -79-115; 26
6767 and 27
6868 (4) Require insurers to: 28
6969 (A) Reimburse licensed ambulatory surgical centers, 29
7070 outpatient imaging providers' facilities or centers, and outpatient 30
7171 psychiatric centers on an equal basis as hospitals and hospital -based 31
7272 outpatient departments for the same medical, surgical, and imaging services; 32
7373 (B) Disclose the insurer's reimbursement methodologies and 33
7474 rates to contracted providers; and 34
7575 (C) Ensure that reimbursement rates for services at 35
7676 ambulatory surgical centers, outpatient imaging providers facilities or 36 SB626
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7979 centers, and outpatient psychiatric centers: 1
8080 (i) Are not set below ninety percent (90%) of the 2
8181 average hospital-based outpatient rate for the same service in the applicable 3
8282 county or otherwise in county with the closest hospital facility; and 4
8383 (ii) Apply retroactively to all reimbursement claims 5
8484 and contracts in effect as of the effective date of this act, including any 6
8585 pending claims, disputes, or litigation concerning the reimbursement of 7
8686 services provided by ambulatory surgical centers, outpatient imaging 8
8787 providers' facilities or centers, and outpatient psychiatric centers. 9
8888 10
8989 SECTION 2. Arkansas Code § 23 -79-101 is amended to read as follows: 11
9090 23-79-101. Definitions. 12
9191 As used in this chapter: 13
9292 (1) "Excepted benefits" means benefits under one (1) or more, or 14
9393 any combination thereof, of the following: 15
9494 (A) Benefits not subject to requirements, including 16
9595 without limitation: 17
9696 (i) Coverage only for accident or disability income 18
9797 insurance, or any combination thereof; 19
9898 (ii) Coverage issued as a supplement to liability 20
9999 insurance; 21
100100 (iii) Liability insurance, including general 22
101101 liability insurance and automobile liability insurance; 23
102102 (iv) Workers' compensation or similar insurance; 24
103103 (v) Automobile medical payment insurance; 25
104104 (vi) Credit-only insurance; and 26
105105 (vii) Other similar insurance coverage, specified in 27
106106 regulations, under which benefits for medical care are secondary or 28
107107 incidental to other insurance benefits; 29
108108 (B) Limited-scope dental or vision benefits; 30
109109 (C) Benefits for long -term care, nursing home care, home 31
110110 health care, community -based care, or any combination thereof; 32
111111 (D) Coverage only for a specified disease or illness; 33
112112 (E) Hospital indemnity or other fixed indemnity insurance; 34
113113 and 35
114114 (F) Medicare supplemental health insurance as defined 36 SB626
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117117 under section 1882(g)(1) of the Social Security Act, 42 U.S.C. § 1
118118 1395ss(g)(1), coverage supplemental to the coverage provided under 10 U.S.C. 2
119119 § 1071 et seq., and similar supplemental coverage; 3
120120 (2) "Hospital-based outpatient department" means a healthcare 4
121121 facility that provides outpatient services to a patient at an on -site 5
122122 hospital-operated outpatient clinic or other hospital -affiliated clinic 6
123123 location; 7
124124 (3) "Hospital-based outpatient department service" means a 8
125125 healthcare service paid with an insurer’s payment system to a hospital for 9
126126 outpatient services, including without limitation imaging, surgery, and 10
127127 medical services, that are performed at a hospital -based outpatient 11
128128 department; 12
129129 (4) "Outpatient imaging facility or center" means a healthcare 13
130130 facility or provider that provides diagnostic and advanced imaging services 14
131131 to patients and uses Current Procedural Terminology codes 70010 –79999 to bill 15
132132 for the facility component of imaging services; 16
133133 (5) "Policy" means the written contract of or written agreement 17
134134 for or effecting insurance, by whatever name called, and includes all 18
135135 clauses, riders, endorsements, and papers made a part thereof; and 19
136136 (3)(A)(6)(A) "Premium" is the consideration for insurance, by 20
137137 whatever name called. 21
138138 (B) Any assessment, or any membership, policy, survey, 22
139139 inspection, service, or similar fee or charge in consideration for a policy 23
140140 is deemed part of the premium ; and 24
141141 (7) "The same or similar healthcare service" means a healthcare 25
142142 service provided to a patient identified by the same or a substantially 26
143143 similar Current Procedural Terminology code developed by the American Medical 27
144144 Association. 28
145145 29
146146 SECTION 3. Arkansas Code § 23 -79-115 is amended to read as follows: 30
147147 23-79-115. Entitlement notwithstanding policy provisions — Services 31
148148 performed by outpatient centers. 32
149149 (a)(1)(A) Notwithstanding any provisions of any individual or group 33
150150 accident and health insurance policy, or any provision of a policy, contract, 34
151151 plan, or agreement covering hospital or medical services, in cases in which 35
152152 the policy, contract, plan, or agreement provides for payment or 36 SB626
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155155 reimbursement for any healthcare service provided by hospitals or related 1
156156 facilities When an insurer under a policy, contract, plan, or agreement 2
157157 agrees to pay or reimburse for a healthcare service provided at or by a 3
158158 hospital or related facility as defined in § 20-9-201 or § 20-10-213, the 4
159159 healthcare provider, healthcare facility, or other person entitled to payment 5
160160 or reimbursement for any healthcare services at a licensed ambulatory surgery 6
161161 center, outpatient surgery center, or outpatient imaging facility or center 7
162162 under the policy, contract, plan, or agreement and is entitled to payment or 8
163163 reimbursement on an equal basis for the service when the service is provided 9
164164 by facilities licensed as outpatient surgery centers under §§ 20 -9-214 and 10
165165 20-9-215 be payment or reimbursement at a rate that is no less than ninety 11
166166 percent (90%) of the rate paid to a hospital or related facility for the same 12
167167 or similar healthcare service, as identified by the its designated Current 13
168168 Procedural Terminology code . 14
169169 (B) This subdivision (a)(1) applies notwithstanding any 15
170170 provision of: 16
171171 (i) An individual or group accident and health 17
172172 insurance policy; 18
173173 (ii) A policy, contract, plan, or agreement covering 19
174174 hospital or medical services; 20
175175 (iii) A network participation agreement; or 21
176176 (iv) An agreement between an insurer and a 22
177177 healthcare provider. 23
178178 (2) This subsection Subdivision (a)(1) of this section applies 24
179179 to insurance policies and hospital service corporation contracts that are 25
180180 delivered or issued for delivery in this state more than one hundred twenty 26
181181 (120) days after July 6, 1977, and to such other contracts, plans, or 27
182182 agreements that are entered into or effectuated in this state more than one 28
183183 hundred twenty (120) days after July 6, 1977 , including without limitation 29
184184 network participation agreements or any agreement between an insurer and a 30
185185 healthcare provider. 31
186186 (b)(1)(A) Notwithstanding any provisions of any individual or group 32
187187 accident and health insurance policy, or any provision of a policy, contract, 33
188188 plan, or agreement covering hospital or medical services, in cases in which 34
189189 the policy, contract, plan, or agreement provides for payment or 35
190190 reimbursement for any healthcare service provided by hospitals or related 36 SB626
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193193 facilities When an insurer under a policy, contract, plan, or agreement 1
194194 agrees to pay or reimburse for a healthcare service provided at or by a 2
195195 hospital or related facility as defined in § 20-9-201 or § 20-10-213, the 3
196196 healthcare provider, healthcare facility, or other the person entitled to 4
197197 payment or reimbursement or services for any healthcare services at a 5
198198 licensed ambulatory surgery center, outpatient surgery center, or outpatient 6
199199 imaging facility or center under the policy, contract, plan, or agreement is 7
200200 entitled to payment or reimbursement on an equal basis for the service when 8
201201 the service is provided by facilities licensed as outpatient psychiatric 9
202202 centers under §§ 20-9-214 and 20-9-215 be paid or reimbursed at a rate that 10
203203 is no less than ninety percent (90%) of the rate paid to a hospital or 11
204204 related facility for the same or similar healthcare service, as identified by 12
205205 the its designated Current Procedural Terminology code in the same geographic 13
206206 area. 14
207207 (B) This subdivision (b)(1) shall apply notwithstanding 15
208208 any provision of: 16
209209 (i) An individual or group accident and health 17
210210 insurance policy; 18
211211 (ii) A policy, contract, plan, or agreement covering 19
212212 hospital or medical services; 20
213213 (iii) A network participation agreement; or 21
214214 (iv) An agreement between an insurer and a 22
215215 healthcare provider. 23
216216 (2) This subsection Subdivision (b)(1) of this section applies 24
217217 to insurance policies and hospital service corporation contracts that are 25
218218 delivered or issued for delivery in this state more than one hundred twenty 26
219219 (120) days after July 20, 1979, and to such other contracts, plans, or 27
220220 agreements that are entered into or effectuated in this state more than one 28
221221 hundred twenty (120) days after July 20, 1979 , including without limitation 29
222222 network participation agreements or any agreements between an insurer and a 30
223223 healthcare provider. 31
224224 (c) The purpose of this section is to ensure that a healthcare 32
225225 provider, a healthcare facility, or other person entitled to payment or 33
226226 reimbursement for any healthcare service from an insurer is paid or 34
227227 reimbursed at a rate no more than ten percent (10%) less than the amount paid 35
228228 or reimbursed to a hospital for the same or similar healthcare service, as 36 SB626
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231231 identified by its designated Current Procedural Terminology code, in the same 1
232232 geographic area if the healthcare service is performed at an ambulatory 2
233233 surgical center, outpatient surgical center, outpatient imaging center or 3
234234 facility, or outpatient psychiatric center, subject to the following: 4
235235 (1)(A) An insurer may consider and apply the Patient Protection 5
236236 Act of 1995, § 23-99-201 et seq., and § 23 -99-801 et seq. when establishing a 6
237237 rate for payment or reimbursement for a healthcare service that is provided 7
238238 at an outpatient surgery center licensed under §§ 20 -9-214 and 20-9-215, an 8
239239 outpatient imagining facility or center, and an outpatient psychiatric center 9
240240 if the insurer annually certifies compliance with this section and § 23 -99-10
241241 204 with the State Insurance Department. 11
242242 (B) The certification required under subdivision (c)(1)(A) 12
243243 of this section shall include the following information: 13
244244 (i)(a) The insurer’s methodology for determining 14
245245 payment or reimbursement rates to include the factors, mathematical 15
246246 computations, and weights considered by the insurer in determining each 16
247247 individual healthcare provider’s reimbursement rate. 17
248248 (b) The factors under subdivision 18
249249 (c)(1)(B)(i)(a) of this section shall include without limitation: 19
250250 (1) The healthcare provider type; 20
251251 (2) Geographic location; 21
252252 (3) Complexity of the medical service; 22
253253 (4) Healthcare provider’s contractual 23
254254 agreement; 24
255255 (5) Quality measures, such as patient 25
256256 satisfaction, clinical outcomes, and adherence to clinical guidelines or 26
257257 performance metrics; 27
258258 (6) Application of utilization control 28
259259 measures, such as prior authorization or case management, to ensure services 29
260260 are medically necessary and cost -effective; 30
261261 (7) Influence of service volume or case -31
262262 load in determining the reimbursement rate; 32
263263 (8) Reimbursement adjustments to account 33
264264 for the risk profiles of the healthcare provider’s patient population, such 34
265265 as adjusting for high -risk patient groups requiring more intensive care; and 35
266266 (9) Any other factors deemed pertinent 36 SB626
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269269 by the Insurance Commissioner; 1
270270 (ii)(a) A schedule of reimbursement rates for each 2
271271 healthcare provider with which the insurer maintains an agreement referenced 3
272272 in subsections (a) and (b) of this section based on the class of healthcare 4
273273 provider and geographic location, a copy of which shall also be provided to 5
274274 applicant healthcare providers. 6
275275 (b) The amount of information included on a 7
276276 schedule of reimbursement rates under subdivision (c)(1)(B)(ii)(a) of this 8
277277 section shall be comprehensive enough to enable the healthcare provider to 9
278278 determine the manner in which the healthcare provider is paid and the amount 10
279279 that a healthcare provider will be paid under the contract for the healthcare 11
280280 provider’s services. 12
281281 (c) The schedule of reimbursement rates or 13
282282 other information submitted to a healthcare provider under this section shall 14
283283 include a description of the processes and factors that may affect the actual 15
284284 amount paid to the healthcare provider, including without limitation 16
285285 copayments, coinsurance, deductibles, risk -sharing arrangements, and 17
286286 liability of third parties. 18
287287 (d) If an actual payment for the procedures 19
288288 cannot be ascertained from the fee schedule or other information submitted to 20
289289 a healthcare provider under this section, the insurer shall provide an 21
290290 explanation of the methodology used to determine actual payment for 22
291291 procedures frequently performed by the healthcare provider that involve 23
292292 combinations of services or payment codes, such as the relative value unit 24
293293 system and conversion factor, the percentage of Medicare payment system, or 25
294294 percentage of billed charges. 26
295295 (e) As applicable, the methodology disclosure 27
296296 provided for in this section shall include the name of any relative value 28
297297 system, the version, edition, or publication date of the relative value 29
298298 system, and any applicable conversion to the relative value system or 30
299299 modification to the relative value system to account for the geographic 31
300300 location in which the healthcare provider practices; 32
301301 (iii) An analysis of any disparity in reimbursement 33
302302 rates among healthcare providers; and 34
303303 (iv) If an insurer employs or utilizes a standard 35
304304 deviation in its comparative reimbursement analysis, a detailed narrative 36 SB626
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307307 explaining the reason for the disparity and the mathematical basis for which 1
308308 the disparate reimbursement rates were derived. 2
309309 (2) A healthcare provider who contracts with an insurer shall be 3
310310 entitled to receive the information contained in subsection (c) of this 4
311311 section relating to the healthcare provider’s agreement with the insurer if 5
312312 the healthcare provider is required to first execute a confidentiality 6
313313 agreement to ensure that the insurer’s confidential or proprietary 7
314314 information remains confidential. 8
315315 (3)(A) An insurer shall not establish a payment or reimbursement 9
316316 rate for a healthcare service that is less than ninety percent (90%) of the 10
317317 average reimbursement rate for the same or similar healthcare service, as 11
318318 identified by its designated Current Procedural Terminology code, paid to 12
319319 hospital-based outpatient departments, in the county where the ambulatory 13
320320 surgical center, outpatient surgery center, outpatient imaging facility or 14
321321 center, or outpatient psychiatric center is licensed. 15
322322 (B) If a hospital or hospital -based outpatient department 16
323323 is not located in the county where the ambulatory surgical center, outpatient 17
324324 surgical center, outpatient imaging facility or center, or outpatient 18
325325 psychiatric center is located, the average reimbursement rate for the 19
326326 services provided by the ambulatory surgical center, outpatient surgical 20
327327 center, outpatient imaging facility or center, or outpatient psychiatric 21
328328 center is determined by the nearest county where a hospital or hospital -based 22
329329 outpatient department operates; and 23
330330 (3)(A) An insurer shall not attempt to reduce competition in the 24
331331 healthcare marketplace by limiting coverage for outpatient services performed 25
332332 by nonhospital facilities services. 26
333333 (B) An insurer shall cover services performed at 27
334334 ambulatory surgical centers, outpatient surgical centers, outpatient imaging 28
335335 facilities or centers, and outpatient psychiatric centers, if those services 29
336336 are covered under the insurer’s contracts for hospital -based outpatient 30
337337 department payment to hospitals in this state. 31
338338 (d)(1) This section shall not be waived by contract. 32
339339 (2) An agreement or other arrangement that violates this 33
340340 subchapter is void. 34
341341 (e)(1) The Insurance Commissioner: 35
342342 (i) Shall enforce this subchapter; and 36 SB626
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345345 (ii) May promulgate rules to implement the requirements of 1
346346 this subchapter as needed. 2
347347 (2) All remedies, penalties, and authority granted to the 3
348348 commissioner under the Trade Practices Act, § 23 -66-201 et seq., including 4
349349 the award of restitution and damages, shall be available to the commissioner 5
350350 for the enforcement of this subchapter. 6
351351 (f) A violation of this section is a deceptive act, as defined by the 7
352352 Trade Practices Act, § 23 -66-201 et seq. and § 4-88-101 et seq., except that 8
353353 the statute of limitations for private causes of action against an insurer by 9
354354 a healthcare provider shall be five (5) years for a violation of this 10
355355 section. 11
356356 12
357357 SECTION 4. Arkansas Code Title 23, Chapter 99, Subchapter 15, is 13
358358 amended to add an additional section to read as follows: 14
359359 23-99-1505. Prohibition on pricing increases or reduction of fee 15
360360 schedules. 16
361361 (a) An insurer shall not increase cost -sharing, premiums, or other 17
362362 fees, including without limitation per -month payments, on an enrollee, 18
363363 employer, or any other entity that is responsible for payment of cost -19
364364 sharing, premiums, or other fees, including without limitation per -month 20
365365 payments, on behalf of an enrollee for healthcare services under a health 21
366366 benefit plan or lower existing reimbursement rates for existing hospital 22
367367 inpatient or outpatient care or to nonhospital outpatient services or 23
368368 facilities or healthcare providers unless each of the following conditions 24
369369 are met: 25
370370 (1) The insurer's excess of capital over its mandatory control 26
371371 level RBC, as defined in § 23 -63-1302, is less than sixty -five percent (65%); 27
372372 (2) The insurer's medical loss ratio is ninety percent (90%) or 28
373373 greater on clinical services and quality improvement; and 29
374374 (3) The proposed increase receives the approval of the Insurance 30
375375 Commissioner after the commissioner confirms compliance with this section and 31
376376 § 23-79-115. 32
377377 (b)(1) For purposes of this section, the costs associated with 33
378378 carrying enrollee medical debt is an administrative cost for purposes of 34
379379 calculating the medical loss ratio. 35
380380 (2) However, clinical services shall not include any cost -36 SB626
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383383 sharing. 1
384384 2
385385 SECTION 5. DO NOT CODIFY. Severability. 3
386386 If any provision of this act or application of this act to any person 4
387387 or circumstances is held invalid, the invalidity shall not affect other 5
388388 provisions or applications of this act which can be given effect without the 6
389389 invalid provision of application, and to this end, the provisions of this act 7
390390 are declared severable. 8
391391 9
392392 SECTION 6. DO NOT CODIFY. Retroactivity. 10
393393 This act shall apply retroactively to a reimbursement claim and 11
394394 contract in effect as of the effective date of this act, including any 12
395395 pending claims, disputes, or litigation concerning the reimbursement of 13
396396 services provided by a ambulatory surgical center, outpatient imaging 14
397397 provider, facility or center, and outpatient psychiatric center. 15
398398 16
399399 SECTION 7. EMERGENCY CLAUSE. It is found and determined by the 17
400400 General Assembly of the State of Arkansas that the absence of adequate 18
401401 statutory enforcement of Arkansas Code § 23 -79-115 has resulted in arbitrary 19
402402 and discriminatory reimbursement practices that threaten the financial 20
403403 viability of ambulatory surgical centers and outpatient psychiatric centers; 21
404404 that without immediate intervention by the General Assembly to pass 22
405405 legislation to clarify enforcement, discriminatory reimbursement practices 23
406406 will continue to restrict patient access to cost -effective healthcare 24
407407 providers causing irreparable harm to Arkansas residents; and that this act 25
408408 is immediately necessary because current Arkansas law does not sufficiently 26
409409 address transparency in healthcare pricing, the absence of proper enforcement 27
410410 of health insurer reimbursement rate laws has allowed health insurers to 28
411411 ignore the application of Arkansas Code § 23 -79-115 that has been the law 29
412412 since November 17, 1979, that any willing provider laws are subordinate to 30
413413 the requirements of Arkansas Code § 23 -79-115 and proper adherence to pay -31
414414 parity statutes ensures patient access to healthcare providers of their 32
415415 choice, and that it is immediately necessary to protect against deceptive 33
416416 insurance practices that harm the delivery of healthcare and reimbursement 34
417417 for healthcare services in Arkansas. Therefore, an emergency is declared to 35
418418 exist, and this act being immediately necessary for the preservation of the 36 SB626
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421421 public peace, health, and safety shall become effective on: 1
422422 (1) The date of its approval by the Governor; 2
423423 (2) If the bill is neither approved nor vetoed by the Governor, 3
424424 the expiration of the period of time during which the Governor may veto the 4
425425 bill; or 5
426426 (3) If the bill is vetoed by the Governor and the veto is 6
427427 overridden, the date the last house overrides the veto. 7
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