HB 2903
Initials AG Page 1 House Engrossed
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
Second Regular Session
House: APPROP DP 9-7-1-0
HB2903: health care; 2024-2025
Sponsor: Representative Livingston, LD 28
House Engrossed
Overview
Contains provisions relating to health care needed to implement the FY 2025 budget.
History
The Arizona Legislature adopts a budget for each fiscal year (FY) that contains general
appropriations. Article IV, Section 20, Part 2, Constitution of Arizona, requires the General
Appropriations Act (feed bill) to contain only appropriations for the different state
departments, state institutions, public schools and interest on public debt. Statutory changes
necessary to reconcile the appropriations made in the feed bill and other changes are drafted
into separate budget bills. These bills are prepared according to subject area.
Provisions
Arizona Health Care Cost Containment System (AHCCCS)
1. Requires AHCCCS Director to report to the Joint Legislative Budget Committee (JLBC)
and the Governor's Office of strategic Planning and Budgeting (OSPB) on the amount to
be withdrawn from the Arizona Long Term Care System (ALTCS) Fund annually on
December 1. (Sec. 1)
2. Requires the ALTCS Fund report to include the calculations AHCCCS used to compute
the total amount of the surplus and the apportionment of the surplus between each county
and the state. (Sec. 1)
3. Requires by December 31, 2025, for FY 2025, AHCCCS to transfer to the counties any
portion necessary to comply with the Patient Protection and Affordable Care Act
regarding the counties' proportional share of this state's contribution. (Sec. 5)
4. Allows AHCCCS, for FY 2025 and 2026, to use the hospital assessment to fund a portion
of the nonfederal share of the cost of behavioral health services for certain AHCCCS
member populations. (Sec. 6)
5. Exempts AHCCCS from rulemaking requirements for two years for the purpose of
implementing the hospital assessment, except that AHCCCS must provide notice and an
opportunity for public comment at least 30 days before establishing or implementing the
hospital assessment. (Sec. 7)
6. Allows, for the contract year beginning October 1, 2024, and ending September 30, 2025,
AHCCCS to continue the ris k contingency rate settings for all managed care
organizations (MCO) and funding for all MCO administrative funding levels that were
imposed for the contract year beginning October 1, 2010, and ending September 30, 2011.
(Sec. 11)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note HB 2903
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7. Requires AHCCCS, by January 31, 2025, to prepare and issue a report to the Governor,
Legislature, JLBC and OSPB that includes information about the aggregate spending
and aggregate utilization of mental health medications during contract years 2020-2023
and provide a copy to the Secretary of State. (Sec. 12)
8. Requires the Mental Health Medication Utilization report to include:
a) the annual aggregate gross amount spent for each mental health medication class,
b) the annual aggregate net amount spent by the state for each mental health medication
class after rebates without disclosing any information about manufacturer-negotiated
supplemental rebate agreements for any specific drug; and
c) the average annual cost by class for generic and nongeneric mental health medication.
(Sec. 12)
9. Requires the Mental Health Medication Utilization report regarding antipsychotic and
antidepressants medications to include:
a) the total number of prior authorizations submitted for nonpreferred antipsychotic and
nonpreferred antidepressant medications;
b) the percentage of prior authorization approvals and denials;
c) the generic antipsychotic and generic antidepressant medication utilization
percentages; and
d) the total amount of antipsychotic and antidepressant medication claims. (Sec. 12)
10. Stipulates that the Mental Health Medication Utilization Report cannot disclose any
information about manufactured-negotiated supplemental rebate agreements that could
compromise the competitive or proprietary nature of these agreements. (Sec. 12)
11. Continues to state that it is the intent of the Legislature for FY 2025 that AHCCCS
implement a program within its available appropriation. (Sec. 13)
County Session Law Provisions
12. Sets the annual county Arizona Long Term Care System (ALTCS) contributions for FY
2025 at $399,872,100 and:
a) outlines each county's contribution;
b) requires the State Treasurer to recover the cost of any funding that was not provided;
and
c) requires the State Treasurer to deposit monies received into the ALTCS fund. (Sec. 3)
13. Requires the counties' share of the state's contribution to comply with federal
maintenance of effort requirements. (Sec. 3)
14. Sets the FY2025 county acute care contributions at $43,176,200 and:
a) outlines each county's contribution;
b) outlines payment processes and requirements;
c) requires the State Treasurer to recover the cost of any funding that was not provided
by a county from other funds owed to that county, excluding the Highway User
Revenue Fund; and
d) states that the Legislature intends that the Maricopa County contribution be reduced
in each subsequent year according to changes in the GDP price deflator. (Sec. 8)
15. Continues to exclude the Proposition 204 administration costs from the county
expenditure limitations. (Sec. 9)
HB 2903
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Disproportionate Share Hospital (DSH) Payment Session Law Provisions
16. Sets the annual DSH payment allotment for the Maricopa County Special Health Care
District (District) at $113,818,500 for FY 2025 and:
a) requires the District to provide a certified public expense form for the amount of
qualifying DSH expenditures made to AHCCCS by May 1, 202 5, for all state plan
years as required by the AHCCCS state plan;
b) states that if the certification is equal to or less than $113,818,500 and AHCCCS
determines the revised amount is correct, AHCCCS must:
i. notify the Governor and the Legislature; and
ii. distribute $4,202,300 to the District and deposit the balance in the state GF.
c) states that if the certification is less than $113,818,500 and AHCCCS determines the
revised amount is not correct, AHCCCS must:
i. notify the Governor and the Legislature; and
ii. deposit the total amount of the federal financial participation in the state GF.
d) provides that if the certification is greater than $113,818,500, AHCCCS must:
i. distribute $4,202,300 to the District; and
ii. $69,654,500 of the federal financial participation in the state GF; and
e) allows AHCCCS to make additional DSH payments to the District pursuant to
statute. (Sec. 4)
17. Sets the annual DSH payment allotment to the Arizona State Hospital (ASH) at
$28,474,900 for FY 2025 and:
a) requires ASH to provide a certified public expense form for the amount of qualifying
DSH expenditures made to AHCCCS by March 31, 2025;
b) directs AHCCCS to:
i. assist ASH in determining the amount of qualifying DSH expenditures; and
ii. deposit the entire amount of federal financial participation in the state GF;
c) states that if the certification is less than $28,474,900, AHCCCS must:
i. notify the Governor and the Legislature; and
ii. deposit the entire amount of federal financial participation in the state GF; and
d) requires the certified public expense form to contain the total amount of qualifying
DSH expenditures and the amount limited by federal law. (Sec. 4)
18. Establishes the annual DSH payment allotment for private qualifying DSH hospitals at
$884,800 for FY 2025, consistent with the appropriation and the terms of the State plan
and:
a) limits payments to hospitals that either:
i. meet the mandatory definition of DSH qualifying hospital under Section 1923 of
the Social Security Act; or
ii. are located in Yuma County and contain at least 300 beds. (Sec. 4)
19. Outlines the order of priority for DSH payment allotments for private qualifying hospitals
once the preceding DSH distributions are made. (Sec. 4)
Miscellaneous Session Law Provisions
20. Exempts monies in the Collaborative Care Uptake Fund from lapsing and repeals the
fund on July 1, 2025. (Sec. 2)
21. Directs any unexpended and unencumbered monies remaining in the Collaborative Care
Uptake Fund to be transferred to the state General Fund by July 1, 2025. (Sec. 2)
22. Applies the rulemaking exemption retroactively to July 1, 2024. (Sec. 7) HB 2903
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23. Exempts county expenditures for restoration to competency treatment from county
expenditure limitation. (Sec. 10)
24. Defines mental health medication. (Sec. 12)
25. Makes technical and conforming changes. (Sec. 1, 2)