The Overview

If your health coverage comes through Arizona's Medicaid program, the managed care companies that deliver it will soon be selected and kept based on how well they actually perform. Arizona's AHCCCS procurement and contracting bill, SB 1713 became law when Gov. Katie Hobbs (D) signed it June 22. ​

The law follows a court fight over how the state awards Medicaid contracts: KJZZ reported that a judge found the Arizona Health Care Cost Containment System (AHCCCS) had improperly awarded contracts covering about 26,000 people, and the Arizona Republic reported that an administrative law judge recommended canceling and reopening the procurement for the state's long-term care program for elderly and physically disabled residents. The new framework takes effect Oct. 1, 2027.

What the Law Does

The law adds a new procurement article to the statutes governing AHCCCS and its Long-Term Care System and Children's Health Insurance Program. AHCCCS must select and retain managed care contractors through what the law calls the Arizona Hybrid Model:

  • Contractors are evaluated against a standardized performance rubric over a four-year phase, and the administration selects and retains them based on that performance.
  • AHCCCS must establish a single statewide master contract.
  • No contractor may be auto-assigned members in a way that pushes its share above 20 percent of total enrollment in any program in any year.
  • The state administration must also establish a performance bond requirement for managed care contractors.
  • If a contractor disputes a performance determination, the Office of Administrative Hearings can only check whether the rubric was applied correctly, and its decision is final.

Legislative Status

Sen. T.J. Shope (R), the Senate president pro tempore, was the bill's sole sponsor. The Senate passed it 16-12 on Feb. 26. The House passed it 37-18 on June 11. The Senate passed it 21-8 on June 12.

Shope framed the bill as a response to contracting problems under the governor who signed it, saying: "What we have seen under the Hobbs administration exposed serious weaknesses in how state contracts are awarded and monitored," according to Arizona Senate Republicans. The Arizona Medical Association noted its opposition over patient-safety and care-coordination concerns.

---

AllCiv makes it easy to stay politically informed and involved.

---

Spot something wrong? Report an issue with this article