36-2986

36-2986. Administration; powers and duties of
director

A. The director has full operational authority to adopt rules or to use the
appropriate rules adopted for article 1 of this chapter to implement this article,
including any of the following:

1. Contract administration and oversight of contractors.

2. Development of a complete system of accounts and controls for the program
including provisions designed to ensure that covered health and medical services provided
through the system are not used unnecessarily or unreasonably including inpatient
behavioral health services provided in a hospital.

3. Establishment of peer review and utilization review functions for all
contractors.

4. Development and management of a contractor payment system.

5. Establishment and management of a comprehensive system for assuring quality of
care.

6. Establishment and management of a system to prevent fraud by members,
contractors and health care providers.

7. Development of an outreach program. The administration shall coordinate with
public and private entities to provide outreach services for children under this article.
Priority shall be given to those families who are moving off welfare. Outreach activities
shall include strategies to inform communities, including tribal communities, about the
program, ensure a wide distribution of applications and provide training for other
entities to assist with the application process.

8. Coordination of benefits provided under this article for any member. The
director may require that contractors and noncontracting providers are responsible for
the coordination of benefits for services provided under this article. Requirements for
coordination of benefits by noncontracting providers under this section are limited to
coordination with standard health insurance and disability insurance policies and similar
programs for health coverage. The director may require members to assign to the
administration rights to all types of medical benefits to which the person is entitled,
including first party medical benefits under automobile insurance policies. The state has
a right of subrogation against any other person or firm to enforce the assignment of
medical benefits. The provisions of this paragraph are controlling over the provisions of
any insurance policy that provides benefits to a member if the policy is inconsistent
with this paragraph.

9. Development and management of an eligibility, enrollment and redetermination
system including a process for quality control.

10. Establishment and maintenance of an encounter claims system that ensures that
ninety per cent of the clean claims are paid within thirty days after receipt and
ninety-nine per cent of the remaining clean claims are paid within ninety days after
receipt by the administration or contractor unless an alternative payment schedule is
agreed to by the contractor and the provider. For the purposes of this paragraph, "clean
claims" has the same meaning prescribed in section 36-2904, subsection G.

11. Establishment of standards for the coordination of medical care and member
transfers.

12. Requiring contractors to submit encounter data in a form specified by the
director.

13. Assessing civil penalties for improper billing as prescribed in section
36-2903.01, subsection L.

B. Notwithstanding any other law, if Congress amends title XXI of the social
security act and the administration is required to make conforming changes to rules
adopted pursuant to this article, the administration shall request a hearing with the
joint health committee of reference for review of the proposed rule changes.

C. The director may subcontract distinct administrative functions to one or more
persons who may be contractors within the system.

D. The director shall require as a condition of a contract with any contractor that
all records relating to contract compliance are available for inspection by the
administration and that these records be maintained by the contractor for five
years. The director shall also require that these records are available by a contractor
on request of the secretary of the United States department of health and human services.

E. Subject to existing law relating to privilege and protection, the director shall
prescribe by rule the types of information that are confidential and circumstances under
which this information may be used or released, including requirements for
physician-patient confidentiality. Notwithstanding any other law, these rules shall be
designed to provide for the exchange of necessary information for the purposes of
eligibility determination under this article. Notwithstanding any other law, a member's
medical record shall be released without the member's consent in situations of suspected
cases of fraud or abuse relating to the system to an officer of this state's certified
Arizona health care cost containment system fraud control unit who has submitted a
written request for the medical record.

F. The director shall provide for the transition of members between contractors and
noncontracting providers and the transfer of members who have been determined eligible
from hospitals that do not have contracts to care for these persons.

G. To the extent that services are furnished pursuant to this article a contractor
is not subject to title 20 unless the contractor is a qualifying plan and has elected to
provide services pursuant to this article.

H. As a condition of a contract, the director shall require contract terms that are
necessary to ensure adequate performance by the contractor. Contract provisions required
by the director include the maintenance of deposits, performance bonds, financial
reserves or other financial security. The director may waive requirements for the posting
of bonds or security for contractors who have posted other security, equal to or greater
than that required by the administration, with a state agency for the performance of
health service contracts if monies would be available from that security for the system
on default by the contractor.

I. The director shall establish solvency requirements in contract that may include
withholding or forfeiture of payments to be made to a contractor by the administration
for the failure of the contractor to comply with a provision of the contract with the
administration. The director may also require contract terms allowing the administration
to operate a contractor directly under circumstances specified in the contract. The
administration shall operate the contractor only as long as it is necessary to assure
delivery of uninterrupted care to members enrolled with the contractor and to accomplish
the orderly transition of members to other contractors or until the contractor
reorganizes or otherwise corrects the contract performance failure. The administration
shall not operate a contractor unless, before that action, the administration delivers
notice to the contractor providing an opportunity for a hearing in accordance with
procedures established by the director. Notwithstanding the provisions of a contract,
if the administration finds that the public health, safety or welfare requires emergency
action, it may operate as the contractor on notice to the contractor and pending an
administrative hearing, which it shall promptly institute.

J. For the sole purpose of matters concerning and directly related to this article,
the administration is exempt from section 41-192.

K. The director may withhold payments to a noncontracting provider if the
noncontracting provider does not comply with this article or adopted rules that relate to
the specific services rendered and billed to the administration.

L. The director shall:

1. Prescribe uniform forms to be used by all contractors and furnish uniform forms
and procedures, including methods of identification of members. The rules shall include
requirements that an applicant personally complete or assist in the completion of
eligibility application forms, except in situations in which the person is disabled.

2. By rule, establish a grievance and appeal procedure that conforms with the
process and the time frames specified in article 1 of this chapter. If the program is
suspended or terminated pursuant to section 36-2985, an applicant or member is not
entitled to contest the denial, suspension or termination of eligibility for the program.

3. Apply for and accept federal monies available under title XXI of the social
security act. Available state monies appropriated to the administration for the
operation of the program shall be used as matching monies to secure federal monies
pursuant to this subsection.

M. The administration is entitled to all rights provided to the administration for
liens and release of claims as specified in sections 36-2915 and 36-2916 and shall
coordinate benefits pursuant to section 36-2903, subsection F and be a payor of last
resort for persons who are eligible pursuant to this article.

N. The director shall follow the same procedures for review committees, immunity
and confidentiality that are prescribed in article 1 of this chapter.