Arizona’s New Behavioral Healthcare Laws – Part 2

As part of a three-part series. Read the first installment here.

In 2024, the Arizona legislature passed five new Arizona laws directly affecting behavioral health care in Arizona. These laws run the gamut between refining definitions, requiring peer specialist trainings, new requirements for court-ordered evaluation and treatment, increased retention of documentation, and expanding guardians’ rights. Part 1 of this series highlighted SB1062 and SB1309. Part 2 highlights SB1311 and SB1609:

(3) SB1311: mental health; oversight; data; documentation

      • Clarifies AHCCCS’ (Arizona Health Care Cost Containment System) role as being responsible for monitoring, overseeing, and evaluating its contractors and the contracted agencies providing mental health services to ensure that the services are provided in a timely, clinically effective, and efficient manner.
      • Specifically requires AHCCCS and its contractors to monitor the performance of an agency providing mental health services and charges AHCCCS to take “corrective action, which may include technical assistance, and impose civil penalties pursuant to Section 36-2918, if appropriate, suspension and termination of contracts, for agencies that [AHCCCS] finds to not be in compliance with county, state and federal laws and rules or to not be performing the services in a timely, effective and efficient manner.” (emphasis added).
      • Requires AHCCCS to create reporting requirements for members who have received a designation of SMI (serious mental illness) and standards for data collection to understand the clinical effectiveness of services provided. AHCCCS is required to analyze the data collected semiannually and to report on the same to the Governor, the President of the Senate, and the Speaker of the House of Representatives on or before December 31, 2025.
      • Requires the prepetition screening agency to state in writing on the application form if an evaluation is to be denied. A denial shall be reviewed and confirmed by the medical director of the screening agency (or their designee). If the screening agency determines that although the person does not currently meet the criteria for court-ordered evaluation, there are reasonable grounds to believe that the person has a mental disorder, is in need of further evaluation and treatment, and is able and willing to pursue private or public evaluation or treatment services available in the community, the screening agency must assist the proposed patient in finding specific evaluation or treatment services in the patient’s area and, if requested, make a direct referral for evaluation and treatment. A.R.S. § 36-521(C).
      • Instead of destroying petitions that were determined not to be required, the SB 1311 revisions require additional documentation and the retention of both the petition (and various reports annexed to it) and the explanation of why it was determined no longer necessary. A.R.S. § 36-523(E).
          • If a petition was prepared but it has been determined that the person no longer needs the evaluation, the medical director of the agency shall make a written statement explaining why the evaluation was determined to be no longer necessary. The petition, along with the medical director’s statement, must be retained together.
          • Similarly, if an application for emergency admission is denied, the application must be retained by the evaluation agency, together with a written statement by the medical director of the evaluation agency (or their designee) stating the specific reasons why the application was denied. A.R.S. § 36-524 (F).
          • In a similar vein requiring documentation and retention, if a person admitted for emergency evaluation is released, the application for emergency admission shall be retained together with a written statement by the medical director of the evaluating agency stating why the release was appropriate. A.R.S. § 36-527(C).
      • A.R.S. § 36-531(G) requires that the medical director of an evaluation agency document why a person being evaluated on an inpatient basis is released and why further evaluation was not appropriate. A copy of this written statement must be filed with the court that entered the order for court-ordered evaluation, and this must be filed as part of the court record and made part of the patient’s medical record.
      • Signed into law on 4-16-24. You can see the full text of changes here: https://legiscan.com/AZ/text/SB1311/2024

(4) SB1609: behavioral health; AHCCCS; health facilities

      • Requires AHCCCS’ contracted housing program administrators to minimize duplicative paperwork and limit who can receive PHI (protected health information) of members with serious mental illness who are receiving services. A.R.S. § 36-2903.14.
      • Prohibits contracted housing program administrators from selling or sharing any member’s PHI unless authorized by law. A.R.S. § 36-2903.14.
      • Requires AHCCCS to monitor its contractors’ oversight of peer specialists to ensure they meet qualifications and receive the required supervision and training. A.R.S. § 36-2903.15(A).
          • Beginning October 1, 2025, peer specialists must complete training developed by AHCCCS (in addition to other required qualifications) and training that includes psychosis-specific content, including anosognosia.  A.R.S. § 36-2903.15(B).
      • Requires inpatient behavioral health service providers to provide to every SMI patient (or to the patient’s representative), upon discharge, an accurate list of all necessary medications, including psychiatric medications and all other prescription medications and over-the-counter medications, that are to be taken regularly or as needed. This list must also be provided to a designated person from the residential care institution or health care institution that is to provide outpatient behavioral health services to the patient as identified by the discharging health care institution that provided inpatient behavioral health services to the patient. A.R.S. § 36-2903.16.
      • Signed into law on 5-29-24. You can see the full text of changes here: https://legiscan.com/AZ/text/SB1609/2024

Stay tuned for Part 3 next month, where we’ll continue highlighting the new Arizona behavioral healthcare laws from 2024.

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About the Author:

An attorney in Dickinson Wright’s Phoenix office, Erica Erman focuses her practice on behavioral health care and the intersection of municipal laws with health care regulations. Her work includes administrative hearings, HIPAA compliance, Stark and AKS regulations, state licensing, contract drafting, and health care transactions. Drawing from her experience litigating state and federal False Claims Act cases, she also provides counsel on the Parity Act and psychiatric urgent care. She can be reached at 602-889-5342 or EErman@dickinsonwright.com. Her biography can be accessed here.