By Ethan Faverino |
Arizona State Senator Mark Finchem (R-LD11) is questioning a request by the Arizona Health Care Cost Containment System (AHCCCS) to pause 30 pending administrative appeals involving a healthcare provider while the agency pursues a separate lawsuit over the same disputes.
AHCCCS filed the motion September 2 with the Arizona Office of Administrative Hearings, asking an administrative law judge to stay the pending proceedings involving Prorenata Labs and six AHCCCS-contracted health plans.
The request has drawn scrutiny from Finchem, co-chair of the Joint Legislative Audit Committee, who argues that the move raises broader questions about whether Arizona residents and businesses can rely on the state’s administrative hearing process when challenging government decisions.
“This is bigger than one laboratory and one billing dispute. It is about whether Arizonans can trust the process when they challenge the government,” stated Senator Finchem.
The underlying dispute concerns reimbursement for certain COVID-19 tests. Among the questions being litigated is whether the tests are subject to a maximum reimbursement rate, typically $100 per test, and whether an out-of-network laboratory can receive payment for non-emergency services provided without prior authorization or documented urgent medical need.
According to Finchem, AHCCCS acknowledges that hundreds of similar cases have already proceeded through administrative hearings and were resolved in favor of AHCCCS and its contracted health plans.
“The Legislature has already paid for an independent hearing system so people and businesses can challenge government actions without being forced into a more expensive court fight,” said Finchem. “AHCCCS says it has already prevailed in hundreds of these cases through that process. If it worked hundreds of times, the agency must explain why it now wants 30 pending appeals frozen while it pursues a different legal strategy in court.”
AHCCCS argues that temporarily pausing the administrative hearings would reduce costs, prevent duplicative litigation, and avoid potentially inconsistent rulings between the administrative and judicial proceedings.
An administrative law judge has not yet ruled on the agency’s request.
The Office of Administrative Hearings was established to provide an independent forum for individuals and businesses challenging decisions made by state agencies.
Finchem said the Legislature needs to determine whether AHCCCS’s request could undermine that process or establish a precedent that other state agencies could use when facing administrative challenges.
“We are not deciding whether this laboratory is owed money,” added Finchem. “We are asking why an executive agency wants to halt established proceedings and shift the legal question to a lawsuit it initiated.”
Finchem said he intends to use the Joint Legislative Audit Committee’s oversight authority to examine the circumstances surrounding AHCCC’s request.
Among the questions he wants answered are how long the 30 appeals could be delayed, how much the Superior Court litigation could cost taxpayers, why AHCCCS changed its approach after prevailing in hundreds of administrative cases, and whether the agency considers its strategy a potential precedent for other disputes involving state agencies.
“Without a full and public explanation, this smells like another attempt by the Hobbs administration to cover up agency actions,” said Finchem. “If this becomes a playbook for state agencies, the consequences will reach far beyond this case. I intend to use the Joint Legislative Audit Committee’s oversight authority to get the facts, demand answers, and determine whether legislative or audit action is necessary. Due process cannot exist only when it is convenient for the government.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
