Arizona Revised Statutes § 36-2944.01 Removal Of Medicaid Special Exemption For Payments To Program Contractors; Civil Penalty

36-2944.01. Removal of medicaid special exemption for payments to program contractors; civil penalty

A. Notwithstanding any other law, beginning on October 1, 2003, each program contractor shall pay to the director of the department of insurance a tax equal to two per cent of the total capitation, including reinsurance, and any other reimbursement paid to the program contractor by the administration for persons eligible pursuant to section 36-2931, paragraph 5. The tax shall be paid in four payments pursuant to subsection C of this section and deposited in the state general fund pursuant to sections 35-146 and 35-147.

B. The program contractor shall not deduct any disallowance or penalty imposed by the administration pursuant to this chapter from the financial information submitted to the director of the department of insurance.

C. Each program contractor shall file the estimated tax and documentation with the director of the department of insurance on a form prescribed by the director of the department of insurance. A program contractor shall make estimated tax payments to the director of the department of insurance for deposit in the state general fund pursuant to sections 35-146 and 35-147. The tax payments are due on or before September 15, December 15, March 15 and June 15 of each year. The amount of the payments shall be an estimate of the tax due for the quarter that ends in the month that payment is due.

D. On or before April 1, 2004 and annually on or before April 1 thereafter, the director of the department of insurance shall use data provided by the administration to reconcile the amount paid by each program contractor pursuant to this section with the actual amount of title XIX reimbursement made by the administration to the program contractor in the preceding calendar year. If there is a discrepancy in the two amounts, the director of the department of insurance shall notify the program contractor of the difference, provide a notice of right of appeal and bill the program contractor for the unpaid amount of the premium tax or, if there is an overpayment, the director of the department of insurance shall either refund the amount of the overpayment to the contractor or issue a credit for the amount of the overpayment that the program contractor can apply against future tax obligations prescribed by this section.

E. A contractor who fails to file an estimated payment or pay an unpaid premium tax as prescribed by this section is subject to a civil penalty equal to the greater of twenty-five dollars or five per cent of the amount due and is subject to interest on the amount due at the rate of one per cent per month from the date the amount was due.

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Last modified: October 13, 2016