SENATE BILL 205

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Leo Jaramillo

 

 

 

 

 

AN ACT

RELATING TO HEALTH CARE; ESTABLISHING REIMBURSEMENT REQUIREMENTS FOR TOXICOLOGY SERVICES PROVIDED BY INDEPENDENT REFERENCE LABORATORIES; MAKING AN APPROPRIATION.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of the Public Assistance Act is enacted to read:

     "[NEW MATERIAL] MEDICAID REIMBURSEMENT FOR TOXICOLOGY SERVICES.--

          A. The authority shall establish medicaid reimbursement codes for toxicology services provided by an independent reference laboratory that are consistent with the provisions of this section.

          B. Medicaid reimbursement for toxicology services provided by an independent reference laboratory shall be equal to the average medicaid fee-for-service rate schedule for the healthcare common procedure coding system codes used for billing of definitive drug testing.

          C. Toxicology services shall be reimbursed pursuant to this section if the toxicology services are medically necessary, as determined by a treating health care provider, and performed in accordance with evidence-based clinical protocols adopted by the authority that are consistent with applicable behavioral health or substance use disorder treatment standards.

          D. The authority shall promulgate rules to establish protocols for medicaid reimbursement of toxicology services. While developing the rules, the authority shall consider nationally accepted clinical guidance, such as recommendations of the American society of addiction medicine that provide for:

                (1) weekly toxicology services for persons who are beginning treatment for a substance use disorder, unless clinical documentation supports a different frequency;

                (2) monthly toxicology services for persons in stable recovery from a substance use disorder, unless clinical assessment and medical necessity indicate otherwise, as specified by a treating health care provider; and

                (3) randomized toxicology services when feasible and clinically appropriate.

          E. The authority may request an independent reference laboratory to provide tax filings and certificates of good standing with the taxation and revenue department to establish that the independent reference laboratory is eligible for medicaid reimbursement pursuant to this section.

          F. Nothing in this section shall be construed to:

                (1) establish a mandatory minimum or maximum frequency for reimbursement of toxicology services; or

                (2) restrict a provider's ability to order toxicology services at a frequency supported by documented clinical necessity.

          G. As used in this section:

                (1) "financially affiliated" means a business arrangement in which one person, directly or indirectly, is controlled by, is under common control with or controls another person;

                (2) "independent reference laboratory" means a laboratory that:

                     (a) maintains a facility that is physically located in the state and is staffed by laboratory personnel who regularly and routinely report to the facility in the ordinary course of business for the receipt, handling and testing of human clinical specimens;

                     (b) is certified pursuant to the federal Clinical Laboratory Improvement Amendments of 1988, accredited by the college of American pathologists and licensed by the authority;

                     (c) is enrolled as a medicaid provider under the medicaid program administered by the authority;

                     (d) is not owned by, controlled by or financially affiliated with a hospital, a physician practice or physician group, a managed care organization or an insurer;

                     (e) performs or contracts for the performance of medicaid billing, coding, claim submission and related revenue cycle management activities that occur physically within the state; and

                     (f) follows all applicable New Mexico gross receipts tax laws and regulations;

                (3) "medicaid" means the joint federal-state health coverage program pursuant to Title 19 or Title 21 of the federal Social Security Act and rules promulgated pursuant to that act; and

                (4) "toxicology services" means laboratory testing of biological specimens, including urine, blood, saliva and hair, for the presence of drugs or alcohol."

     SECTION 2. APPROPRIATION.--One hundred thousand dollars ($100,000) is appropriated from the general fund to the health care authority for expenditure in fiscal year 2027 to administer medicaid reimbursement for toxicology services provided by independent reference laboratories. Any unexpended balance remaining at the end of fiscal year 2027 shall revert to the general fund.

     SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2026.

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