House File 685 S-3181 Amend House File 685, as passed by the House, as follows: 1 1. Page 20, after line 2 by inserting: 2 < DIVISION ___ 3 NURSING FACILITY AND HOSPITAL CAPACITY AND FINANCING 4 Sec. ___. NEW SECTION . 135C.7A Nursing facility license 5 application for change of ownership —— required information. 6 1. In addition to the requirements of section 135C.7, 7 the change of ownership of a previously licensed nursing 8 facility shall be subject to approval by the department through 9 application for a license. An applicant for a nursing facility 10 license under this section shall submit all of the following 11 information to the department with the license application: 12 a. Information about the applicant’s organizational and 13 ownership structures. The applicant shall provide information 14 regarding all related parties with a five percent or greater 15 controlling interest in the applicant organization, including 16 the related party’s relationship to the applicant organization. 17 The information provided shall be updated at least thirty 18 days prior to issuance of the license if any changes in the 19 information occur. 20 b. Information regarding any related party transactions and 21 associated reimbursement structures. 22 c. Information related to the applicant’s financial 23 suitability to operate a nursing facility as verified by the 24 applicant, which shall include but is not limited to all of the 25 following: 26 (1) Financial projections for operational expenses and 27 revenues, including realistic occupancy and reimbursement rates 28 and the disclosure of any related party transactions, projected 29 for the first three years of operation. 30 (2) Projected initial cash and liquid assets relative to the 31 acquisition or start-up of the applicant’s organization. 32 (3) If the applicant is a component of a corporate chain 33 organization, no less than three years of historical financial 34 and operating information. 35 -1- HF 685.1940 (2) 90 pf/rh 1/ 6 #1.

d. Information related to the applicant’s regulatory history 1 with any other state or licensing jurisdiction as verified by 2 the applicant, which shall include but is not limited to all 3 of the following: 4 (1) Information related to any complaint, allegation, or 5 investigation concerning the applicant in any other state or 6 licensing jurisdiction. 7 (2) Affirmation that the applicant has not voluntarily 8 surrendered a license while under investigation in any other 9 state or licensing jurisdiction. 10 (3) Supporting documentation regarding the resolution 11 of any disciplinary action or complaint, allegation, or 12 investigation against the applicant in any other state or 13 licensing jurisdiction. 14 (4) Affirmation that no other nursing facility owned or 15 operated by the applicant has been subject to operation by a 16 court-appointed receiver or temporary manager. 17 2. Information required under subsection 1 shall not be 18 limited to information relating to nursing facility operations 19 but shall also include information relative to any other 20 health care operations under the control and management of 21 the applicant or related parties which may include but is 22 not limited to assisted living programs, hospice services, 23 home health agencies, or other long-term care related health 24 services. 25 3. The department may request that an applicant provide 26 additional or supplemental information with the application 27 which may include verification of cash or liquid resources to 28 maintain nursing facility operations for a period of not less 29 than two months. 30 4. The department may require an applicant to create an 31 escrow account sufficient to sustain financial operations of 32 the applicant’s nursing facility for a period of not less 33 than two months upon consideration of the timing of projected 34 deposits and disbursements during the nursing facility’s 35 -2- HF 685.1940 (2) 90 pf/rh 2/ 6

initial operating period. 1 a. The escrow account shall be sufficiently funded by the 2 applicant prior to the issuance of the nursing facility license 3 under this section. 4 b. The department, in consultation with the applicant, may 5 reduce or return the amounts held in escrow two years from 6 the date of initial commencement of operation of the nursing 7 facility. 8 c. The escrow requirement shall be terminated no later than 9 five years from the date of initial commencement of operation 10 of the nursing facility. 11 d. The department may utilize funds held in escrow if the 12 applicant’s nursing facility is subject to operation under 13 receivership pursuant to section 135C.30. 14 5. The department shall verify the accuracy and 15 completeness of the information provided under this section. 16 6. The information or documents provided to the department 17 under this section detailing the applicant’s financial 18 condition or the terms of the applicant’s contractual business 19 relationships shall be confidential and not considered a public 20 record under chapter 22. 21 7. For the purposes of this section: 22 a. “Applicant” means a person required to obtain a nursing 23 facility license under this section due to change of ownership 24 of a previously licensed nursing facility. 25 b. “Related party” means a related party or organization 26 described by rule of the department of health and human 27 services relating to nursing facility financial and statistical 28 reporting and determination of payment rates pursuant to 441 29 lAC 81.6(11)(1). 30 Sec. ___. NEW SECTION . 135C.35A Moratorium —— new 31 construction or increase in bed capacity —— nursing facilities. 32 1. Beginning July 1, 2023, and ending no later than June 33 30, 2026, the department shall impose for an initial period 34 of twelve months a temporary moratorium on submission of 35 -3- HF 685.1940 (2) 90 pf/rh 3/ 6

applications for new construction of a nursing facility or a 1 permanent change in bed capacity of a nursing facility that 2 increases the bed capacity of the nursing facility. The 3 department, in consultation with the department of health 4 and human services, may extend the moratorium in six-month 5 increments following the conclusion of the initial twelve-month 6 period, but for no longer than a total of thirty-six months. 7 2. The department, in consultation with the department 8 of health and human services, may waive the moratorium as 9 specified in this section if any of the following applies: 10 a. The departments jointly determine there is a specialized 11 need for the nursing facility beds requested. 12 b. The average occupancy of all licensed nursing facility 13 beds located within the county and contiguous counties of 14 the location of the proposed increase in nursing facility 15 bed capacity exceeded eighty-five percent during the three 16 most recent calendar quarters as published by the centers for 17 Medicare and Medicaid services of the United States department 18 of health and human services at the time of the filing of the 19 application. 20 3. The department shall publish any request for a waiver of 21 the moratorium as well as an explanation for the decision to 22 either grant or deny the waiver request. 23 4. For the purposes of this section, “occupancy” means the 24 average number of residents of the nursing facility during the 25 applicable time period divided by the licensed bed capacity of 26 the nursing facility. 27 Sec. ___. NEW SECTION . 135C.35B Availability of nursing 28 facility bed data. 29 No later than January 1, 2024, the department of health and 30 human services shall develop a publicly available dashboard 31 detailing the number of nursing facility beds available in the 32 state, the overall quality rating of the available nursing 33 facility beds as specified by the centers for Medicare and 34 Medicaid services of the United States department of health 35 -4- HF 685.1940 (2) 90 pf/rh 4/ 6

and human services star ratings, any increase in the number of 1 available nursing facility beds in each county during the state 2 fiscal year, any decrease in the number of available nursing 3 facility beds in each county during the state fiscal year, and 4 an explanation of the causes of such increase or decrease in 5 available nursing facility beds. 6 Sec. ___. NEW SECTION . 249A.28 Hospital directed payment —— 7 prohibition of pass-through on non-Medicaid payors. 8 A hospital participating in the hospital directed payment 9 program pursuant to 42 C.F.R. §438.6 shall not knowingly pass 10 on the directed payment increase for health care services 11 provided to non-Medicaid payors, including as a fee or rate 12 increase. If a hospital violates this section, the hospital 13 shall not receive the directed payment but shall instead only 14 be reimbursed the hospital base reimbursement rate for health 15 care services provided under the medical assistance program for 16 one year from the date the violation is discovered. 17 Sec. ___. Section 249L.3, Code 2023, is amended by adding 18 the following new subsection: 19 NEW SUBSECTION . 6A. A nursing facility shall not knowingly 20 pass on the quality assurance assessment to non-Medicaid 21 payors, including as a rate increase or service charge. If a 22 nursing facility violates this section, the department shall 23 not reimburse the nursing facility the quality assurance 24 assessment due the nursing facility under the medical 25 assistance program, but shall instead only reimburse the 26 nursing facility at the nursing facility base reimbursement 27 rate under the medical assistance program for one year from the 28 date the violation is discovered. 29 Sec. ___. NURSING FACILITY BED NEED FORMULA —— STUDY AND 30 RECOMMENDATIONS. The department of health and human services 31 shall convene a workgroup including representatives of nursing 32 facilities, managed care organizations, the department of 33 inspections, appeals, and licensing, and other appropriate 34 stakeholders to review the existing nursing facility bed need 35 -5- HF 685.1940 (2) 90 pf/rh 5/ 6

formula. The department of health and human services shall 1 submit a report of the recommendations of the workgroup for 2 improvement to the nursing facility bed need formula, including 3 recommendations related to the process for establishing a 4 projection of future nursing facility bed use taking into 5 consideration the state’s changing demographics and the need 6 to ensure an adequate number of nursing facility beds, to the 7 governor and the general assembly by December 2, 2024. > 8 2. Title page, line 1, after < relating to > by inserting 9 < health care services and financing, including nursing facility 10 licensing and financing and > 11 3. By renumbering, redesignating, and correcting internal 12 references as necessary. 13 ______________________________ MARK COSTELLO -6- HF 685.1940 (2) 90 pf/rh 6/ 6 #2. #3.