House File 919 H-1163 Amend House File 919 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < Section 1. Section 135B.1, Code 2025, is amended by adding 4 the following new subsection: 5 NEW SUBSECTION . 7. “Children’s specialty hospital” means a 6 hospital described by all of the following: 7 a. The hospital is owned and operated by a nonprofit 8 organization. 9 b. The hospital only serves individuals thirty years of age 10 and younger. 11 c. More than sixty percent of the individuals served by the 12 hospital receive medical assistance under chapter 249A. 13 d. The hospital specializes in pediatric rehabilitation and 14 treating children with a behavioral health condition or complex 15 medical needs. 16 e. The hospital has no more than two hundred inpatient beds. 17 f. The hospital provides outpatient services. 18 g. The hospital met the definition of a special population 19 nursing facility, as promulgated by rule by the department of 20 health and human services, prior to July 1, 2025. 21 Sec. 2. NEW SECTION . 135B.40 Children’s specialty 22 hospitals. 23 1. The department may adopt rules pursuant to chapter 17A 24 to establish minimum standards for the licensure of children’s 25 specialty hospitals. Rules adopted pursuant to this section 26 shall be formulated in consultation with the director of 27 health and human services or the director’s designee, and with 28 affected industry, professional, and consumer groups. 29 2. A children’s specialty hospital shall establish formal 30 criteria based on objective medical standards for patient 31 admission, discharge, and continuation of care. 32 Sec. 3. DEPARTMENT OF INSPECTIONS, APPEALS, AND LICENSING 33 —— DEPARTMENT OF HEALTH AND HUMAN SERVICES —— CHILDREN’S 34 SPECIALTY HOSPITALS. 35 -1- HF 919.1188 (3) 91 dg/ko 1/ 4 #1.

1. For purposes of this section, “licensed entity” means 1 an entity granted a provisional children’s specialty hospital 2 license under subsection 2, paragraph “a”. 3 2. The department of inspections, appeals, and licensing 4 shall do all of the following: 5 a. Within thirty calendar days of the effective date of 6 this Act, grant a provisional children’s specialty hospital 7 license to an entity that requests such provisional licensure 8 provided that the entity meets the definition of children’s 9 specialty hospital under section 135B.1. A provisional license 10 granted under this paragraph shall be valid for no more than 11 twenty-four consecutive months from the date the provisional 12 license is granted. A licensed entity may seek federal 13 certification and participation in federal reimbursement 14 programs that require hospital licensure. 15 b. Grant reasonable waivers from state hospital rules to 16 permit a licensed entity to maintain the licensed entity’s 17 operations as provided prior to the effective date of this 18 Act, until the date the licensed entity obtains federal 19 certification or the ability to participate in federal 20 reimbursement programs that require hospital licensure. After 21 a licensed entity obtains federal certification or the ability 22 to participate in federal reimbursement programs that require 23 hospital licensure, the department of inspections, appeals, and 24 licensing and the department of health and human services shall 25 grant the necessary waivers to the licensed entity to ensure 26 the licensed entity’s compliance with the requirements of the 27 federal certification or the federal reimbursement programs. 28 Waivers granted under this paragraph shall specifically include 29 a waiver from state rules that require a licensed entity to 30 maintain, or to have available, laboratory and pathology 31 services and facilities, other than laboratory and pathology 32 services and facilities that the licensed entity maintained 33 prior to the effective date of this Act, and a waiver from 34 state rules that require the provision of emergency services, 35 -2- HF 919.1188 (3) 91 dg/ko 2/ 4

other than emergency services that the licensed entity provided 1 prior to the effective date of this Act. Each waiver granted 2 to a licensed entity under this paragraph shall be valid for 3 no more than twenty-four consecutive months from the date the 4 licensed entity was granted a provisional children’s specialty 5 hospital license under paragraph “a”, or until the date the 6 licensed entity obtains a permanent children’s specialty 7 hospital license, whichever date is earlier. 8 c. Collaborate with the department of health and human 9 services and a licensed entity to assist the licensed entity 10 in seeking federal certification or participation in federal 11 reimbursement programs requiring hospital licensure. 12 3. A licensed entity may operate under the minimum physical 13 standards for nursing facilities in 481 IAC 61 under which 14 the licensed entity operated prior to the effective date of 15 this Act, and shall be exempt from all other construction 16 standards applicable only to hospitals and off-site premises. 17 The exemption under this paragraph shall include the exemption 18 from the standards set forth in the guidelines for design 19 and construction of hospitals as published by the facility 20 guidelines institute. 21 4. The department of health and human services shall set 22 reimbursement rates for inpatient care and outpatient care 23 provided by the licensed entity. Reimbursement rates under 24 this subsection shall be equal to the licensed entity’s average 25 allowable per diem costs, and adjusted for inflation based on 26 all of the following: 27 a. For inpatient care, 441 IAC 79.1(5)(k). 28 b. For outpatient care, 441 IAC 79.1(1)(g), (h), and (i). 29 5. A licensed entity shall be exempt from certificate of 30 need requirements under chapter 10A, subchapter VII, part 2, 31 to the extent that the licensed entity is implementing a new 32 institutional health service, or a changed institutional health 33 service, for the purpose of converting the licensed entity to a 34 children’s specialty hospital, or to revert the licensed entity 35 -3- HF 919.1188 (3) 91 dg/ko 3/ 4

to a nursing facility. The exemption under this subsection 1 shall continue until the earlier of the following occurs: 2 a. The date the licensed entity obtains a permanent 3 children’s specialty hospital license. 4 b. Twenty-four consecutive months from the date the 5 licensed entity was granted a provisional children’s specialty 6 hospital license. 7 Sec. 4. EMERGENCY RULES. The department of inspections, 8 appeals, and licensing may adopt emergency rules under section 9 17A.4, subsection 3, and section 17A.5, subsection 2, paragraph 10 “b”, to implement the provisions of this Act and the rules 11 shall be effective immediately upon filing unless a later date 12 is specified in the rules. Any rules adopted in accordance 13 with this section shall also be published as a notice of 14 intended action as provided in section 17A.4. 15 Sec. 5. EFFECTIVE DATE. This Act, being deemed of immediate 16 importance, takes effect upon enactment. > 17 2. Title page, line 1, after < to > by inserting < children’s > 18 3. Title page, line 2, by striking < organizations. > 19 and inserting < organizations, and including effective date 20 provisions. > 21 ______________________________ A. MEYER of Webster -4- HF 919.1188 (3) 91 dg/ko 4/ 4 #2. #3.