S.F. 2255 Section 1. Section 135.61, subsection 1, paragraphs c and d, 1 Code 2022, are amended to read as follows: 2 c. Each institutional health nursing facility or 3 health maintenance organization which is located in the 4 geographic area which would appropriately be served by the 5 new institutional health service proposed in the application. 6 The appropriate geographic service area of each institutional 7 health nursing facility or health maintenance organization 8 shall be determined on a uniform basis in accordance with 9 criteria established in rules adopted by the department. 10 d. Each institutional health nursing facility or health 11 maintenance organization which, prior to receipt of the 12 application by the department, has formally indicated to the 13 department pursuant to this subchapter an intent to furnish in 14 the future institutional health services similar to the new 15 institutional health service proposed in the application. 16 Sec. 2. Section 135.61, subsections 3, 15, 18, and 19, Code 17 2022, are amended to read as follows: 18 3. “Consumer” means any individual whose occupation is other 19 than health services, who has no fiduciary obligation to an 20 institutional health a nursing facility , health maintenance 21 organization or other facility or other entity primarily 22 engaged in delivery of services provided by persons in health 23 service occupations, and who has no material financial interest 24 in the providing of any health services. 25 15. “Institutional health service” means any health service 26 furnished in or through institutional health nursing facilities 27 or health maintenance organizations , including mobile health 28 services. 29 18. “New institutional health service” or “changed 30 institutional health service” means any of the following: 31 a. The construction, development or other establishment 32 of a new institutional health nursing facility regardless of 33 ownership. 34 b. Relocation of an institutional health a nursing facility. 35 -1- LSB 5415SV (1) 89 pf/rh 1/ 14

S.F. 2255 c. Any capital expenditure, lease, or donation by or 1 on behalf of an institutional health a nursing facility in 2 excess of one million five hundred thousand dollars within a 3 twelve-month period. 4 d. A permanent change in the bed capacity, as determined by 5 the department, of an institutional health a nursing facility. 6 For purposes of this paragraph, a change is permanent if it is 7 intended to be effective for one year or more. 8 e. Any expenditure in excess of five hundred thousand 9 dollars by or on behalf of an institutional health a nursing 10 facility for health services which are or will be offered in 11 or through an institutional health a nursing facility at a 12 specific time but which were not offered on a regular basis in 13 or through that institutional health nursing facility within 14 the twelve-month period prior to that time. 15 f. The deletion of one or more health services, previously 16 offered on a regular basis by an institutional health a nursing 17 facility or health maintenance organization or the relocation 18 of one or more health services from one physical facility to 19 another. 20 g. Any acquisition by or on behalf of a health care provider 21 or a group of health care providers of any piece of replacement 22 equipment with a value in excess of one million five hundred 23 thousand dollars, whether acquired by purchase, lease, or 24 donation. 25 h. Any acquisition by or on behalf of a health care provider 26 or group of health care providers of any piece of equipment 27 with a value in excess of one million five hundred thousand 28 dollars, whether acquired by purchase, lease, or donation, 29 which results in the offering or development of a health 30 service not previously provided. A mobile service provided 31 on a contract basis is not considered to have been previously 32 provided by a health care provider or group of health care 33 providers. 34 i. g. Any acquisition by or on behalf of an institutional 35 -2- LSB 5415SV (1) 89 pf/rh 2/ 14

S.F. 2255 health a nursing facility or a health maintenance organization 1 of any piece of replacement equipment with a value in excess of 2 one million five hundred thousand dollars, whether acquired by 3 purchase, lease, or donation. 4 j. h. Any acquisition by or on behalf of an institutional 5 health a nursing facility or health maintenance organization 6 of any piece of equipment with a value in excess of one 7 million five hundred thousand dollars, whether acquired by 8 purchase, lease, or donation, which results in the offering or 9 development of a health service not previously provided. A 10 mobile service provided on a contract basis is not considered 11 to have been previously provided by an institutional health a 12 nursing facility. 13 k. Any air transportation service for transportation of 14 patients or medical personnel offered through an institutional 15 health facility at a specific time but which was not offered 16 on a regular basis in or through that institutional health 17 facility within the twelve-month period prior to the specific 18 time. 19 l. i. Any mobile health service with a value in excess of 20 one million five hundred thousand dollars. 21 m. Any of the following: 22 (1) Cardiac catheterization service. 23 (2) Open heart surgical service. 24 (3) Organ transplantation service. 25 (4) Radiation therapy service applying ionizing radiation 26 for the treatment of malignant disease using megavoltage 27 external beam equipment. 28 19. “Offer” , when used in connection with health services, 29 means that an institutional health a nursing facility , health 30 maintenance organization, health care provider, or group of 31 health care providers holds itself out as capable of providing, 32 or as having the means to provide, specified health services. 33 Sec. 3. Section 135.61, Code 2022, is amended by adding the 34 following new subsection: 35 -3- LSB 5415SV (1) 89 pf/rh 3/ 14

S.F. 2255 NEW SUBSECTION . 18A. “Nursing facility” means the same as 1 defined in section 135C.1. 2 Sec. 4. Section 135.61, subsections 2, 14, 20, 21, and 22, 3 Code 2022, are amended by striking the subsections. 4 Sec. 5. Section 135.62, subsection 2, paragraph a, 5 subparagraph (2), Code 2022, is amended to read as follows: 6 (2) Serve as a member of any board or other policymaking or 7 advisory body of an institutional health a nursing facility, 8 a health maintenance organization, or any health or hospital 9 insurer. 10 Sec. 6. Section 135.63, Code 2022, is amended to read as 11 follows: 12 135.63 Certificate of need required —— exclusions. 13 1. A new institutional health service or changed 14 institutional health service shall not be offered or developed 15 in this state without prior application to the department 16 for and receipt of a certificate of need, pursuant to 17 this subchapter . The application shall be made upon forms 18 furnished or prescribed by the department and shall contain 19 such information as the department may require under this 20 subchapter . The application shall be accompanied by a fee 21 equivalent to three-tenths of one percent of the anticipated 22 cost of the project with a minimum fee of six hundred dollars 23 and a maximum fee of twenty-one thousand dollars. The fee 24 shall be remitted by the department to the treasurer of 25 state, who shall place it in the general fund of the state. 26 If an application is voluntarily withdrawn within thirty 27 calendar days after submission, seventy-five percent of the 28 application fee shall be refunded; if the application is 29 voluntarily withdrawn more than thirty but within sixty days 30 after submission, fifty percent of the application fee shall 31 be refunded; if the application is withdrawn voluntarily more 32 than sixty days after submission, twenty-five percent of 33 the application fee shall be refunded. Notwithstanding the 34 required payment of an application fee under this subsection , 35 -4- LSB 5415SV (1) 89 pf/rh 4/ 14

S.F. 2255 an applicant for a new institutional health service or a 1 changed institutional health service offered or developed by 2 an intermediate care facility for persons with an intellectual 3 disability or an intermediate care facility for persons with 4 mental illness as defined pursuant to section 135C.1 is exempt 5 from payment of the application fee. 6 2. This subchapter shall not be construed to augment, limit, 7 contravene, or repeal in any manner any other statute of this 8 state which may authorize or relate to licensure, regulation, 9 supervision, or control of, nor to be applicable to: 10 a. Private offices and private clinics of an individual 11 physician, dentist, or other practitioner or group of 12 health care providers, except as provided by section 135.61, 13 subsection 18 , paragraphs “g” , “h” , and “m” , and section 135.61, 14 subsections 20 and 21 . 15 b. Dispensaries and first aid stations, located within 16 schools, businesses, or industrial establishments, which are 17 maintained solely for the use of students or employees of those 18 establishments and which do not contain inpatient or resident 19 beds that are customarily occupied by the same individual for 20 more than twenty-four consecutive hours. 21 c. Establishments such as motels, hotels, and boarding 22 houses which provide medical, nursing personnel, and other 23 health related services as an incident to their primary 24 business or function. 25 d. b. The remedial care or treatment of residents , 26 consumers, or patients in any home or institution conducted 27 only for those who rely solely upon treatment by prayer or 28 spiritual means in accordance with the creed or tenets of any 29 recognized church or religious denomination. 30 e. c. A health maintenance organization or combination of 31 health maintenance organizations or an institutional health a 32 nursing facility controlled directly or indirectly by a health 33 maintenance organization or combination of health maintenance 34 organizations, except when the health maintenance organization 35 -5- LSB 5415SV (1) 89 pf/rh 5/ 14

S.F. 2255 or combination of health maintenance organizations does any of 1 the following: 2 (1) Constructs, constructs, develops, renovates, relocates, 3 or otherwise establishes an institutional health a nursing 4 facility. 5 (2) Acquires major medical equipment as provided by section 6 135.61, subsection 18 , paragraphs “i” and “j” . 7 f. A residential care facility, as defined in section 8 135C.1 , including a residential care facility for persons with 9 an intellectual disability, notwithstanding any provision in 10 this subchapter to the contrary. 11 g. d. (1) A reduction in bed capacity of an institutional 12 health a nursing facility, notwithstanding any provision in 13 this subchapter to the contrary, if all of the following 14 conditions exist: 15 (a) The institutional health nursing facility reports to 16 the department the number and type of beds reduced on a form 17 prescribed by the department at least thirty days before the 18 reduction. In the case of a health care facility, the The 19 new bed total must be consistent with the number of licensed 20 beds at the facility. In the case of a hospital, the number 21 of beds must be consistent with bed totals reported to the 22 department of inspections and appeals for purposes of licensure 23 and certification. 24 (b) The institutional health nursing facility reports the 25 new bed total on its next annual report to the department. 26 (2) If these conditions are not met, the institutional 27 health nursing facility is subject to review as a “new 28 institutional health service” or “changed institutional 29 health service” under section 135.61, subsection 18 , paragraph 30 “d” , and subject to sanctions under section 135.73 . If the 31 institutional health nursing facility reestablishes the deleted 32 beds at a later time, review as a “new institutional health 33 service” or “changed institutional health service” is required 34 pursuant to section 135.61, subsection 18 , paragraph “d” . 35 -6- LSB 5415SV (1) 89 pf/rh 6/ 14

S.F. 2255 h. e. (1) The deletion of one or more health services, 1 previously offered on a regular basis by an institutional 2 health a nursing facility or health maintenance organization , 3 notwithstanding any provision of this subchapter to the 4 contrary, if all of the following conditions exist: 5 (a) The institutional health nursing facility or health 6 maintenance organization reports to the department the deletion 7 of the service or services at least thirty days before the 8 deletion on a form prescribed by the department. 9 (b) The institutional health nursing facility or health 10 maintenance organization reports the deletion of the service or 11 services on its next annual report to the department. 12 (2) If these conditions are not met, the institutional 13 health nursing facility or health maintenance organization is 14 subject to review as a “new institutional health service” or 15 “changed institutional health service” under section 135.61, 16 subsection 18 , paragraph “f” , and subject to sanctions under 17 section 135.73 . 18 (3) If the institutional health nursing facility or health 19 maintenance organization reestablishes the deleted service 20 or services at a later time, review as a “new institutional 21 health service” or “changed institutional health service” may 22 be required pursuant to section 135.61, subsection 18 . 23 i. A residential program exempt from licensing as a health 24 care facility under chapter 135C in accordance with section 25 135C.6, subsection 8 . 26 j. f. The construction, modification, or replacement 27 of nonpatient care services, including parking facilities, 28 heating, ventilation and air conditioning systems, computers, 29 telephone systems, medical office buildings, and other projects 30 of a similar nature, notwithstanding any provision in this 31 subchapter to the contrary. 32 k. (1) The redistribution of beds by a hospital within the 33 acute care category of bed usage, notwithstanding any provision 34 in this subchapter to the contrary, if all of the following 35 -7- LSB 5415SV (1) 89 pf/rh 7/ 14

S.F. 2255 conditions exist: 1 (a) The hospital reports to the department the number and 2 type of beds to be redistributed on a form prescribed by the 3 department at least thirty days before the redistribution. 4 (b) The hospital reports the new distribution of beds on its 5 next annual report to the department. 6 (2) If these conditions are not met, the redistribution 7 of beds by the hospital is subject to review as a new 8 institutional health service or changed institutional health 9 service pursuant to section 135.61, subsection 18 , paragraph 10 “d” , and is subject to sanctions under section 135.73 . 11 l. g. The replacement or modernization of any institutional 12 health nursing facility if the replacement or modernization 13 does not add new health services or additional bed capacity 14 for existing health services, notwithstanding any provision in 15 this subchapter to the contrary . With respect to a nursing 16 facility, “replacement” means establishing a , and the new 17 nursing facility is established within the same county as the 18 prior nursing facility to be closed. With reference to a 19 hospital, “replacement” means establishing a new hospital that 20 demonstrates compliance with all of the following criteria 21 through evidence submitted to the department: 22 (1) Is designated as a critical access hospital pursuant to 23 42 U.S.C. §1395i-4. 24 (2) Serves at least seventy-five percent of the same service 25 area that was served by the prior hospital to be closed and 26 replaced by the new hospital. 27 (3) Provides at least seventy-five percent of the same 28 services that were provided by the prior hospital to be closed 29 and replaced by the new hospital. 30 (4) Is staffed by at least seventy-five percent of the 31 same staff, including medical staff, contracted staff, and 32 employees, as constituted the staff of the prior hospital to be 33 closed and replaced by the new hospital. 34 m. Hemodialysis services provided by a hospital or 35 -8- LSB 5415SV (1) 89 pf/rh 8/ 14

S.F. 2255 freestanding facility, notwithstanding any provision in this 1 subchapter to the contrary. 2 n. Hospice services provided by a hospital, notwithstanding 3 any provision in this subchapter to the contrary. 4 o. h. The change in ownership, licensure, or organizational 5 structure , or designation of the type of institutional health 6 a nursing facility if the health services offered by the 7 successor institutional health nursing facility are unchanged. 8 This exclusion is applicable only if the institutional 9 health nursing facility consents to the change in ownership, 10 licensure, or organizational structure , or designation of 11 the type of institutional health the nursing facility and 12 ceases offering the health services simultaneously with the 13 initiation of the offering of health services by the successor 14 institutional health nursing facility. 15 p. The conversion of an existing number of beds by an 16 intermediate care facility for persons with an intellectual 17 disability to a smaller facility environment, including but not 18 limited to a community-based environment which does not result 19 in an increased number of beds, notwithstanding any provision 20 in this subchapter to the contrary, including subsection 4 , if 21 all of the following conditions exist: 22 (1) The intermediate care facility for persons with an 23 intellectual disability reports the number and type of beds to 24 be converted on a form prescribed by the department at least 25 thirty days before the conversion. 26 (2) The intermediate care facility for persons with an 27 intellectual disability reports the conversion of beds on its 28 next annual report to the department. 29 3. This subchapter shall not be construed to be applicable 30 to a health care facility operated by and for the exclusive use 31 of members of a religious order, which does not admit more than 32 two individuals to the facility from the general public, and 33 which was in operation prior to July 1, 1986. However, this 34 subchapter is applicable to such a facility if the facility 35 -9- LSB 5415SV (1) 89 pf/rh 9/ 14

S.F. 2255 is involved in the offering or developing of a new or changed 1 institutional health service on or after July 1, 1986 , through 2 June 30, 2022 . 3 4. A copy of the application shall be sent to the department 4 of human services at the time the application is submitted to 5 the Iowa department of public health. The department shall not 6 process applications for and the council shall not consider a 7 new or changed institutional health service for an intermediate 8 care facility for persons with an intellectual disability 9 unless both of the following conditions are met: 10 a. The new or changed beds shall not result in an 11 increase in the total number of medical assistance certified 12 intermediate care facility beds for persons with an 13 intellectual disability in the state, exclusive of those beds 14 at the state resource centers or other state institutions, 15 beyond one thousand six hundred thirty-six beds. 16 b. A letter of support for the application is provided by 17 the county board of supervisors, or the board’s designee, in 18 the county in which the beds would be located. 19 Sec. 7. Section 135.64, subsection 1, paragraphs o and q, 20 Code 2022, are amended to read as follows: 21 o. The impact of relocation of an institutional health a 22 nursing facility or health maintenance organization on other 23 institutional health nursing facilities or health maintenance 24 organizations and on the needs of the population to be served, 25 or which was previously served, or both. 26 q. In the case of a proposal for the addition of beds 27 to a health care nursing facility, the consistency of the 28 proposed addition with the plans of other agencies of this 29 state responsible for provision and financing of long-term care 30 services, including home health services. 31 Sec. 8. Section 135.64, subsection 1, paragraphs m and n, 32 Code 2022, are amended by striking the paragraphs. 33 Sec. 9. Section 135.64, subsection 2, Code 2022, is amended 34 to read as follows: 35 -10- LSB 5415SV (1) 89 pf/rh 10/ 14

S.F. 2255 2. In addition to the findings required with respect to 1 any of the criteria listed in subsection 1 of this section , 2 the council shall grant a certificate of need for a new 3 institutional health service or changed institutional health 4 service only if it finds in writing, on the basis of data 5 submitted to it by the department, that all of the following 6 conditions are met : 7 a. Less costly, more efficient, or more appropriate 8 alternatives to the proposed institutional health service are 9 not available and the development of such alternatives is not 10 practicable ; . 11 b. Any existing facilities providing institutional health 12 services similar to those proposed are being used in an 13 appropriate and efficient manner ; . 14 c. In the case of new construction, alternatives including 15 but not limited to modernization or sharing arrangements have 16 been considered and have been implemented to the maximum extent 17 practicable ; . 18 d. Patients or consumers will experience serious problems 19 in obtaining care of the type which will be furnished by 20 the proposed new institutional health service or changed 21 institutional health service, in the absence of that proposed 22 new service. 23 Sec. 10. Section 135.64, subsection 3, Code 2022, is amended 24 by striking the subsection. 25 Sec. 11. Section 135.67, subsection 1, paragraphs a, b, and 26 c, Code 2022, are amended to read as follows: 27 a. A project which is limited to repair or replacement 28 of a nursing facility or equipment damaged or destroyed by a 29 disaster, and which will not expand the nursing facility nor 30 increase the services provided beyond the level existing prior 31 to the disaster. 32 b. A project necessary to enable the nursing facility 33 or service to achieve or maintain compliance with federal, 34 state, or other appropriate licensing, certification, or safety 35 -11- LSB 5415SV (1) 89 pf/rh 11/ 14

S.F. 2255 requirements. 1 c. A project which will not change the existing bed capacity 2 of the applicant’s nursing facility or service, as determined 3 by the department, by more than ten percent or ten beds, 4 whichever is less, over a two-year period. 5 Sec. 12. Section 135.73, subsection 1, Code 2022, is amended 6 to read as follows: 7 1. Any party constructing a new institutional health 8 nursing facility or an addition to or renovation of an existing 9 institutional health nursing facility without first obtaining 10 a certificate of need or, in the case of a mobile health 11 service, ascertaining that the mobile health service has 12 received certificate of need approval, as required by this 13 subchapter , shall be denied licensure or change of licensure by 14 the appropriate responsible licensing agency of this state. 15 Sec. 13. Section 135.131, subsection 1, paragraph a, Code 16 2022, is amended to read as follows: 17 a. “Birth center” means birth center as defined in section 18 135.61 a facility or institution, which is not an ambulatory 19 surgical center or a hospital or in a hospital, in which 20 births are planned to occur following a normal, uncomplicated, 21 low-risk pregnancy . 22 Sec. 14. Section 135H.6, subsection 1, paragraph d, Code 23 2022, is amended by striking the paragraph. 24 Sec. 15. Section 135H.6, subsections 3, 4, and 5, Code 2022, 25 are amended to read as follows: 26 3. In addition to the beds authorized under subsection 2 , 27 the department of human services may establish not more than 28 thirty beds licensed under this chapter at the state mental 29 health institute at Independence. The beds shall be exempt 30 from the certificate of need requirement under subsection 1 , 31 paragraph “d” . 32 4. The department of human services may give approval to 33 conversion of beds approved under subsection 2 , to beds which 34 are specialized to provide substance abuse treatment. However, 35 -12- LSB 5415SV (1) 89 pf/rh 12/ 14

S.F. 2255 the total number of beds approved under subsection 2 and this 1 subsection shall not exceed four hundred thirty. Conversion 2 of beds under this subsection shall not require a revision of 3 the certificate of need issued for the psychiatric institution 4 making the conversion. Beds for children who do not reside 5 in this state and whose service costs are not paid by public 6 funds in this state are not subject to the limitations on the 7 number of beds and certificate of need requirements otherwise 8 applicable under this section . 9 5. A psychiatric institution licensed prior to July 1, 1999, 10 may exceed the number of beds authorized under subsection 2 11 if the excess beds are used to provide services funded from a 12 source other than the medical assistance program under chapter 13 249A . Notwithstanding subsection 1 , paragraphs “d” and “e” , 14 and subsection 2 , the provision of services using those excess 15 beds does not require a certificate of need or a review by the 16 department of human services. 17 Sec. 16. Section 135P.1, subsection 3, Code 2022, is amended 18 to read as follows: 19 3. “Health facility” means an institutional a hospital, a 20 health care facility as defined in section 135.61 , an organized 21 outpatient health facility, an outpatient surgical facility, 22 a community mental health facility, a birth center as defined 23 in section 135.131, a hospice licensed under chapter 135J , a 24 home health agency as defined in section 144D.1 , an assisted 25 living program certified under chapter 231C , a clinic, a 26 community health center, or the university of Iowa hospitals 27 and clinics, and includes any corporation, professional 28 corporation, partnership, limited liability company, limited 29 liability partnership, or other entity comprised of such health 30 facilities. 31 Sec. 17. Section 231C.3, subsection 2, Code 2022, is amended 32 to read as follows: 33 2. Each assisted living program operating in this state 34 shall be certified by the department. If an assisted living 35 -13- LSB 5415SV (1) 89 pf/rh 13/ 14

S.F. 2255 program is voluntarily accredited by a recognized accrediting 1 entity, the department shall certify the assisted living 2 program on the basis of the voluntary accreditation. An 3 assisted living program that is certified by the department on 4 the basis of voluntary accreditation shall not be subject to 5 payment of the certification fee prescribed in section 231C.18 , 6 but shall be subject to an administrative fee as prescribed by 7 rule. An assisted living program certified under this section 8 is exempt from the requirements of section 135.63 relating to 9 certificate of need requirements. 10 Sec. 18. REPEAL. Section 135B.5A, Code 2022, is repealed. 11 EXPLANATION 12 The inclusion of this explanation does not constitute agreement with 13 the explanation’s substance by the members of the general assembly. 14 This bill relates to the certificate of need process. 15 The bill eliminates the application of certificate of need 16 requirements to any other institutional health facility or 17 other entity that furnishes new or changed institutional health 18 services with the exception of nursing facilities. The bill 19 amends the definition of “new institutional health service” 20 or “changed institutional health service” to retain services 21 applicable to a nursing facility and eliminates definitions and 22 other provisions no longer necessary to the certificate of need 23 provisions. The bill also makes conforming changes throughout 24 the Code. 25 -14- LSB 5415SV (1) 89 pf/rh 14/ 14