Senate File 506 - Introduced SENATE FILE 506 BY COMMITTEE ON HEALTH AND HUMAN SERVICES (SUCCESSOR TO SSB 1117) A BILL FOR An Act relating to health facilities and health services 1 including licensing and the certificate of need process, and 2 including effective date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1825SV (6) 90 pf/rh

S.F. 506 DIVISION I 1 CERTIFICATE OF NEED —— HEALTH FACILITIES COUNCIL 2 Section 1. Section 68B.35, subsection 2, paragraph e, Code 3 2023, is amended to read as follows: 4 e. Members of the state banking council, the Iowa ethics 5 and campaign disclosure board, the credit union review board, 6 the economic development authority, the employment appeal 7 board, the environmental protection commission, the health 8 facilities council, the Iowa finance authority, the Iowa public 9 employees’ retirement system investment board, the board of 10 the Iowa lottery authority, the natural resource commission, 11 the board of parole, the petroleum underground storage tank 12 fund board, the public employment relations board, the state 13 racing and gaming commission, the state board of regents, the 14 transportation commission, the office of consumer advocate, the 15 utilities board, the Iowa telecommunications and technology 16 commission, and any full-time members of other boards and 17 commissions as defined under section 7E.4 who receive an annual 18 salary for their service on the board or commission. The Iowa 19 ethics and campaign disclosure board shall conduct an annual 20 review to determine if members of any other board, commission, 21 or authority should file a statement and shall require the 22 filing of a statement pursuant to rules adopted pursuant to 23 chapter 17A . 24 Sec. 2. Section 97B.1A, subsection 8, paragraph a, 25 subparagraph (8), Code 2023, is amended to read as follows: 26 (8) Members of the state transportation commission , and the 27 board of parole , and the state health facilities council . 28 Sec. 3. Section 135.61, subsections 1, 14, 15, and 18, Code 29 2023, are amended to read as follows: 30 1. “Affected persons” means, with respect to an application 31 for a certificate of need: 32 a. The person submitting the application. 33 b. Consumers who would be served by the new institutional 34 health service proposed in the application. 35 -1- LSB 1825SV (6) 90 pf/rh 1/ 20

S.F. 506 c. Each institutional health facility or health maintenance 1 organization which is located in the geographic area which 2 would appropriately be served by the new institutional 3 health service proposed in the application. The appropriate 4 geographic service area of each institutional health facility 5 or health maintenance organization shall be determined on a 6 uniform basis in accordance with criteria established in rules 7 adopted by the department. 8 d. Each institutional health facility or health maintenance 9 organization which, prior to receipt of the application by 10 the department, has formally indicated to the department 11 pursuant to this subchapter an intent to furnish in the future 12 institutional health services similar to the new institutional 13 health service proposed in the application. 14 e. Any other person designated as an affected person by 15 rules of the department. 16 f. Any payer or third-party payer for health services. 17 14. “Institutional health facility” means any of the 18 following, without regard to whether the facilities referred 19 to are publicly or privately owned or are organized for profit 20 or not or whether the facilities are part of or sponsored by a 21 health maintenance organization: 22 a. A hospital. 23 b. A health care facility. 24 c. An organized outpatient health facility. 25 d. An outpatient surgical facility. 26 e. A community mental health facility. 27 f. A birth center. 28 15. “Institutional health service” means any health service 29 furnished in or through institutional health facilities or 30 health maintenance organizations , including mobile health 31 services . 32 18. “New institutional health service” or “changed 33 institutional health service” means any of the following: 34 a. The construction, development , or other establishment of 35 -2- LSB 1825SV (6) 90 pf/rh 2/ 20

S.F. 506 a new institutional health facility regardless of ownership. 1 b. Relocation of an institutional health facility. 2 c. Any capital expenditure, lease, or donation by or on 3 behalf of an institutional health facility in excess of one 4 million five hundred thousand dollars the following amounts, as 5 applicable, within a twelve-month period . : 6 (1) Beginning January 1, 2023, three million five hundred 7 thousand dollars. 8 (2) Beginning January 1, 2028, four million dollars. 9 (3) Beginning January 1, 2033, four million five hundred 10 thousand dollars. 11 (4) Beginning January 1, 2038, five million dollars. 12 d. A permanent change in the bed capacity, as determined 13 by the department, of an institutional health facility. For 14 purposes of this paragraph, a change is permanent if it is 15 intended to be effective for one year or more. 16 e. Any expenditure in excess of five hundred thousand 17 dollars by or on behalf of an institutional health facility for 18 health services which are or will be offered in or through an 19 institutional health facility at a specific time but which were 20 not offered on a regular basis in or through that institutional 21 health facility within the twelve-month period prior to that 22 time. 23 f. The deletion of one or more health services, previously 24 offered on a regular basis by an institutional health facility 25 or health maintenance organization or the relocation of one or 26 more health services from one physical facility to another. 27 g. Any acquisition by or on behalf of a health care provider 28 or a group of health care providers of any piece of replacement 29 equipment with a value in excess of one million five hundred 30 thousand dollars, whether acquired by purchase, lease, or 31 donation. 32 h. Any acquisition by or on behalf of a health care provider 33 or group of health care providers of any piece of equipment 34 with a value in excess of one million five hundred thousand 35 -3- LSB 1825SV (6) 90 pf/rh 3/ 20

S.F. 506 dollars, whether acquired by purchase, lease, or donation, 1 which results in the offering or development of a health 2 service not previously provided. A mobile service provided 3 on a contract basis is not considered to have been previously 4 provided by a health care provider or group of health care 5 providers. 6 i. Any acquisition by or on behalf of an institutional 7 health facility or a health maintenance organization of any 8 piece of replacement equipment with a value in excess of one 9 million five hundred thousand dollars, whether acquired by 10 purchase, lease, or donation. 11 j. Any acquisition by or on behalf of an institutional 12 health facility or health maintenance organization of any 13 piece of equipment with a value in excess of one million five 14 hundred thousand dollars, whether acquired by purchase, lease, 15 or donation, which results in the offering or development of 16 a health service not previously provided. A mobile service 17 provided on a contract basis is not considered to have been 18 previously provided by an institutional health facility. 19 k. Any air transportation service for transportation of 20 patients or medical personnel offered through an institutional 21 health facility at a specific time but which was not offered 22 on a regular basis in or through that institutional health 23 facility within the twelve-month period prior to the specific 24 time. 25 l. Any mobile health service with a value in excess of one 26 million five hundred thousand dollars. 27 m. Any of the following: 28 (1) Cardiac catheterization service. 29 (2) Open heart surgical service. 30 (3) Organ transplantation service. 31 (4) Radiation therapy service applying ionizing radiation 32 for the treatment of malignant disease using megavoltage 33 external beam equipment. 34 Sec. 4. Section 135.61, subsections 2, 4, and 16, Code 2023, 35 -4- LSB 1825SV (6) 90 pf/rh 4/ 20

S.F. 506 are amended by striking the subsections. 1 Sec. 5. Section 135.62, Code 2023, is amended to read as 2 follows: 3 135.62 Department to administer subchapter —— health 4 facilities council established —— appointments —— powers and 5 duties. 6 1. This subchapter shall be administered by the department. 7 The director shall employ or cause to be employed the necessary 8 persons to discharge the duties imposed on the department by 9 this subchapter . 10 2. There is established a state health facilities council 11 consisting of five persons appointed by the governor. The 12 council shall be within the department for administrative and 13 budgetary purposes. 14 a. Qualifications. The members of the council shall be 15 chosen so that the council as a whole is broadly representative 16 of various geographical areas of the state and no more than 17 three of its members are affiliated with the same political 18 party. Each council member shall be a person who has 19 demonstrated by prior activities an informed concern for the 20 planning and delivery of health services. A member of the 21 council and any spouse of a member shall not, during the 22 time that member is serving on the council, do either of the 23 following: 24 (1) Be a health care provider nor be otherwise directly or 25 indirectly engaged in the delivery of health care services nor 26 have a material financial interest in the providing or delivery 27 of health services. 28 (2) Serve as a member of any board or other policymaking 29 or advisory body of an institutional health facility, a health 30 maintenance organization, or any health or hospital insurer. 31 b. Appointments. Terms of council members shall be six 32 years, beginning and ending as provided in section 69.19 . A 33 member shall be appointed in each odd-numbered year to succeed 34 each member whose term expires in that year. Vacancies 35 -5- LSB 1825SV (6) 90 pf/rh 5/ 20

S.F. 506 shall be filled by the governor for the balance of the 1 unexpired term. Each appointment to the council is subject to 2 confirmation by the senate. A council member is ineligible 3 for appointment to a second consecutive term, unless first 4 appointed to an unexpired term of three years or less. 5 c. Chairperson. The governor shall designate one of 6 the council members as chairperson. That designation may 7 be changed not later than July 1 of any odd-numbered year, 8 effective on the date of the organizational meeting held in 9 that year under paragraph “d” . 10 d. Meetings. The council shall hold an organizational 11 meeting in July of each odd-numbered year, or as soon 12 thereafter as the new appointee or appointees are confirmed 13 and have qualified. Other meetings shall be held as necessary 14 to enable the council to expeditiously discharge its duties. 15 Meeting dates shall be set upon adjournment or by call of the 16 chairperson upon five days’ notice to the other members. 17 e. 2. Duties. The council department shall do all of the 18 following: 19 (1) a. Make the final decision, as required by section 20 135.69 , with respect to each application for a certificate of 21 need accepted by the department. 22 (2) b. Determine and adopt such policies as are authorized 23 by law and are deemed necessary to the efficient discharge of 24 its the department’s duties under this subchapter . 25 (3) c. Have authority to direct staff personnel of the 26 department assigned to conduct formal or summary reviews of 27 applications for certificates of need. 28 (4) d. Advise and counsel with the director concerning the 29 provisions of this subchapter and the policies and procedures 30 adopted by the department pursuant to this subchapter . 31 (5) Review and approve, prior to promulgation, all rules 32 adopted by the department under this subchapter . 33 Sec. 6. Section 135.63, subsection 1, Code 2023, is amended 34 to read as follows: 35 -6- LSB 1825SV (6) 90 pf/rh 6/ 20

S.F. 506 1. A new institutional health service or changed 1 institutional health service shall not be offered or developed 2 in this state without prior application to the department 3 for and receipt of a certificate of need, pursuant to 4 this subchapter . The application shall be made upon forms 5 furnished or prescribed by the department and shall contain 6 such information as the department may require under this 7 subchapter . The application shall be accompanied by an 8 economic impact statement that includes information specified 9 by rule to assist the department in the evaluation of the 10 application pursuant to section 135.64. The application shall 11 be accompanied by a fee equivalent to three-tenths of one 12 percent of the anticipated cost of the project with a minimum 13 fee of six hundred dollars and a maximum fee of twenty-one 14 thousand dollars. The fee shall be remitted by the department 15 to the treasurer of state, who shall place it in the general 16 fund of the state. If an application is voluntarily withdrawn 17 within thirty calendar days after submission, seventy-five 18 percent of the application fee shall be refunded; if the 19 application is voluntarily withdrawn more than thirty but 20 within sixty days after submission, fifty percent of the 21 application fee shall be refunded; if the application is 22 withdrawn voluntarily more than sixty days after submission, 23 twenty-five percent of the application fee shall be refunded. 24 Notwithstanding the required payment of an application fee 25 under this subsection , an applicant for a new institutional 26 health service or a changed institutional health service 27 offered or developed by an intermediate care facility for 28 persons with an intellectual disability or an intermediate care 29 facility for persons with mental illness as defined pursuant to 30 section 135C.1 is exempt from payment of the application fee. 31 Sec. 7. Section 135.63, subsection 2, paragraphs a and e, 32 Code 2023, are amended to read as follows: 33 a. Private offices and private clinics of an individual 34 physician, dentist, or other practitioner or group of 35 -7- LSB 1825SV (6) 90 pf/rh 7/ 20

S.F. 506 health care providers, except as provided by section 135.61, 1 subsection 18 , paragraphs “g” , “h” , and “m” , and section 135.61, 2 subsections 20 and 21 . 3 e. A health maintenance organization or combination of 4 health maintenance organizations or an institutional health 5 facility controlled directly or indirectly by a health 6 maintenance organization or combination of health maintenance 7 organizations, except when the health maintenance organization 8 or combination of health maintenance organizations does any of 9 the following: 10 (1) Constructs constructs , develops, renovates, relocates, 11 or otherwise establishes an institutional health facility. 12 (2) Acquires major medical equipment as provided by section 13 135.61, subsection 18 , paragraphs “i” and “j” . 14 Sec. 8. Section 135.63, subsection 2, paragraph h, Code 15 2023, is amended by striking the paragraph. 16 Sec. 9. Section 135.63, subsection 4, unnumbered paragraph 17 1, Code 2023, is amended to read as follows: 18 A copy of the application shall be sent to the department 19 of human services at the time the application is submitted to 20 the Iowa department of public health. The department shall not 21 process applications for and the council shall not consider a 22 new or changed institutional health service for an intermediate 23 care facility for persons with an intellectual disability 24 unless both of the following conditions are met: 25 Sec. 10. Section 135.64, subsection 1, unnumbered paragraph 26 1, Code 2023, is amended to read as follows: 27 In determining whether a certificate of need shall be 28 issued, the department and council shall consider the 29 following: 30 Sec. 11. Section 135.64, subsection 1, paragraph r, Code 31 2023, is amended to read as follows: 32 r. The recommendations of staff personnel of the department 33 assigned to the area of certificate of need, concerning the 34 application , if requested by the council . 35 -8- LSB 1825SV (6) 90 pf/rh 8/ 20

S.F. 506 Sec. 12. Section 135.64, subsection 2, unnumbered paragraph 1 1, Code 2023, is amended to read as follows: 2 In addition to the findings required with respect to any 3 of the criteria listed in subsection 1 of this section , the 4 council department shall grant a certificate of need for a new 5 institutional health service or changed institutional health 6 service only if it the department finds in writing, on the 7 basis of data submitted to it by the department , that: 8 Sec. 13. Section 135.66, Code 2023, is amended to read as 9 follows: 10 135.66 Procedure upon receipt of application —— public 11 notification. 12 1. a. Within fifteen business days after receipt of an 13 application for a certificate of need, the department shall 14 examine the application for form and completeness and accept 15 or reject it. An application shall be rejected only if it 16 fails to provide all information required by the department 17 pursuant to section 135.63, subsection 1 . The department shall 18 promptly return to the applicant any rejected application, with 19 an explanation of the reasons for its rejection. 20 b. Within thirty days after notifying the applicant of 21 rejection of the application, the applicant may resubmit a 22 revised application for review under this subsection and shall 23 not be subject to payment of another required application 24 fee pursuant to section 135.63. If a subsequent rejection 25 is issued, the applicant shall resubmit the application in 26 accordance with and shall be subject to the procedure and 27 requirements for an initial application. 28 2. Upon acceptance of an application for a certificate 29 of need, the department shall promptly undertake to notify 30 all affected persons in writing that formal review of the 31 application has been initiated. Notification to those affected 32 persons who are consumers or third-party payers or other 33 payers for health services may be provided by distribution of 34 the pertinent information to the news media by an electronic 35 -9- LSB 1825SV (6) 90 pf/rh 9/ 20

S.F. 506 distribution method available to the department . 1 3. Each application accepted by the department shall 2 be formally reviewed for the purpose of furnishing to the 3 council department the information necessary to enable it the 4 department to determine whether or not to grant the certificate 5 of need. A formal review shall consist at a minimum of the 6 following steps: 7 a. Evaluation of the application against the criteria 8 specified in section 135.64 . 9 b. A public hearing on the application, to be held prior to 10 completion of the evaluation required by paragraph “a” , shall be 11 conducted by the council department . 12 4. When a hearing is to be held pursuant to subsection 13 3 , paragraph “b” , the department shall give at least ten 14 days’ notice of the time and place of the hearing. At the 15 hearing, any Any affected person or that person’s designated 16 representative shall have the opportunity to present testimony 17 may submit written testimony in a manner prescribed by the 18 department, beginning on the day the notice of the hearing is 19 given until the day prior to the date fixed for the hearing . 20 Sec. 14. Section 135.67, subsection 1, Code 2023, is amended 21 to read as follows: 22 1. The department may waive the letter of intent procedures 23 prescribed by section 135.65 and substitute conduct a summary 24 review procedure, which shall be established by rules of the 25 department, when it accepts an application for a certificate of 26 need for a project which meets any of the following criteria 27 in paragraphs “a” through “e” : 28 a. A project which is limited to repair or replacement of a 29 facility or equipment damaged or destroyed by a disaster, and 30 which will not expand the facility nor increase the services 31 provided beyond the level existing prior to the disaster. 32 b. A project necessary to enable the facility or service to 33 achieve or maintain compliance with federal, state, or other 34 appropriate licensing, certification, or safety requirements. 35 -10- LSB 1825SV (6) 90 pf/rh 10/ 20

S.F. 506 c. A project which will not change the existing bed capacity 1 of the applicant’s facility or service, as determined by the 2 department, by more than ten percent or ten beds, whichever is 3 less, over a two-year period. 4 d. A project the total cost of which will not exceed one 5 hundred fifty thousand dollars. 6 e. d. Any other project for which the applicant proposes 7 and the department agrees to summary review. 8 Sec. 15. Section 135.69, Code 2023, is amended to read as 9 follows: 10 135.69 Council Department to make final decision. 11 1. The department shall complete its formal review of 12 the application within ninety days after acceptance of the 13 application, except as otherwise provided by section 135.72, 14 subsection 4 . Upon completion of the formal review, the 15 council department shall approve or deny the application. The 16 council department shall issue written findings stating the 17 basis for its the department’s decision on the application, and 18 the department shall send copies of the council’s decision and 19 the written findings supporting the decision to the applicant 20 and to any other person who so requests. 21 2. Failure by the council department to issue a written 22 decision on an application for a certificate of need within the 23 time required by this section shall constitute denial approval 24 of and final administrative action on the application. 25 Sec. 16. Section 135.70, Code 2023, is amended to read as 26 follows: 27 135.70 Appeal of certificate of need decisions. 28 The council’s department’s decision on an application for 29 certificate of need, when announced pursuant to section 135.69 , 30 is a final decision. Any dissatisfied party who is an affected 31 person with respect to the application, and who participated 32 or sought unsuccessfully to participate in the formal review 33 procedure prescribed by section 135.66 , may request a rehearing 34 in accordance with chapter 17A and rules of the department. 35 -11- LSB 1825SV (6) 90 pf/rh 11/ 20

S.F. 506 If a rehearing is not requested or an affected party remains 1 dissatisfied after the request for rehearing, an appeal may be 2 taken in the manner provided by chapter 17A . Notwithstanding 3 the Iowa administrative procedure Act, chapter 17A , a request 4 for rehearing is not required, prior to appeal under section 5 17A.19 . 6 Sec. 17. Section 135.71, subsection 1, Code 2023, is amended 7 to read as follows: 8 1. A certificate of need shall be valid for a maximum of 9 one year from the date of issuance. Upon the expiration of 10 the certificate, or at any earlier time while the certificate 11 is valid the holder thereof shall provide the department such 12 information on the development of the project covered by 13 the certificate as the department may request. The council 14 department shall determine at the end of the certification 15 period whether sufficient progress is being made on the 16 development of the project. The certificate of need may be 17 extended by the council department for additional periods of 18 time as are reasonably necessary to expeditiously complete the 19 project, but may be revoked by the council department at the 20 end of the first or any subsequent certification period for 21 insufficient progress in developing the project. 22 Sec. 18. Section 135.72, unnumbered paragraph 1, Code 2023, 23 is amended to read as follows: 24 The department shall adopt , with approval of the council, 25 such administrative rules as are necessary to enable it the 26 department to implement this subchapter . These rules shall 27 include: 28 Sec. 19. Section 135.72, subsection 4, Code 2023, is amended 29 to read as follows: 30 4. Criteria for determining when it is not feasible to 31 complete formal review of an application for a certificate of 32 need within the time limits specified in section 135.69 . The 33 rules adopted under this subsection shall include criteria for 34 determining whether an application proposes introduction of 35 -12- LSB 1825SV (6) 90 pf/rh 12/ 20

S.F. 506 technologically innovative equipment, and if so, procedures 1 to be followed in reviewing the application. However, a rule 2 adopted under this subsection shall not permit a deferral of 3 more than sixty thirty days beyond the time when a decision is 4 required under section 135.69 , unless both the applicant and 5 the department agree to a longer deferment. 6 Sec. 20. Section 135.73, subsection 1, Code 2023, is amended 7 to read as follows: 8 1. Any party constructing a new institutional health 9 facility or an addition to or renovation of an existing 10 institutional health facility without first obtaining a 11 certificate of need or, in the case of a mobile health service, 12 ascertaining that the mobile health service has received 13 certificate of need approval, as required by this subchapter , 14 shall be denied licensure or change of licensure by the 15 appropriate responsible licensing agency of this state. 16 Sec. 21. Section 135.73, subsection 2, paragraph a, Code 17 2023, is amended to read as follows: 18 a. A class I violation is one in which a party offers a 19 new institutional health service or changed institutional 20 health service modernization or acquisition without review and 21 approval by the council department . A party in violation is 22 subject to a penalty of three hundred dollars for each day of a 23 class I violation. The department may seek injunctive relief 24 which shall include restraining the commission or continuance 25 of an act which would violate the provisions of this paragraph. 26 Notice and opportunity to be heard shall be provided to a party 27 pursuant to rule of civil procedure 1.1507 and contested case 28 procedures in accordance with chapter 17A . The department may 29 reduce, alter, or waive a penalty upon the party showing good 30 faith compliance with the department’s request to immediately 31 cease and desist from conduct in violation of this section . 32 Sec. 22. Section 135.131, subsection 1, paragraph a, Code 33 2023, is amended to read as follows: 34 a. “Birth center” means birth center as defined in section 35 -13- LSB 1825SV (6) 90 pf/rh 13/ 20

S.F. 506 135.61 a facility or institution, which is not an ambulatory 1 surgical center or a hospital or in a hospital, in which 2 births are planned to occur following a normal, uncomplicated, 3 low-risk pregnancy . 4 Sec. 23. NEW SECTION . 135C.35A Moratorium —— new 5 construction or permanent change in bed capacity —— nursing 6 facilities. 7 1. Beginning July 1, 2023, the department may impose a 8 temporary moratorium on submission of applications for new 9 construction or a permanent change in bed capacity of a 10 nursing facility for an initial period of twelve months. The 11 department may extend the moratorium in six-month increments 12 following the conclusion of the initial twelve-month period. 13 The department shall document, in writing, the need for each 14 extension of the moratorium. 15 2. The department may waive the moratorium as specified in 16 this section if the department determines there is a need for 17 specialized needs beds. 18 3. The department shall review the moratorium as specified 19 in this section during the fiscal year beginning July 1, 2026, 20 and shall make a recommendation by February 1, 2027, to the 21 general assembly regarding the continuation or repeal of the 22 moratorium. 23 Sec. 24. Section 135P.1, Code 2023, is amended to read as 24 follows: 25 135P.1 Definitions. 26 For the purposes of this chapter , unless the context 27 otherwise requires: 28 1. “Adverse health care incident” means an objective and 29 definable outcome arising from or related to patient care that 30 results in the death or physical injury of a patient. 31 2. “Health care provider” means a physician or osteopathic 32 physician licensed under chapter 148 , a physician assistant 33 licensed and practicing under a supervising physician pursuant 34 to chapter 148C , a podiatrist licensed under chapter 149 , a 35 -14- LSB 1825SV (6) 90 pf/rh 14/ 20

S.F. 506 chiropractor licensed under chapter 151 , a licensed practical 1 nurse, a registered nurse, or an advanced registered nurse 2 practitioner licensed under chapter 152 or 152E , a dentist 3 licensed under chapter 153 , an optometrist licensed under 4 chapter 154 , a pharmacist licensed under chapter 155A , or 5 any other person who is licensed, certified, or otherwise 6 authorized or permitted by the law of this state to administer 7 health care in the ordinary course of business or in the 8 practice of a profession. 9 3. “Health facility” means an institutional health facility 10 as defined in section 135.61 , a hospice licensed under chapter 11 135J , a home health agency as defined in section 144D.1 , an 12 assisted living program certified under chapter 231C , a clinic, 13 a community health center, or the university of Iowa hospitals 14 and clinics, and includes any corporation, professional 15 corporation, partnership, limited liability company, limited 16 liability partnership, or other entity comprised of such health 17 facilities. 18 4. “Institutional health facility” means any of the 19 following, without regard to whether the facilities referred 20 to are publicly or privately owned or are organized for profit 21 or not, or whether the facilities are part of or sponsored by a 22 health maintenance organization: 23 a. A hospital as defined in section 135B.1. 24 b. A health care facility as defined in section 135C.1. 25 c. An organized outpatient health facility as defined in 26 section 135.61. 27 d. An outpatient surgical facility as defined in section 28 135.61. 29 e. A community mental health center as defined in section 30 230A.102. 31 f. A birth center as defined in section 135.131. 32 4. 5. “Open discussion” means all communications that are 33 made under section 135P.3 , and includes all memoranda, work 34 products, documents, and other materials that are prepared 35 -15- LSB 1825SV (6) 90 pf/rh 15/ 20

S.F. 506 for or submitted in the course of or in connection with 1 communications under section 135P.3 . 2 5. 6. “Patient” means a person who receives medical care 3 from a health care provider, or if the person is a minor, 4 deceased, or incapacitated, the person’s legal representative. 5 Sec. 25. REPEAL. Section 135.65, Code 2023, is repealed. 6 DIVISION II 7 BIRTH CENTERS 8 Sec. 26. BIRTH CENTERS —— PROVISIONAL LICENSURE. The 9 department of inspections and appeals shall develop minimum 10 standards for provisional licensure of a birth center and 11 shall adopt rules pursuant to chapter 17A to administer 12 birth center provisional licensure. The department shall 13 issue a provisional license to a birth center that meets the 14 minimum standards. A provisional license may be granted for 15 a period of no more than one year from the date the specified 16 administrative rules are adopted. A provisional license shall 17 expire at the end of the license terms and is not renewable. 18 Sec. 27. EMERGENCY RULES. The department of inspections 19 and appeals shall adopt emergency rules under section 17A.4, 20 subsection 3, and section 17A.5, subsection 2, paragraph 21 “b”, to implement the birth center provisional licensure 22 provisions of this division of this Act, within six months 23 of the effective date of this division of this Act and shall 24 submit such rules to the administrative rules coordinator and 25 the administrative code editor pursuant to section 17A.5, 26 subsection 1, within the same period. The rules shall be 27 effective immediately upon filing unless a later date is 28 specified in the rules. Any rules adopted in accordance with 29 this section shall also be published as a notice of intended 30 action as provided in section 17A.4. 31 Sec. 28. PROPOSED LEGISLATION —— BIRTH CENTER 32 LICENSURE. The department of inspections and appeals shall 33 submit proposed legislation under section 2.16 that provides 34 for state licensure of and inspection requirements for birth 35 -16- LSB 1825SV (6) 90 pf/rh 16/ 20

S.F. 506 centers to be considered by the 2024 session of the general 1 assembly. 2 Sec. 29. DEFINITION. For the purposes of this division 3 of this Act, “birth center” means a facility or institution, 4 which is not an ambulatory surgical center or a hospital or in 5 a hospital, in which births are planned to occur following a 6 normal, uncomplicated, low-risk pregnancy. 7 Sec. 30. EFFECTIVE DATE. This division of this Act, being 8 deemed of immediate importance, takes effect upon enactment. 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanation’s substance by the members of the general assembly. 12 This bill relates to health facilities and services 13 including licensing, the health facilities council (HFC), and 14 the certificate of need (CON) process. 15 DIVISION I —— CERTIFICATE OF NEED —— HEALTH FACILITIES 16 COUNCIL. This division of the bill eliminates the HFC and 17 assigns the duties of the HFC to the department of health 18 and human services (HHS). The bill amends the definition of 19 “affected person” with respect to an application for CON to 20 eliminate from inclusion in the definition each institutional 21 health facility or health maintenance organization which, 22 prior to receipt of the application, has formally indicated an 23 intent to furnish in the future institutional health services 24 similar to the new institutional health service proposed in the 25 application; any other person designated as an affected person 26 by rules of the department; and any payer or third-party payer 27 for health services. 28 The bill amends the definition of “institutional health 29 facility” by removing a “community mental health facility” 30 and a “birth center” from inclusion in the definition, 31 thereby making these facilities and centers exempt from CON 32 requirements. 33 The bill amends the definition of “new institutional 34 health service” or “changed institutional health service” 35 -17- LSB 1825SV (6) 90 pf/rh 17/ 20

S.F. 506 by striking many of the services included in current Code 1 and only including: the construction, development, or other 2 establishment of a new institutional health facility regardless 3 of ownership; relocation of an institutional health facility; 4 any capital expenditure, lease, or donation by or on behalf of 5 an institutional health facility in excess of certain amounts 6 beginning with $3.5 million on January 1, 2023, and increasing 7 to $5 million beginning January 1, 2038, within a 12-month 8 period, and a permanent change (effective for one year or more) 9 in the bed capacity of an institutional health facility. Under 10 the bill, only these services included in the definition are 11 subject to CON requirements. 12 The bill eliminates terms defined and references to these 13 terms in current Code that are no longer necessary due to 14 provisions of the bill including the definitions of “birth 15 center” and “mobile health service”. 16 The bill requires that an application for CON be accompanied 17 by an economic impact statement that includes information 18 required by rule to assist in evaluation of the application. 19 Due to the combining of the department of human services 20 (DHS) and the department of public health (DPH) into HHS, the 21 bill eliminates the requirement that a copy of the application 22 for CON be sent to DHS at the time the application is submitted 23 to DPH. 24 Current law provides that within 15 business days after 25 receipt of an application for a CON, HHS shall examine the 26 application and accept or reject it, and that HHS shall 27 promptly return to the applicant any rejected application, with 28 an explanation of the reasons for its rejection. The bill adds 29 a provision that within 30 days after notifying the applicant 30 of rejection of the application, the applicant may resubmit 31 a revised application for review and shall not be subject to 32 payment of another required application fee. Further, if a 33 subsequent rejection is issued, the applicant shall resubmit 34 the application in accordance with and shall be subject to the 35 -18- LSB 1825SV (6) 90 pf/rh 18/ 20