HF 919 (LSB 2687HV (1) 91)

HOUSE FILE 919

BY  COMMITTEE ON HEALTH AND HUMAN SERVICES

(SUCCESSOR TO HSB 268)

A BILL FOR

An Act relating to specialty hospital designations for certain nonprofit organizations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 135B.1, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  “Specialty hospital” means a hospital described by all of the following:
   a.  The hospital is owned and operated by a nonprofit organization.
   b.  The hospital only serves individuals thirty years of age and younger.
   c.  More than sixty percent of the individuals served by the hospital receive medical assistance under chapter 249A.
   d.  The hospital specializes in pediatric rehabilitation and treating children with a behavioral health condition or complex medical needs.
   e.  The hospital has no more than one hundred inpatient beds.
   f.  The hospital provides outpatient services.
   g.  The hospital was a licensed nursing facility under section 135C.1, prior to July 1, 2025.
    Sec. 2.  NEW SECTION.  135B.40  Specialty hospitals.
   1.  A specialty hospital shall establish formal criteria based on objective medical standards for patient admission, discharge, and continuation of care.
   2.  The department shall adopt rules pursuant to chapter 17A relating to the application of criteria established under subsection 1 when reviewing patient discharges from a specialty hospital.
   3.  The department of health and human services shall provide notice to a specialty hospital of a significant change in federal Medicaid reimbursement to hospitals which would negatively impact the specialty hospital. To the extent permitted by law, the department of health and human services shall collaborate with the specialty hospital to mitigate the negative effects of a significant change in federal Medicaid reimbursement to hospitals.
    Sec. 3.  DEPARTMENT OF INSPECTIONS, APPEALS, AND LICENSING —— DEPARTMENT OF HEALTH AND HUMAN SERVICES —— SPECIALTY HOSPITALS.
   1.  For purposes of this section, “licensed entity” means an entity granted a provisional general hospital license with a specialty hospital designation under subsection 2, paragraph “a”.
   2.  On or before July 1, 2025, the department of inspections, appeals, and licensing shall, to the extent not prohibited by federal law, do all of the following:
   a.  Grant a provisional general hospital license with a specialty hospital designation to an entity that meets the definition of a specialty hospital under section 135B.1. A provisional license granted under this paragraph shall enable the licensed entity to participate in hospital-based enhanced reimbursement.
   b.  Approve a licensed entity to obtain accreditation from an accrediting organization approved by the federal centers for Medicare and Medicaid services.
   3.  On or before July 1, 2025, the department of health and human services shall set reimbursement rates for inpatient care provided by a licensed entity. Reimbursement rates under this paragraph shall be equal to the licensed entity’s average allowable per diem costs, and adjusted for inflation.
   4.  On or before July 1, 2025, the department of health and human services and the department of inspections, appeals, and licensing shall, to the extent not prohibited by federal law, do the following:
   a.  Grant waivers for facility requirements under each department’s rulemaking authority to the extent necessary to allow a licensed entity to operate as a specialty hospital. A waiver granted under this paragraph shall be valid for no more than twenty-four consecutive months from the date of enactment of this Act, or until the licensed entity complies with all facility requirements, whichever is earlier.
   b.  Collaborate with each other and a licensed entity to obtain necessary federal waivers and approval to allow the licensed entity to operate as a specialty hospital as defined under 42 C.F.R. §411.351.
   c.  Exempt a licensed entity from being required to provide emergency services, other than emergency services the licensed entity provided prior to July 1, 2025.
   d.  Exempt a licensed entity from being required to maintain, or have available, laboratory and pathology services and facilities, other than laboratory and pathology services and facilities the licensed entity maintained prior to July 1, 2025.
   e.  Exempt a licensed entity from construction standards applicable only to hospitals and off-site premises, other than the construction standards applicable only to hospitals and off-site premises standards that the licensed entity complied with prior to July 1, 2025. The exemption under this paragraph shall include exemption from the standards set forth in the guidelines for design and construction of hospitals as published by the facility guidelines institute.
   5.  On or before July 1, 2025, the department of health and human services, the department of inspections, appeals, and licensing, and the state health facilities council established in section 10A.712 shall, to the extent not prohibited by federal law, do all of the following:
   a.  Waive any requirement necessary to allow a licensed entity to redesignate nursing facility beds as specialty hospital beds.
   b.  Waive any requirement necessary to allow a licensed entity to expand up to one hundred specialty hospital beds.
   6.  The department of inspections, appeals, and licensing, and the department of health and human services, shall adopt rules pursuant to chapter 17A as necessary to implement this section.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to specialty hospital designations for certain nonprofit organizations.
   The bill defines “specialty hospital” as a hospital that is owned and operated by a nonprofit organization; only serves individuals 30 years of age and younger; has more than 60 percent of patients receiving medical assistance under Code chapter 249A (medical assistance); specializes in pediatric rehabilitation and treating children with a behavioral health condition or complex medical needs; has no more than 100 inpatient beds; provides outpatient services; and was a licensed nursing facility prior to July 1, 2025.
   The bill requires a specialty hospital to establish formal criteria based on objective medical standards for patient admission, discharge, and continuation of care. The department of inspections, appeals, and licensing (DIAL) must adopt rules relating to the application of criteria when reviewing patient discharges from a specialty hospital.
   The bill requires the department of health and human services (HHS) to provide notice to a specialty hospital of a significant change in federal Medicaid reimbursement to hospitals which would negatively impact the specialty hospital. The bill requires HHS, to the extent permitted by law, to collaborate with specialty hospitals to mitigate the negative effects of a significant change in federal Medicaid reimbursement to hospitals.
   The bill requires HHS to set reimbursement rates for inpatient care provided by a specialty hospital at a rate equal to the specialty hospital’s average allowable per diem costs as adjusted for inflation.
   The bill requires DIAL, HHS, and the state health facilities council, to the extent not prohibited by federal law, to waive certain regulatory requirements, exempt a specialty hospital from certain regulatory requirements, and support a specialty hospital in obtaining a waiver from or achieving compliance with certain federal regulatory requirements as necessary to allow the specialty hospital to operate. The bill directs DIAL and HHS to adopt rules to implement such waivers and exemptions, or permit such assistance.