Senate File 575 - Introduced SENATE FILE 575 BY COMMITTEE ON HEALTH AND HUMAN SERVICES (SUCCESSOR TO SSB 1163) A BILL FOR An Act relating to health care including a funding model for 1 the rural health care system; the elimination of several 2 health care-related award, grant, residency, and fellowship 3 programs; establishment of a health care professional 4 incentive program; Medicaid graduate medical education; the 5 health facilities council; and the Iowa health information 6 network, making appropriations, and including effective date 7 provisions. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 1555SV (3) 91 lh/ko

S.F. 575 DIVISION I 1 HEALTH CARE HUB-AND-SPOKE PARTNERSHIP FUNDING MODEL 2 Section 1. HEALTH CARE HUB-AND-SPOKE PARTNERSHIP FUNDING 3 MODEL APPROVAL. The department of health and human services 4 shall submit to the centers for Medicare and Medicaid services 5 of the United States department of health and human services 6 a request for approval for a health care hub-and-spoke 7 partnership funding model for the purpose of improving Iowa’s 8 rural health system to establish sufficient financial support 9 for collaboration among regional health care providers in rural 10 areas to transform health care delivery to provide quality and 11 sustainable care. 12 Sec. 2. EFFECTIVE DATE. This division of this Act, being 13 deemed of immediate importance, takes effect upon enactment. 14 DIVISION II 15 ELIMINATION OF PRIMECARRE PROGRAMS —— DEPARTMENT OF HEALTH AND 16 HUMAN SERVICES 17 Sec. 3. Section 135.107, subsection 1, Code 2025, is amended 18 by adding the following new paragraph: 19 NEW PARAGRAPH . f. Coordinate with the college student aid 20 commission to administer the health professional incentive 21 program created in section 256.222. 22 Sec. 4. Section 135.107, subsections 2 and 3, Code 2025, are 23 amended by striking the subsections. 24 Sec. 5. Section 135B.33, subsection 3, Code 2025, is amended 25 to read as follows: 26 3. The health facilities may seek technical assistance 27 or apply for matching grant funds for the plan development. 28 The department shall require compliance with subsection 1 , 29 paragraphs “a” through “h” , when the facility applies for 30 matching grant funds. 31 Sec. 6. TRANSITION PROVISIONS —— ACCOUNT. 32 1. The department of health and human services shall make 33 loan repayments pursuant to a loan repayment program contract, 34 including a United States department of health and human 35 -1- LSB 1555SV (3) 91 lh/ko 1/ 41

S.F. 575 services state loan repayment program contract, executed on 1 or before December 31, 2025, under the primary care provider 2 loan repayment program in section 135.107, Code 2025, if the 3 recipient remains in compliance with all obligations under the 4 loan repayment program contract. 5 2. a. The department of health and human services shall 6 create an account for deposit of any moneys encumbered or 7 obligated pursuant to a loan repayment program contract as 8 specified in subsection 1. The department shall ensure that 9 the encumbered and obligated moneys remain available for the 10 duration of the loan repayment program contract. Moneys in the 11 account are appropriated to the department for the purposes of 12 this section. 13 b. Notwithstanding section 8.33, any balance in the account 14 shall not revert but shall remain available for the duration of 15 such loan repayment program contracts. Notwithstanding section 16 12C.7, subsection 2, interest or earnings on moneys deposited 17 in the account shall be credited to the account. 18 c. Upon expiration of all loan repayment program contract 19 periods and the expenditure of all moneys encumbered and 20 obligated under such loan repayment contracts, any unencumbered 21 or unobligated moneys remaining in the account created under 22 this section shall be deposited in the health care professional 23 incentive program fund created in section 256.222, as enacted 24 by this Act. 25 DIVISION III 26 ELIMINATION OF HEALTH CARE-RELATED LOAN REPAYMENT AND FINANCIAL 27 AWARD PROGRAMS —— COLLEGE STUDENT AID COMMISSION 28 Sec. 7. REPEAL. Sections 256.221, 256.223, 256.224, and 29 256.225, Code 2025, are repealed. 30 Sec. 8. TRANSITION PROVISIONS. 31 1. The college student aid commission shall make loan 32 repayments pursuant to a program agreement entered into on or 33 before June 30, 2025, by an eligible student and the commission 34 under the rural Iowa primary care loan repayment program 35 -2- LSB 1555SV (3) 91 lh/ko 2/ 41

S.F. 575 in section 256.221, Code 2025, if the student remains in 1 compliance with all obligations under the program agreement. 2 2. The college student aid commission shall make loan 3 repayments pursuant to a contract entered into on or before 4 June 30, 2025, by a health care professional and the commission 5 under the health care professional recruitment program in 6 section 256.223, Code 2025, if the health care professional 7 remains in compliance with all obligations under the contract. 8 3. The college student aid commission shall provide the 9 annual award to a recipient selected on or before June 30, 10 2025, for an award under the health care award program in 11 section 256.224, Code 2025. 12 4. The college student aid commission shall make loan 13 repayments pursuant to a program agreement entered into on or 14 before June 30, 2025, by a mental health professional and the 15 commission under the mental health professional loan repayment 16 program in section 256.225, Code 2025, if the mental health 17 professional remains in compliance with all obligations under 18 the program agreement. 19 Sec. 9. TRANSFER OF MONEYS. On the effective date of this 20 division of this Act, any unencumbered and unobligated moneys 21 remaining in the following funds shall be transferred to the 22 health care professional incentive program fund created in 23 section 256.222, as enacted in this Act: 24 1. The rural Iowa primary care trust fund created in section 25 256.221, subsection 12, Code 2025. 26 2. The health care professional recruitment fund created in 27 section 256.223, subsection 4, Code 2025. 28 3. The health care award fund created in section 256.224, 29 subsection 6, Code 2025. 30 4. The mental health professional loan repayment fund 31 created in section 256.225, subsection 7, Code 2025. 32 Sec. 10. TRANSITION —— ACCOUNTS. 33 1. The college student aid commission shall create 34 individual accounts for the deposit of any moneys encumbered or 35 -3- LSB 1555SV (3) 91 lh/ko 3/ 41

S.F. 575 obligated relating to a loan repayment or award funded under 1 each of the following programs: 2 a. The rural Iowa primary care loan repayment program under 3 section 256.221, Code 2025. 4 b. The health care professional recruitment program under 5 section 256.223, Code 2025. 6 c. The health care award program under section 256.224, Code 7 2025. 8 d. The mental health professional loan repayment program 9 under section 256.225, Code 2025. 10 2. Notwithstanding section 8.33, any balance in any of 11 the accounts created under subsection 1 shall not revert but 12 shall remain available for the duration of all applicable 13 loan repayments and awards. Notwithstanding section 12C.7, 14 subsection 2, interest or earnings on moneys deposited in each 15 account shall be credited to the respective account. 16 3. Upon expiration of all program agreement, contract, 17 and award disbursement periods and the expenditure of all 18 moneys encumbered and obligated under such program agreements, 19 contracts, and awards, any unencumbered or unobligated moneys 20 remaining in the accounts created under this section shall be 21 deposited in the health care professional incentive program 22 fund created in section 256.222, as enacted by this Act. 23 DIVISION IV 24 HEALTH CARE PROFESSIONAL INCENTIVE PROGRAM ESTABLISHED 25 Sec. 11. NEW SECTION . 256.222 Health care professional 26 incentive program —— fund. 27 1. Definitions. For purposes of this section, unless the 28 context otherwise requires: 29 a. “Award” means either of the following: 30 (1) A loan repayment made on behalf of an eligible health 31 care professional on the total amount owed, including principal 32 and interest, by the eligible health care professional on any 33 of the following: 34 (a) A federally guaranteed Stafford loan under the federal 35 -4- LSB 1555SV (3) 91 lh/ko 4/ 41

S.F. 575 family education loan program or the federal direct loan 1 program. 2 (b) A federal grad plus loan. 3 (c) A consolidated federally guaranteed Stafford loan under 4 the federal family education loan program or the federal direct 5 loan program. 6 (d) A consolidated federal grad plus loan. 7 (2) An income bonus paid to an eligible health care 8 professional. 9 b. “Commission” means the college student aid commission. 10 c. “Department” means the department of health and human 11 services. 12 d. “Eligible health care profession” means health care 13 occupational categories that are in high demand, as determined 14 and maintained on a list by the department, and may include but 15 are not limited to physicians, physician assistants, registered 16 nurses, nurse practitioners, nurse educators, and mental health 17 professionals. 18 e. “Eligible health care professional” means an individual 19 currently employed, or who will be employed, in an eligible 20 health care profession that is located in an eligible practice 21 area. 22 f. “Eligible practice area” means a geographic region 23 or county in this state that has a shortage of health care 24 professionals as determined by the department. 25 g. “Employment obligation” means the number of consecutive 26 years an eligible health care professional must practice. 27 (1) If practicing full-time, which means at least two 28 thousand eighty hours of work in a calendar year, including all 29 paid holidays, vacations, sick time, and other paid leave, an 30 eligible health care professional must practice for five years. 31 (2) If practicing part-time, which means at least one 32 thousand five hundred sixty hours of work in a calendar year, 33 including all paid holidays, vacations, sick time, and other 34 paid leave, an eligible health care professional must practice 35 -5- LSB 1555SV (3) 91 lh/ko 5/ 41

S.F. 575 for seven years. 1 h. “Program” means the health care professional incentive 2 program established in this section. 3 2. Program established. The health care professional 4 incentive program is established and shall be administered 5 by the commission, in coordination with the department, for 6 the purpose of offering awards to recruit and retain eligible 7 health care professionals for employment in eligible practice 8 areas. For the fiscal year beginning July 1, 2025, and 9 each fiscal year thereafter, the commission, in coordination 10 with the department, shall determine the number of awards 11 available for each eligible health care profession prior to the 12 commencement of the fiscal year. 13 3. Legislative intent. It is the intent of the general 14 assembly that the program shall not interfere with local 15 community investments to recruit and retain health care 16 professionals. 17 4. Exceptions. An eligible health care professional shall 18 be ineligible for the program if the eligible health care 19 professional is currently participating in, or has participated 20 in, any of the following: 21 a. The primary care provider loan repayment program pursuant 22 to section 135.107, Code 2025. 23 b. The rural Iowa primary care loan repayment program 24 pursuant to section 256.221, Code 2025. 25 c. The health care professional recruitment program pursuant 26 to section 256.223, Code 2025. 27 d. The health care award program pursuant to section 28 256.224, Code 2025. 29 e. The mental health professional loan repayment program 30 pursuant to section 256.225, Code 2025. 31 5. Program requirements. 32 a. An eligible health care professional may submit an 33 application for the program to the commission in the form and 34 manner prescribed by the commission. The applicant shall 35 -6- LSB 1555SV (3) 91 lh/ko 6/ 41

S.F. 575 elect to receive an award as either a loan repayment or an 1 income bonus if selected for the program, and shall submit any 2 additional information requested by the commission. 3 b. The commission shall give priority to an applicant 4 fulfilling a full-time employment obligation. 5 c. If selected for an award, the eligible health care 6 professional and the commission shall execute a program 7 agreement that specifies all of the following: 8 (1) The date the eligible health care professional’s 9 employment obligation begins, which shall be no later than six 10 months from the date the program agreement is executed. 11 (2) The date the health care professional’s employment 12 obligation terminates. 13 (3) Whether the award is a loan repayment or an income 14 bonus, and the terms and conditions related to the award, 15 including the aggregate award amount that the eligible health 16 care professional will receive. 17 (4) Requirements regarding the eligible health care 18 professional’s license to practice in this state while 19 participating in the program. 20 (5) All other terms and conditions agreed to by the eligible 21 health care professional and the commission. 22 6. Awards. 23 a. Upon verifying the eligible health care professional is 24 in compliance with all terms of the program agreement executed 25 pursuant to subsection 5, paragraph “b” , the commission shall 26 pay the eligible health care professional’s award annually as 27 follows: 28 (1) For a full-time employment obligation, the award shall 29 be paid as follows: 30 (a) An amount equal to twenty percent of the aggregate award 31 shall be paid to the eligible health care professional after 32 the completion of the first year of the eligible health care 33 professional’s employment obligation. 34 (b) An amount equal to fifteen percent of the aggregate 35 -7- LSB 1555SV (3) 91 lh/ko 7/ 41

S.F. 575 award shall be paid to the eligible health care professional 1 after the completion of the second year, the third year, and 2 the fourth year of the eligible health care professional’s 3 employment obligation. 4 (c) An amount equal to thirty-five percent of the aggregate 5 award shall be paid to the eligible health care professional 6 after the completion of the fifth year of the eligible health 7 care professional’s employment obligation. 8 (2) For a part-time employment obligation, the aggregate 9 award shall be prorated by the commission. 10 b. A minimum of every five years, the commission, in 11 consultation with the department, shall establish a list of 12 eligible health care professions and the aggregate award amount 13 for each eligible health care profession. The aggregate award 14 amount shall not exceed two hundred thousand dollars. 15 c. An individual who executed a program agreement under 16 subsection 5, paragraph “b” , prior to the exclusion of the 17 individuals’ health care profession from the list established 18 under paragraph “b” , shall remain eligible for the program per 19 the terms of the individual’s program agreement. 20 7. Health care professional incentive program fund. A 21 health care professional incentive program fund is created in 22 the state treasury under the control of the commission. All 23 moneys deposited or paid into the fund are appropriated to the 24 commission to be used for awards as provided in this section. 25 Notwithstanding section 8.33, moneys in the fund that remain 26 unencumbered or unobligated at the close of each fiscal year 27 shall not revert but shall remain available for expenditure. 28 Notwithstanding section 12C.7, subsection 2, interest or 29 earnings on moneys in the fund shall be credited to the fund 30 and may be utilized by the commission for administrative costs. 31 8. Rules. The commission, in coordination with the 32 department, shall adopt rules pursuant to chapter 17A to 33 administer this section. 34 Sec. 12. EFFECTIVE DATE. This division of this Act, being 35 -8- LSB 1555SV (3) 91 lh/ko 8/ 41

S.F. 575 deemed of immediate importance, takes effect upon enactment. 1 DIVISION V 2 GRADUATE MEDICAL EDUCATION —— MEDICAID SUPPLEMENTAL ENHANCED 3 PAYMENT 4 Sec. 13. GRADUATE MEDICAL EDUCATION —— MEDICAID 5 SUPPLEMENTAL ENHANCED PAYMENT. The department of health and 6 human services shall submit to the centers for Medicare and 7 Medicaid services of the United States department of health 8 and human services a request for approval for a Medicaid 9 supplemental enhanced payment for the purposes of maximizing 10 federal funding opportunities for graduate medical education, 11 and to increase the number of medical residencies in the state. 12 Upon receipt of federal approval, the department of health and 13 human services shall notify the general assembly and the Code 14 editor. 15 Sec. 14. EFFECTIVE DATE. This division of this Act, being 16 deemed of immediate importance, takes effect upon enactment. 17 DIVISION VI 18 ELIMINATION OF HEALTH CARE-RELATED GRANT, RESIDENCY, AND 19 FELLOWSHIP PROGRAMS —— DEPARTMENT OF HEALTH AND HUMAN SERVICES 20 Sec. 15. Section 135.179, subsection 2, Code 2025, is 21 amended to read as follows: 22 2. Funding for the program may be provided through the 23 health care workforce shortage fund or the fulfilling Iowa’s 24 need for dentists matching grant program account created in 25 section 135.175 . The purpose of the program is to establish, 26 expand, or support the placement of dentists in dental or rural 27 shortage areas across the state by providing education loan 28 repayments. 29 Sec. 16. Section 249M.4, subsection 2, Code 2025, is amended 30 to read as follows: 31 2. Moneys in the trust fund shall be used, subject to 32 their appropriation by the general assembly, by the department 33 to reimburse participating hospitals the medical assistance 34 program upper payment limit for inpatient and outpatient 35 -9- LSB 1555SV (3) 91 lh/ko 9/ 41

S.F. 575 hospital services as calculated in this section . Following 1 payment of such upper payment limit to participating hospitals, 2 any remaining funds in the trust fund on an annual basis may be 3 used for any of the following purposes: 4 a. To support medical assistance program utilization 5 shortfalls. 6 b. To maintain the state’s capacity to provide access to and 7 delivery of services for vulnerable Iowans. 8 c. To fund the health care workforce support initiative 9 created pursuant to section 135.175 . 10 d. c. To support access to health care services for 11 uninsured Iowans. 12 e. d. To support Iowa hospital programs and services which 13 expand access to health care services for Iowans. 14 Sec. 17. REPEAL. Sections 135.175, 135.176, 135.178, and 15 135.193, Code 2025, are repealed. 16 Sec. 18. TRANSITION PROVISIONS. 17 1. a. The department of health and human services shall 18 provide matching state funding to a sponsor awarded on or 19 before June 30, 2025, under the medical residency training 20 state matching grants program in section 135.176, Code 2025, 21 until all residents in the funded residencies have completed or 22 left the program. 23 b. The department of health and human services shall provide 24 matching state funding to a sponsor for medical residency 25 training program liability costs awarded on or before June 26 30, 2025, under the medical residency training state matching 27 grants program in section 135.176, Code 2025, until June 30, 28 2026. 29 2. The department of health and human services shall provide 30 matching state funding to a sponsor awarded on or before June 31 30, 2025, under the nurse residency state matching grants 32 program in section 135.178, Code 2025, until all residents have 33 completed or left the nurse residency programs. 34 3. The department of health and human services shall fund 35 -10- LSB 1555SV (3) 91 lh/ko 10/ 41

S.F. 575 a fellowship position pursuant to a program agreement entered 1 into on or before June 30, 2025, by a participating teaching 2 hospital and a participating fellow under the state-funded 3 family medicine obstetrics fellowship program in section 4 135.193, Code 2025, if the participating fellow remains in 5 compliance with all obligations under the program agreement. 6 4. The department of health and human services shall fund 7 a rural psychiatric residency for a resident selected on or 8 before June 30, 2025, until all residents have completed 9 or left the rural psychiatric residencies, pursuant to 10 appropriations as provided in the following: 11 a. 2024 Iowa Acts, chapter 1157, section 5, subsection 3, 12 and 2024 Iowa Acts, chapter 1157, section 22, subsection 5. 13 b. 2023 Iowa Acts, chapter 112, section 5, subsection 4, 14 paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 15 section 29. 16 c. 2022 Iowa Acts, chapter 1131, section 3, subsection 4, 17 paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 18 section 23. 19 d. 2021 Iowa Acts, chapter 182, section 3, subsection 4, 20 paragraph “j”. 21 e. 2019 Iowa Acts, chapter 85, section 3, subsection 4, 22 paragraph “j”, as amended by 2020 Iowa Acts, chapter 1121, 23 section 19. 24 Sec. 19. TRANSFER OF MONEYS. Notwithstanding section 8.33 25 or any other provision to the contrary, any unobligated or 26 unencumbered moneys in any of the following accounts or funds 27 or constituting any specified appropriation, shall not revert 28 but are appropriated to the department of health and human 29 services to fund Medicaid graduate medical education efforts. 30 1. The health care workforce shortage fund created in 31 section 135.175, subsection 1, paragraph “b”, Code 2025. 32 2. The medical residency training account created in 33 section 135.175, subsection 5, paragraph “a”, Code 2025. 34 3. The nurse residency state matching grants program 35 -11- LSB 1555SV (3) 91 lh/ko 11/ 41

S.F. 575 account created in section 135.175, subsection 5, paragraph 1 “b”, Code 2025. 2 4. The health care workforce shortage national initiatives 3 account created in section 135.175, subsection 5, paragraph 4 “c”, Code 2025. 5 5. The family medicine obstetrics fellowship program fund 6 created in section 135.193, Code 2025. 7 6. Moneys appropriated to the department of health and human 8 services for rural psychiatric residencies to fund psychiatric 9 residents to provide mental health services in underserved 10 areas of the state as described in the following: 11 a. 2024 Iowa Acts, chapter 1157, section 5, subsection 3, 12 and 2024 Iowa Acts, chapter 1157, section 22, subsection 5. 13 b. 2023 Iowa Acts, chapter 112, section 5, subsection 4, 14 paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 15 section 29. 16 c. 2022 Iowa Acts, chapter 1131, section 3, subsection 4, 17 paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 18 section 23. 19 d. 2021 Iowa Acts, chapter 182, section 3, subsection 4, 20 paragraph “j”. 21 e. 2019 Iowa Acts, chapter 85, section 3, subsection 4, 22 paragraph “j”, as amended by 2020 Iowa Acts, chapter 1121, 23 section 19. 24 Sec. 20. TRANSITION —— ACCOUNTS. 25 1. The department of health and human services shall create 26 individual accounts for the deposit of any moneys encumbered 27 or obligated relating to a grant awarded, or residency or 28 fellowship funded, under each of the following programs: 29 a. The medical residency training state matching grants 30 program under section 135.176, Code 2025. 31 b. The nurse residency state matching grants program under 32 section 135.178, Code 2025. 33 c. The state-funded family medicine obstetrics fellowship 34 program under section 135.193, Code 2025. 35 -12- LSB 1555SV (3) 91 lh/ko 12/ 41

S.F. 575 d. Rural psychiatric residencies as described in the 1 following: 2 (1) 2024 Iowa Acts, chapter 1157, section 5, subsection 3, 3 and 2024 Iowa Acts, chapter 1157, section 22, subsection 5. 4 (2) 2023 Iowa Acts, chapter 112, section 5, subsection 4, 5 paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 6 section 29. 7 (3) 2022 Iowa Acts, chapter 1131, section 3, subsection 8 4, paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 9 section 23. 10 (4) 2021 Iowa Acts, chapter 182, section 3, subsection 4, 11 paragraph “j”. 12 (5) 2019 Iowa Acts, chapter 85, section 3, subsection 4, 13 paragraph “j”, as amended by 2020 Iowa Acts, chapter 1121, 14 section 19. 15 2. Notwithstanding section 8.33, any balance in any of the 16 accounts created under subsection 1 shall not revert but shall 17 remain available for the duration of all applicable grants, 18 residencies, and fellowships. Notwithstanding section 12C.7, 19 subsection 2, interest or earnings on moneys deposited in each 20 account shall be credited to the respective account. 21 3. Upon expiration of all grant, residency, and fellowship 22 periods and the expenditure of all moneys encumbered under 23 such grants, residencies, and fellowships, any unencumbered or 24 unobligated moneys remaining in any of the accounts created 25 under subsection 1 are appropriated to the department of health 26 and human services for Medicaid graduate medical education 27 efforts. 28 Sec. 21. CONTINGENT EFFECTIVE DATE. This division of 29 this Act takes effect upon the date that the department of 30 health and human services notifies the general assembly and the 31 Code editor of the receipt of federal approval for a Medicaid 32 supplemental enhanced payment for the purposes of maximizing 33 federal funding opportunities for graduate medical education, 34 and to increase the number of medical residencies in the state. 35 -13- LSB 1555SV (3) 91 lh/ko 13/ 41

S.F. 575 DIVISION VII 1 ELIMINATION OF THE STATE-FUNDED PSYCHIATRY RESIDENCY AND 2 FELLOWSHIP POSITIONS —— UNIVERSITY OF IOWA HOSPITALS AND 3 CLINICS 4 Sec. 22. REPEAL. Section 135.180, Code 2025, is repealed. 5 Sec. 23. TRANSITION PROVISIONS. The board of regents 6 shall direct the university of Iowa hospitals and clinics to 7 distribute moneys for state-funded psychiatry residency and 8 fellowship positions approved and awarded on or before June 9 30, 2025, under the state-funded psychiatry residency and 10 fellowship positions in section 135.180, Code 2025, until all 11 residents and fellows have completed or left the state-funded 12 psychiatry residency or fellowship positions. 13 Sec. 24. TRANSITION —— ACCOUNT. 14 1. The board of regents shall direct the university of Iowa 15 hospitals and clinics to create an account for the deposit 16 of moneys encumbered or obligated relating to residency and 17 fellowship positions funded under the state-funded psychiatry 18 residency and fellowship positions under section 135.180, Code 19 2025. 20 2. Notwithstanding section 8.33, any balance in the account 21 created under subsection 1 shall not revert but shall remain 22 available for the duration of all applicable residencies and 23 fellowships. Notwithstanding section 12C.7, subsection 2, 24 interest or earnings on moneys deposited in the account shall 25 be credited to the account. 26 3. Upon expiration of all residency and fellowship periods 27 and the expenditure of all moneys encumbered under such 28 residencies and fellowships, any unencumbered or unobligated 29 moneys remaining in the account created under subsection 1 are 30 appropriated to the department of health and human services for 31 Medicaid graduate medical education efforts. 32 Sec. 25. TRANSFER OF MONEYS. Notwithstanding section 8.33 33 or any other provision to the contrary, any unobligated or 34 unencumbered moneys in the psychiatry residency and fellowship 35 -14- LSB 1555SV (3) 91 lh/ko 14/ 41

S.F. 575 positions fund created in section 135.180, Code 2025, shall 1 not revert but are appropriated to the department of health 2 and human services to fund Medicaid graduate medical education 3 efforts. 4 Sec. 26. CONTINGENT EFFECTIVE DATE. This division of 5 this Act takes effect upon the date that the department of 6 health and human services notifies the general assembly and the 7 Code editor of the receipt of federal approval for a Medicaid 8 supplemental enhanced payment for the purposes of maximizing 9 federal funding opportunities for graduate medical education, 10 and to increase the number of medical residencies in the state. 11 DIVISION VIII 12 ELIMINATION OF THE HEALTH FACILITIES COUNCIL 13 Sec. 27. Section 10A.711, subsection 5, Code 2025, is 14 amended by striking the subsection and inserting in lieu 15 thereof the following: 16 5. “Department” means the department of health and human 17 services. 18 Sec. 28. Section 10A.713, subsection 4, unnumbered 19 paragraph 1, Code 2025, is amended to read as follows: 20 A copy of the application shall be sent to the department 21 of health and human services at the time the application is 22 submitted to the department. The department shall not process 23 applications for and the council shall not an intermediate 24 care facility for persons with an intellectual disability, or 25 consider a new or changed institutional health service for an 26 intermediate care facility for persons with an intellectual 27 disability , unless both of the following conditions are met: 28 Sec. 29. Section 10A.714, subsection 1, unnumbered 29 paragraph 1, Code 2025, is amended to read as follows: 30 In determining whether a certificate of need shall be 31 issued, the department and council shall consider the 32 following: 33 Sec. 30. Section 10A.714, subsection 1, paragraph r, Code 34 2025, is amended to read as follows: 35 -15- LSB 1555SV (3) 91 lh/ko 15/ 41

S.F. 575 r. The recommendations of staff personnel of the department 1 assigned to the area of certificate of need, concerning the 2 application , if requested by the council . 3 Sec. 31. Section 10A.714, subsection 2, unnumbered 4 paragraph 1, Code 2025, is amended to read as follows: 5 In addition to the findings required with respect to any 6 of the criteria listed in subsection 1 of this section , the 7 council department shall grant a certificate of need for a new 8 institutional health service or changed institutional health 9 service only if it the department finds in writing, on the 10 basis of data submitted to it by the department , that: 11 Sec. 32. Section 10A.716, subsection 3, Code 2025, is 12 amended to read as follows: 13 3. Each application accepted by the department shall be 14 formally reviewed for the purpose of furnishing to the council 15 the information necessary to enable it the department to 16 determine whether or not to grant the certificate of need. A 17 formal review shall consist , at a minimum , of the following 18 steps: 19 a. Evaluation of the application against the criteria 20 specified in section 10A.714 135.63 . 21 b. A public hearing on the application, to be held prior to 22 completion of the evaluation required by paragraph “a” , shall be 23 conducted by the council . 24 Sec. 33. Section 10A.719, Code 2025, is amended to read as 25 follows: 26 10A.719 Council Department to make final decision. 27 1. The department shall complete its formal review of 28 the application within ninety days after acceptance of the 29 application, except as otherwise provided by section 10A.722 30 135.71 , subsection 4 . Upon completion of the formal review, 31 the council department shall approve or deny the application. 32 The council department shall issue written findings stating the 33 basis for its decision on the application , and the department 34 shall send copies of the council’s decision and the written 35 -16- LSB 1555SV (3) 91 lh/ko 16/ 41

S.F. 575 findings supporting the decision to the applicant and to any 1 other person who so requests. 2 2. Failure by the council department to issue a written 3 decision on an application for a certificate of need within the 4 time required by this section shall constitute denial of and 5 final administrative action on the application. 6 Sec. 34. Section 10A.720, Code 2025, is amended to read as 7 follows: 8 10A.720 Appeal of certificate of need decisions. 9 The council’s department’s decision on an application for 10 certificate of need, when announced pursuant to section 10A.719 11 135.68 , is shall be a final decision. Any dissatisfied party 12 who is an affected person with respect to the application, 13 and who participated or sought unsuccessfully to participate 14 in the formal review procedure prescribed by section 10A.716 15 135.65 , may request a rehearing in accordance with chapter 17A 16 and rules of the department. If a rehearing is not requested 17 or an affected party remains dissatisfied after the request for 18 rehearing, an appeal may be taken in the manner provided by 19 chapter 17A . Notwithstanding the Iowa administrative procedure 20 Act, chapter 17A , a request for rehearing is not required , 21 prior to appeal under section 17A.19 . 22 Sec. 35. Section 10A.721, Code 2025, is amended to read as 23 follows: 24 10A.721 Period for which certificate is valid —— extension 25 or revocation. 26 1. A certificate of need shall be valid for a maximum of 27 one year from the date of issuance. Upon the expiration of the 28 certificate, or at any earlier time while the certificate is 29 valid , the holder thereof of the certificate shall provide the 30 department such information on the development of the project 31 covered by the certificate as the department may request. 32 The council department shall determine at the end of the 33 certification period whether sufficient progress is being made 34 on the development of the project. The certificate of need may 35 -17- LSB 1555SV (3) 91 lh/ko 17/ 41

S.F. 575 be extended by the council department for additional periods 1 of time as are reasonably necessary to expeditiously complete 2 the project, but may be revoked by the council department at 3 the end of the first or any subsequent certification period for 4 insufficient progress in developing the project. 5 2. Upon expiration of a certificate of need, and prior to 6 extension thereof of the certificate of need , any affected 7 person shall have the right to submit to the department 8 information which may be relevant to the question of granting 9 an extension. The department may call a public hearing for 10 this purpose. 11 Sec. 36. Section 10A.722, unnumbered paragraph 1, Code 12 2025, is amended to read as follows: 13 The department shall adopt , with approval of the council, 14 such administrative rules as are necessary to enable it to 15 implement this part subchapter . These rules shall include: 16 Sec. 37. Section 10A.723, subsection 2, paragraph a, Code 17 2025, 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. 38. Section 68B.35, subsection 2, paragraph e, Code 33 2025, is amended to read as follows: 34 e. Members of the state banking council, the Iowa ethics and 35 -18- LSB 1555SV (3) 91 lh/ko 18/ 41

S.F. 575 campaign disclosure board, the credit union review board, the 1 economic development authority, the employment appeal board, 2 the environmental protection commission, the health facilities 3 council, the Iowa finance authority, the Iowa public employees’ 4 retirement system investment board, the Iowa lottery commission 5 created in section 99G.8 , the natural resource commission, the 6 board of parole, the state racing and gaming commission, the 7 state board of regents, the transportation commission, the 8 office of consumer advocate, the utilities commission, the Iowa 9 telecommunications and technology commission, and any full-time 10 members of other boards and commissions as defined under 11 section 7E.4 who receive an annual salary for their service 12 on the board or commission. The Iowa ethics and campaign 13 disclosure board shall conduct an annual review to determine 14 if members of any other board, commission, or authority should 15 file a statement and shall require the filing of a statement 16 pursuant to rules adopted pursuant to chapter 17A . 17 Sec. 39. Section 97B.1A, subsection 8, paragraph a, 18 subparagraph (8), Code 2025, is amended to read as follows: 19 (8) Members of the state transportation commission , and the 20 board of parole , and the state health facilities council . 21 Sec. 40. CODE EDITOR DIRECTIVE. 22 1. The Code editor is directed to make the following 23 transfers: 24 a. Section 10A.711 to section 135.61. 25 b. Section 10A.713 to section 135.62. 26 c. Section 10A.714 to section 135.63. 27 d. Section 10A.715 to section 135.64. 28 e. Section 10A.716 to section 135.65. 29 f. Section 10A.717 to section 135.66. 30 g. Section 10A.718 to section 135.67. 31 h. Section 10A.719 to section 135.68. 32 i. Section 10A.720 to section 135.69. 33 j. Section 10A.721 to section 135.70. 34 k. Section 10A.722 to section 135.71. 35 -19- LSB 1555SV (3) 91 lh/ko 19/ 41

S.F. 575 l. Section 10A.723 to section 135.72. 1 m. Section 10A.724 to section 135.73. 2 n. Section 10A.725 to section 135.74. 3 o. Section 10A.726 to section 135.75. 4 p. Section 10A.727 to section 135.76. 5 q. Section 10A.728 to section 135.77. 6 r. Section 10A.729 to section 135.78. 7 2. The Code editor is directed to rename and retitle 8 subchapter VI of chapter 135 as HEALTH FACILITIES and include 9 sections 135.61 through 135.78. 10 3. The Code editor shall correct internal references in the 11 Code and in any enacted legislation as is necessary due to the 12 enactment of this division. 13 Sec. 41. REPEAL. Section 10A.712, Code 2025, is repealed. 14 DIVISION IX 15 CONFORMING CHANGES —— ELIMINATION OF THE HEALTH FACILITIES 16 COUNCIL 17 Sec. 42. Section 10A.711, unnumbered paragraph 1, Code 18 2025, is amended to read as follows: 19 As used in this part subchapter , unless the context 20 otherwise requires: 21 Sec. 43. Section 10A.711, subsection 1, paragraph d, Code 22 2025, is amended to read as follows: 23 d. Each institutional health facility or health maintenance 24 organization which, prior to receipt of the application by the 25 department, has formally indicated to the department pursuant 26 to this part subchapter an intent to furnish in the future 27 institutional health services similar to the new institutional 28 health service proposed in the application. 29 Sec. 44. Section 10A.713, subsection 1, Code 2025, is 30 amended to read as follows: 31 1. A new institutional health service or changed 32 institutional health service shall not be offered or developed 33 in this state without prior application to the department 34 for and receipt of a certificate of need, pursuant to this 35 -20- LSB 1555SV (3) 91 lh/ko 20/ 41