Senate Study Bill 1163 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED GOVERNOR BILL) 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 1555XL (10) 91 lh/ko

S.F. _____ H.F. _____ 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 THE PRIMARY CARE PROVIDER LOAN REPAYMENT PROGRAM 16 —— DEPARTMENT OF HEALTH AND HUMAN SERVICES 17 Sec. 3. Section 135.107, subsection 2, Code 2025, is amended 18 to read as follows: 19 2. a. The department shall establish a primary care 20 provider recruitment and retention endeavor , to be known as 21 PRIMECARRE . The endeavor shall include a health care workforce 22 and community support grant program and a primary care provider 23 loan repayment program . The endeavor shall be developed and 24 implemented in a manner to promote and accommodate local 25 creativity in efforts to recruit and retain health care 26 professionals to provide services in the locality. The focus 27 of the endeavor shall be to promote and assist local efforts 28 in developing health care provider recruitment and retention 29 programs. The department may enter into an agreement with the 30 college student aid commission for the administration of the 31 department’s grant and loan repayment programs health care 32 workforce and community support grant program . 33 a. Health care workforce and community support grant program. 34 (1) b. The department shall adopt rules establishing 35 -1- LSB 1555XL (10) 91 lh/ko 1/ 43

S.F. _____ H.F. _____ pursuant to chapter 17A to establish flexible application 1 processes based upon the department’s strategic plan to be used 2 by the department to establish a grant assistance program as 3 provided in this paragraph “a” the health care workforce and 4 community support grant program , and establishing to establish 5 the criteria to be used in evaluating the applications. 6 Selection criteria shall include a method for prioritizing 7 grant applications based on illustrated efforts to meet the 8 health care provider needs of the locality and surrounding 9 area. Such assistance may be in the form of a forgivable loan, 10 grant, or other nonfinancial assistance as deemed appropriate 11 by the department. An application submitted may contain 12 a commitment of matching funds for the grant assistance. 13 Application may be made for assistance by a single community or 14 group of communities or in response to programs recommended in 15 the strategic plan to address health workforce shortages. 16 (2) Grants awarded under the program shall be awarded 17 to rural, underserved areas or special populations as 18 identified by the department’s strategic plan or evidence-based 19 documentation. 20 b. Primary care provider loan repayment program. 21 (1) A primary care provider loan repayment program is 22 established to increase the number of health professionals 23 practicing primary care in federally designated health 24 professional shortage areas of the state. Under the program, 25 loan repayment may be made to a recipient for educational 26 expenses incurred while completing an accredited health 27 education program directly related to obtaining credentials 28 necessary to practice the recipient’s health profession. 29 (2) The department shall adopt rules relating to the 30 establishment and administration of the primary care provider 31 loan repayment program. Rules adopted pursuant to this 32 paragraph shall provide, at a minimum, for all of the 33 following: 34 (a) Determination of eligibility requirements and 35 -2- LSB 1555XL (10) 91 lh/ko 2/ 43

S.F. _____ H.F. _____ qualifications of an applicant to receive loan repayment under 1 the program, including but not limited to years of obligated 2 service, clinical practice requirements, and residency 3 requirements. One year of obligated service shall be provided 4 by the applicant in exchange for each year of loan repayment, 5 unless federal requirements otherwise require. Loan repayment 6 under the program shall not be approved for a health provider 7 whose license or certification is restricted by a medical 8 regulatory authority of any jurisdiction of the United States, 9 other nations, or territories. 10 (b) Identification of federally designated health 11 professional shortage areas of the state and prioritization of 12 such areas according to need. 13 (c) Determination of the amount and duration of the loan 14 repayment an applicant may receive, giving consideration to the 15 availability of funds under the program, and the applicant’s 16 outstanding educational loans and professional credentials. 17 (d) Determination of the conditions of loan repayment 18 applicable to an applicant. 19 (e) Enforcement of the state’s rights under a loan repayment 20 program contract, including the commencement of any court 21 action. 22 (f) Cancellation of a loan repayment program contract for 23 reasonable cause unless federal requirements otherwise require. 24 (g) Participation in federal programs supporting repayment 25 of loans of health care providers and acceptance of gifts, 26 grants, and other aid or amounts from any person, association, 27 foundation, trust, corporation, governmental agency, or other 28 entity for the purposes of the program. 29 (h) Upon availability of state funds, determination of 30 eligibility criteria and qualifications for participating 31 communities and applicants not located in federally designated 32 shortage areas. 33 (i) Other rules as necessary. 34 Sec. 4. Section 135.107, subsection 3, paragraph a, Code 35 -3- LSB 1555XL (10) 91 lh/ko 3/ 43

S.F. _____ H.F. _____ 2025, is amended to read as follows: 1 a. Eligibility under any of the programs health care 2 workforce and community support grant program established under 3 the primary care provider recruitment and retention endeavor 4 shall be based upon a community health services assessment 5 completed under subsection 2 , paragraph “a” . Participation 6 in a community health services assessment process shall be 7 documented by the community or region. 8 Sec. 5. Section 135.107, Code 2025, is amended by adding the 9 following new subsection: 10 NEW SUBSECTION . 4. A health care workforce and community 11 support grant program fund is created in the state treasury 12 under the control of the department of health and human 13 services. All moneys deposited or paid into the fund are 14 appropriated to the department to be used for grant assistance 15 as provided in this section. Notwithstanding section 8.33, 16 moneys in the fund that remain unencumbered or unobligated at 17 the close of each fiscal year shall not revert but shall remain 18 available for expenditure. Notwithstanding section 12C.7, 19 subsection 2, interest or earnings on moneys in the fund shall 20 be credited to the fund. 21 Sec. 6. TRANSITION PROVISIONS —— ACCOUNT. 22 1. The department of health and human services shall make 23 loan repayments pursuant to a loan repayment program contract 24 entered into on or before June 30, 2025, by a recipient and 25 the department under the primary care provider loan repayment 26 program in section 135.107, Code 2025, if the recipient remains 27 in compliance with all obligations under the loan repayment 28 program contract. 29 2. a. The department of health and human services shall 30 create an account for deposit of any moneys encumbered or 31 obligated pursuant to a loan repayment program contract 32 entered into on or before June 30, 2025, by a recipient and 33 the department under the primary care provider loan repayment 34 program in section 135.107, Code 2025. The department shall 35 -4- LSB 1555XL (10) 91 lh/ko 4/ 43

S.F. _____ H.F. _____ ensure that the encumbered and obligated moneys remain 1 available for the duration of the loan repayment program 2 contract if the recipient remains in compliance with all 3 obligations under the loan repayment program contract. 4 b. Notwithstanding section 8.33, any balance in the account 5 shall not revert but shall remain available for the duration of 6 such loan repayment program contracts. Notwithstanding section 7 12C.7, subsection 2, interest or earnings on moneys deposited 8 in the account shall be credited to the account. 9 c. Upon expiration of all loan repayment program contract 10 periods and the expenditure of all moneys encumbered and 11 obligated under such loan repayment contracts, any unencumbered 12 or unobligated moneys remaining in the account created under 13 this section shall be deposited in the health care professional 14 incentive program fund created in section 256.222, as enacted 15 by this Act. 16 DIVISION III 17 ELIMINATION OF HEALTH CARE-RELATED LOAN REPAYMENT AND FINANCIAL 18 AWARD PROGRAMS —— COLLEGE STUDENT AID COMMISSION 19 Sec. 7. REPEAL. Sections 256.221, 256.223, 256.224, and 20 256.225, Code 2025, are repealed. 21 Sec. 8. TRANSITION PROVISIONS. 22 1. The college student aid commission shall make loan 23 repayments pursuant to a program agreement entered into on or 24 before June 30, 2025, by an eligible student and the commission 25 under the rural Iowa primary care loan repayment program 26 in section 256.221, Code 2025, if the student remains in 27 compliance with all obligations under the program agreement. 28 2. The college student aid commission shall make loan 29 repayments pursuant to a contract entered into on or before 30 June 30, 2025, by a health care professional and the commission 31 under the health care professional recruitment program in 32 section 256.223, Code 2025, if the health care professional 33 remains in compliance with all obligations under the contract. 34 3. The college student aid commission shall provide the 35 -5- LSB 1555XL (10) 91 lh/ko 5/ 43

S.F. _____ H.F. _____ annual award to a recipient selected on or before June 30, 1 2025, for an award under the health care award program in 2 section 256.224, Code 2025. 3 4. The college student aid commission shall make loan 4 repayments pursuant to a program agreement entered into on or 5 before June 30, 2025, by a mental health professional and the 6 commission under the mental health professional loan repayment 7 program in section 256.225, Code 2025, if the mental health 8 professional remains in compliance with all obligations under 9 the program agreement. 10 Sec. 9. TRANSFER OF MONEYS. On the effective date of this 11 division of this Act, any unencumbered and unobligated moneys 12 remaining in the following funds shall be transferred to the 13 health care professional incentive program fund created in 14 section 256.222, as enacted in this Act: 15 1. The rural Iowa primary care trust fund created in section 16 256.221, subsection 12, Code 2025. 17 2. The health care professional recruitment fund created in 18 section 256.223, subsection 4, Code 2025. 19 3. The health care award fund created in section 256.224, 20 subsection 6, Code 2025. 21 4. The mental health professional loan repayment fund 22 created in section 256.225, subsection 7, Code 2025. 23 Sec. 10. TRANSITION —— ACCOUNTS. 24 1. The department of health and human services shall create 25 individual accounts for the deposit of any moneys encumbered or 26 obligated relating to a loan repayment or award funded under 27 each of the following programs: 28 a. The rural Iowa primary care loan repayment program under 29 section 256.221, Code 2025. 30 b. The health care professional recruitment program under 31 section 256.223, Code 2025. 32 c. The health care award program under section 256.224, Code 33 2025. 34 d. The mental health professional loan repayment program 35 -6- LSB 1555XL (10) 91 lh/ko 6/ 43

S.F. _____ H.F. _____ under section 256.225, Code 2025. 1 2. Notwithstanding section 8.33, any balance in any of 2 the accounts created under subsection 1 shall not revert but 3 shall remain available for the duration of all applicable 4 loan repayments and awards. Notwithstanding section 12C.7, 5 subsection 2, interest or earnings on moneys deposited in each 6 account shall be credited to the respective account. 7 3. Upon expiration of all program agreement, contract, 8 and award disbursement periods and the expenditure of all 9 moneys encumbered and obligated under such program agreements, 10 contracts, and awards, any unencumbered or unobligated moneys 11 remaining in the accounts created under this section shall be 12 deposited in the health care professional incentive program 13 fund created in section 256.222, as enacted by this Act. 14 DIVISION IV 15 HEALTH CARE PROFESSIONAL INCENTIVE PROGRAM ESTABLISHED 16 Sec. 11. Section 135.107, subsection 1, Code 2025, is 17 amended by adding the following new paragraph: 18 NEW PARAGRAPH . f. Coordinate with the college student aid 19 commission to administer the health care professional incentive 20 program established in section 256.222. 21 Sec. 12. NEW SECTION . 256.222 Health care professional 22 incentive program —— fund. 23 1. Definitions. For purposes of this section, unless the 24 context otherwise requires: 25 a. “Award” means either of the following: 26 (1) A loan repayment made on behalf of an eligible health 27 care professional on the total amount owed, including principal 28 and interest, by the eligible health care professional on any 29 of the following: 30 (a) A federally guaranteed Stafford loan under the federal 31 family education loan program or the federal direct loan 32 program. 33 (b) A federal grad plus loan. 34 (c) A consolidated federally guaranteed Stafford loan under 35 -7- LSB 1555XL (10) 91 lh/ko 7/ 43

S.F. _____ H.F. _____ the federal family education loan program or the federal direct 1 loan program. 2 (d) A consolidated federal grad plus loan. 3 (2) An income bonus paid to an eligible health care 4 professional. 5 b. “Commission” means the college student aid commission. 6 c. “Department” means the department of health and human 7 services. 8 d. “Eligible health care profession” means health care 9 occupational categories that are in high demand, as determined 10 and maintained on a list by the department, and may include but 11 are not limited to physicians, physician assistants, registered 12 nurses, nurse practitioners, nurse educators, and mental health 13 professionals. 14 e. “Eligible health care professional” means an individual 15 currently employed, or who will be employed, in an eligible 16 health care profession that is located in an eligible practice 17 area. 18 f. “Eligible practice area” means a geographic region 19 or county in this state that has a shortage of health care 20 professionals as determined by the department. 21 g. “Employment obligation” means the number of consecutive 22 years an eligible health care professional must practice. 23 (1) If practicing full-time, which means two thousand 24 eighty hours of work in a calendar year, including all paid 25 holidays, vacations, sick time, and other paid leave, an 26 eligible health care professional must practice for five years. 27 (2) If practicing part-time, which means one thousand five 28 hundred sixty hours of work in a calendar year, including all 29 paid holidays, vacations, sick time, and other paid leave, 30 an eligible health care professional must practice for seven 31 years. 32 h. “Program” means the health care professional incentive 33 program established in this section. 34 2. Program established. The health care professional 35 -8- LSB 1555XL (10) 91 lh/ko 8/ 43

S.F. _____ H.F. _____ incentive program is established and shall be administered 1 by the commission, in coordination with the department, for 2 the purpose of offering awards to recruit and retain eligible 3 health care professionals for employment in eligible practice 4 areas. For the fiscal year beginning July 1, 2025, and 5 each fiscal year thereafter, the commission, in coordination 6 with the department, shall determine the number of awards 7 available for each eligible health care profession prior to the 8 commencement of the fiscal year. 9 3. Legislative intent. It is the intent of the general 10 assembly that the program shall not interfere with local 11 community investments to recruit and retain health care 12 professionals. 13 4. Exceptions. An eligible health care professional shall 14 be ineligible for the program if the eligible health care 15 professional is currently participating in, or has participated 16 in, any of the following: 17 a. The primary care provider loan repayment program pursuant 18 to section 135.107, Code 2025. 19 b. The rural Iowa primary care loan repayment program 20 pursuant to section 256.221, Code 2025. 21 c. The health care professional recruitment program pursuant 22 to section 256.223, Code 2025. 23 d. The health care award program pursuant to section 24 256.224, Code 2025. 25 e. The mental health professional loan repayment program 26 pursuant to section 256.225, Code 2025. 27 5. Program requirements. 28 a. An eligible health care professional may submit an 29 application for the program to the commission in the form and 30 manner prescribed by the commission. The applicant shall 31 elect to receive an award as either a loan repayment or an 32 income bonus if selected for the program, and shall submit any 33 additional information requested by the commission. 34 b. If selected for an award, the eligible health care 35 -9- LSB 1555XL (10) 91 lh/ko 9/ 43

S.F. _____ H.F. _____ professional and the commission shall execute a program 1 agreement that specifies all of the following: 2 (1) The date the eligible health care professional’s 3 employment obligation begins, which shall be no later than six 4 months from the date the program agreement is executed. 5 (2) The date the health care professional’s employment 6 obligation terminates. 7 (3) Whether the award is a loan repayment or an income 8 bonus, and the terms and conditions related to the award, 9 including the aggregate award amount that the eligible health 10 care professional will receive. 11 (4) Requirements regarding the eligible health care 12 professional’s license to practice in this state while 13 participating in the program. 14 (5) All other terms and conditions agreed to by the eligible 15 health care professional and the commission. 16 6. Awards. 17 a. Upon verifying the eligible health care professional is 18 in compliance with all terms of the program agreement executed 19 pursuant to subsection 5, paragraph “b” , the commission shall 20 pay the eligible health care professional’s award annually as 21 follows: 22 (1) For a full-time employment obligation, the award shall 23 be paid as follows: 24 (a) An amount equal to twenty percent of the aggregate award 25 shall be paid to the eligible health care professional after 26 the completion of the first year of the eligible health care 27 professional’s employment obligation. 28 (b) An amount equal to fifteen percent of the aggregate 29 award shall be paid to the eligible health care professional 30 after the completion of the second year, the third year, and 31 the fourth year of the eligible health care professional’s 32 employment obligation. 33 (c) An amount equal to thirty-five percent of the aggregate 34 award shall be paid to the eligible health care professional 35 -10- LSB 1555XL (10) 91 lh/ko 10/ 43

S.F. _____ H.F. _____ after the completion of the fifth year of the eligible health 1 care professional’s employment obligation. 2 (2) For a part-time employment obligation, the aggregate 3 award shall be prorated by the commission. 4 b. A minimum of every five years, and each time the 5 department adds a new eligible health care profession, 6 the commission, in consultation with the department, shall 7 establish the aggregate award amount for each eligible health 8 care profession. The aggregate award amount shall not exceed 9 two hundred thousand dollars. 10 c. An individual who entered into a program agreement under 11 subsection 5, paragraph “b” , before the date on which the 12 department determined the individual’s health care profession 13 is no longer an eligible health care profession, shall remain 14 eligible for the program per the terms of the individual’s 15 program agreement. 16 7. Health care professional incentive program fund. A 17 health care professional incentive program fund is created in 18 the state treasury under the control of the commission. All 19 moneys deposited or paid into the fund are appropriated to the 20 commission to be used for awards as provided in this section. 21 Notwithstanding section 8.33, moneys in the fund that remain 22 unencumbered or unobligated at the close of each fiscal year 23 shall not revert but shall remain available for expenditure. 24 Notwithstanding section 12C.7, subsection 2, interest or 25 earnings on moneys in the fund shall be credited to the fund 26 and may be utilized by the commission for administrative costs. 27 8. Rules. The commission, in coordination with the 28 department, shall adopt rules pursuant to chapter 17A to 29 administer this section. 30 Sec. 13. EFFECTIVE DATE. This division of this Act, being 31 deemed of immediate importance, takes effect upon enactment. 32 DIVISION V 33 ELIMINATION OF HEALTH CARE-RELATED GRANT, RESIDENCY, AND 34 FELLOWSHIP PROGRAMS —— DEPARTMENT OF HEALTH AND HUMAN SERVICES 35 -11- LSB 1555XL (10) 91 lh/ko 11/ 43

S.F. _____ H.F. _____ Sec. 14. Section 135.179, subsection 2, Code 2025, is 1 amended to read as follows: 2 2. Funding for the program may be provided through the 3 health care workforce shortage fund or the fulfilling Iowa’s 4 need for dentists matching grant program account created in 5 section 135.175 . The purpose of the program is to establish, 6 expand, or support the placement of dentists in dental or rural 7 shortage areas across the state by providing education loan 8 repayments. 9 Sec. 15. Section 249M.4, subsection 2, Code 2025, is amended 10 to read as follows: 11 2. Moneys in the trust fund shall be used, subject to 12 their appropriation by the general assembly, by the department 13 to reimburse participating hospitals the medical assistance 14 program upper payment limit for inpatient and outpatient 15 hospital services as calculated in this section . Following 16 payment of such upper payment limit to participating hospitals, 17 any remaining funds in the trust fund on an annual basis may be 18 used for any of the following purposes: 19 a. To support medical assistance program utilization 20 shortfalls. 21 b. To maintain the state’s capacity to provide access to and 22 delivery of services for vulnerable Iowans. 23 c. To fund the health care workforce support initiative 24 created pursuant to section 135.175 . 25 d. c. To support access to health care services for 26 uninsured Iowans. 27 e. d. To support Iowa hospital programs and services which 28 expand access to health care services for Iowans. 29 Sec. 16. REPEAL. Sections 135.175, 135.176, 135.178, and 30 135.193, Code 2025, are repealed. 31 Sec. 17. APPROPRIATION —— PSYCHIATRIC RESIDENCIES. There 32 is appropriated from the general fund of the state to the 33 department of health and human services for the following 34 fiscal years, the following amounts, or so much thereof as is 35 -12- LSB 1555XL (10) 91 lh/ko 12/ 43

S.F. _____ H.F. _____ necessary, for deposit in the account for rural psychiatric 1 residencies created in this division of this Act: 2 FY 2025-2026: 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 600,000 4 FY 2026-2027: 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 400,000 6 FY 2027-2028: 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 200,000 8 Sec. 18. TRANSITION PROVISIONS. 9 1. a. The department of health and human services shall 10 provide matching state funding to a sponsor awarded on or 11 before June 30, 2025, under the medical residency training 12 state matching grants program in section 135.176, Code 2025, 13 until all residents in the funded residencies have completed or 14 left the program. 15 b. The department of health and human services shall provide 16 matching state funding to a sponsor for medical residency 17 training program liability costs awarded on or before June 18 30, 2025, under the medical residency training state matching 19 grants program in section 135.176, Code 2025, until June 30, 20 2026. 21 2. The department of health and human services shall provide 22 matching state funding to a sponsor awarded on or before June 23 30, 2025, under the nurse residency state matching grants 24 program in section 135.178, Code 2025, until all residents have 25 completed or left the nurse residency programs. 26 3. The department of health and human services shall fund 27 a fellowship position pursuant to a program agreement entered 28 into on or before June 30, 2025, by a participating teaching 29 hospital and a participating fellow under the state-funded 30 family medicine obstetrics fellowship program in section 31 135.193, Code 2025, if the participating fellow remains in 32 compliance with all obligations under the program agreement. 33 4. The department of health and human services shall fund 34 a rural psychiatric residency for a resident selected on or 35 -13- LSB 1555XL (10) 91 lh/ko 13/ 43

S.F. _____ H.F. _____ before June 30, 2025, until all residents have completed 1 or left the rural psychiatric residencies, pursuant to 2 appropriations as provided in the following: 3 a. 2024 Iowa Acts, chapter 1157, section 5, subsection 3, 4 and 2024 Iowa Acts, chapter 1157, section 22, subsection 5. 5 b. 2023 Iowa Acts, chapter 112, section 5, subsection 4, 6 paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 7 section 29. 8 c. 2022 Iowa Acts, chapter 1131, section 3, subsection 4, 9 paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 10 section 23. 11 d. 2021 Iowa Acts, chapter 182, section 3, subsection 4, 12 paragraph “j”. 13 e. 2019 Iowa Acts, chapter 85, section 3, subsection 4, 14 paragraph “j”, as amended by 2020 Iowa Acts, chapter 1121, 15 section 19. 16 Sec. 19. TRANSFER OF MONEYS. Notwithstanding section 8.33 17 or any other provision to the contrary, any unobligated or 18 unencumbered moneys in any of the following accounts or funds 19 or constituting any specified appropriation, shall not revert 20 but are appropriated to the department of health and human 21 services to fund Medicaid graduate medical education efforts. 22 1. The health care workforce shortage fund created in 23 section 135.175, subsection 1, paragraph “b”, Code 2025. 24 2. The medical residency training account created in 25 section 135.175, subsection 5, paragraph “a”, Code 2025. 26 3. The nurse residency state matching grants program 27 account created in section 135.175, subsection 5, paragraph 28 “b”, Code 2025. 29 4. The health care workforce shortage national initiatives 30 account created in section 135.175, subsection 5, paragraph 31 “c”, Code 2025. 32 5. The fulfilling Iowa’s need for dentists matching grant 33 program account created in section 135.175, subsection 5, 34 paragraph “d”, Code 2025. 35 -14- LSB 1555XL (10) 91 lh/ko 14/ 43

S.F. _____ H.F. _____ 6. The family medicine obstetrics fellowship program fund 1 created in section 135.193, Code 2025. 2 7. Moneys appropriated to the department of health and human 3 services for rural psychiatric residencies to fund psychiatric 4 residents to provide mental health services in underserved 5 areas of the state as described in the following: 6 a. 2024 Iowa Acts, chapter 1157, section 5, subsection 3, 7 and 2024 Iowa Acts, chapter 1157, section 22, subsection 5. 8 b. 2023 Iowa Acts, chapter 112, section 5, subsection 4, 9 paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 10 section 29. 11 c. 2022 Iowa Acts, chapter 1131, section 3, subsection 4, 12 paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 13 section 23. 14 d. 2021 Iowa Acts, chapter 182, section 3, subsection 4, 15 paragraph “j”. 16 e. 2019 Iowa Acts, chapter 85, section 3, subsection 4, 17 paragraph “j”, as amended by 2020 Iowa Acts, chapter 1121, 18 section 19. 19 Sec. 20. TRANSITION —— ACCOUNTS. 20 1. The department of health and human services shall create 21 individual accounts for the deposit of any moneys encumbered 22 or obligated relating to a grant awarded, or residency or 23 fellowship funded, under each of the following programs: 24 a. The medical residency training state matching grants 25 program under section 135.176, Code 2025. 26 b. The nurse residency state matching grants program under 27 section 135.178, Code 2025. 28 c. The state-funded family medicine obstetrics fellowship 29 program under section 135.193, Code 2025. 30 d. Rural psychiatric residencies as described in the 31 following: 32 (1) 2024 Iowa Acts, chapter 1157, section 5, subsection 3, 33 and 2024 Iowa Acts, chapter 1157, section 22, subsection 5. 34 (2) 2023 Iowa Acts, chapter 112, section 5, subsection 4, 35 -15- LSB 1555XL (10) 91 lh/ko 15/ 43

S.F. _____ H.F. _____ paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 1 section 29. 2 (3) 2022 Iowa Acts, chapter 1131, section 3, subsection 3 4, paragraph “j”, as amended by 2024 Iowa Acts, chapter 1157, 4 section 23. 5 (4) 2021 Iowa Acts, chapter 182, section 3, subsection 4, 6 paragraph “j”. 7 (5) 2019 Iowa Acts, chapter 85, section 3, subsection 4, 8 paragraph “j”, as amended by 2020 Iowa Acts, chapter 1121, 9 section 19. 10 2. Notwithstanding section 8.33, any balance in any of the 11 accounts created under subsection 1 shall not revert but shall 12 remain available for the duration of all applicable grants, 13 residencies, and fellowships. 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 grant, residency, and fellowship 17 periods and the expenditure of all moneys encumbered under 18 such grants, residencies, and fellowships, any unencumbered or 19 unobligated moneys remaining in any of the accounts created 20 under subsection 1 are appropriated to the department of health 21 and human services for Medicaid graduate medical education 22 efforts. 23 DIVISION VI 24 ELIMINATION OF THE STATE-FUNDED PSYCHIATRY RESIDENCY AND 25 FELLOWSHIP POSITIONS —— UNIVERSITY OF IOWA HOSPITALS AND 26 CLINICS 27 Sec. 21. REPEAL. Section 135.180, Code 2025, is repealed. 28 Sec. 22. TRANSITION PROVISIONS. The board of regents 29 shall direct the university of Iowa hospitals and clinics to 30 distribute moneys for state-funded psychiatry residency and 31 fellowship positions approved and awarded on or before June 32 30, 2025, under the state-funded psychiatry residency and 33 fellowship positions in section 135.180, Code 2025, until all 34 residents and fellows have completed or left the state-funded 35 -16- LSB 1555XL (10) 91 lh/ko 16/ 43

S.F. _____ H.F. _____ psychiatry residency or fellowship positions. 1 Sec. 23. TRANSITION —— ACCOUNT. 2 1. The board of regents shall direct the university of Iowa 3 hospitals and clinics to create an account for the deposit 4 of moneys encumbered or obligated relating to residency and 5 fellowship positions funded under the state-funded psychiatry 6 residency and fellowship positions under section 135.180, Code 7 2025. 8 2. Notwithstanding section 8.33, any balance in the account 9 created under subsection 1 shall not revert but shall remain 10 available for the duration of all applicable residencies and 11 fellowships. Notwithstanding section 12C.7, subsection 2, 12 interest or earnings on moneys deposited in the account shall 13 be credited to the account. 14 3. Upon expiration of all residency and fellowship periods 15 and the expenditure of all moneys encumbered under such 16 residencies and fellowships, any unencumbered or unobligated 17 moneys remaining in the account created under subsection 1 are 18 appropriated to the department of health and human services for 19 Medicaid graduate medical education efforts. 20 Sec. 24. TRANSFER OF MONEYS. Notwithstanding section 8.33 21 or any other provision to the contrary, any unobligated or 22 unencumbered moneys in the psychiatry residency and fellowship 23 positions fund created in section 135.180, Code 2025, shall 24 not revert but are appropriated to the department of health 25 and human services to fund Medicaid graduate medical education 26 efforts. 27 DIVISION VII 28 ELIMINATION OF THE HEALTH FACILITIES COUNCIL 29 Sec. 25. Section 10A.711, subsection 5, Code 2025, is 30 amended by striking the subsection and inserting in lieu 31 thereof the following: 32 5. “Department” means the department of inspections, 33 appeals, and licensing. 34 Sec. 26. Section 10A.713, subsection 4, unnumbered 35 -17- LSB 1555XL (10) 91 lh/ko 17/ 43

S.F. _____ H.F. _____ paragraph 1, Code 2025, is amended to read as follows: 1 A copy of the application shall be sent to the department 2 of health and human services at the time the application is 3 submitted to the department. The department shall not process 4 applications for and the council shall not an intermediate 5 care facility for persons with an intellectual disability, or 6 consider a new or changed institutional health service for an 7 intermediate care facility for persons with an intellectual 8 disability , unless both of the following conditions are met: 9 Sec. 27. Section 10A.714, subsection 1, unnumbered 10 paragraph 1, Code 2025, is amended to read as follows: 11 In determining whether a certificate of need shall be 12 issued, the department and council shall consider the 13 following: 14 Sec. 28. Section 10A.714, subsection 1, paragraph r, Code 15 2025, is amended to read as follows: 16 r. The recommendations of staff personnel of the department 17 assigned to the area of certificate of need, concerning the 18 application , if requested by the council . 19 Sec. 29. Section 10A.714, subsection 2, unnumbered 20 paragraph 1, Code 2025, is amended to read as follows: 21 In addition to the findings required with respect to any 22 of the criteria listed in subsection 1 of this section , the 23 council department shall grant a certificate of need for a new 24 institutional health service or changed institutional health 25 service only if it the department finds in writing, on the 26 basis of data submitted to it by the department , that: 27 Sec. 30. Section 10A.716, subsection 3, Code 2025, is 28 amended to read as follows: 29 3. Each application accepted by the department shall be 30 formally reviewed for the purpose of furnishing to the council 31 the information necessary to enable it the department to 32 determine whether or not to grant the certificate of need. A 33 formal review shall consist , at a minimum , of the following 34 steps: 35 -18- LSB 1555XL (10) 91 lh/ko 18/ 43

S.F. _____ H.F. _____ a. Evaluation of the application against the criteria 1 specified in section 10A.714 135.63 . 2 b. A public hearing on the application, to be held prior to 3 completion of the evaluation required by paragraph “a” , shall be 4 conducted by the council . 5 Sec. 31. Section 10A.719, Code 2025, is amended to read as 6 follows: 7 10A.719 Council Department to make final decision. 8 1. The department shall complete its formal review of 9 the application within ninety days after acceptance of the 10 application, except as otherwise provided by section 10A.722 11 135.71 , subsection 4 . Upon completion of the formal review, 12 the council department shall approve or deny the application. 13 The council department shall issue written findings stating the 14 basis for its decision on the application , and the department 15 shall send copies of the council’s decision and the written 16 findings supporting the decision to the applicant and to any 17 other person who so requests. 18 2. Failure by the council department to issue a written 19 decision on an application for a certificate of need within the 20 time required by this section shall constitute denial of and 21 final administrative action on the application. 22 Sec. 32. Section 10A.720, Code 2025, is amended to read as 23 follows: 24 10A.720 Appeal of certificate of need decisions. 25 The council’s department’s decision on an application for 26 certificate of need, when announced pursuant to section 10A.719 27 135.68 , is shall be a final decision. Any dissatisfied party 28 who is an affected person with respect to the application, 29 and who participated or sought unsuccessfully to participate 30 in the formal review procedure prescribed by section 10A.716 31 135.65 , may request a rehearing in accordance with chapter 17A 32 and rules of the department. If a rehearing is not requested 33 or an affected party remains dissatisfied after the request for 34 rehearing, an appeal may be taken in the manner provided by 35 -19- LSB 1555XL (10) 91 lh/ko 19/ 43