Senate File 75 - Reprinted SENATE FILE 75 BY REICHMAN (As Amended and Passed by the Senate February 16, 2023 ) A BILL FOR An Act relating to certain health facilities including 1 ambulatory surgical centers and rural emergency hospitals, 2 including licensing requirements and fees, providing 3 penalties and making penalties applicable, providing 4 emergency rulemaking authority, and including applicability 5 and effective date provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 SF 75 (7) 90 pf/rh/mb

S.F. 75 DIVISION I 1 RURAL EMERGENCY HOSPITALS 2 Section 1. Section 135B.1, Code 2023, is amended by adding 3 the following new subsections: 4 NEW SUBSECTION . 5. “Rural emergency hospital” means a 5 facility that provides rural emergency hospital services in 6 the facility twenty-four hours per day, seven days per week; 7 does not provide any acute care inpatient services with the 8 exception of any distinct part of the facility licensed as a 9 skilled nursing facility providing posthospital extended care 10 services; and meets the criteria specified in section 135B.1A 11 and the federal Consolidated Appropriations Act, Pub. L. No. 12 116-260, §125. 13 NEW SUBSECTION . 6. “Rural emergency hospital services” 14 means the following services provided by a rural emergency 15 hospital that do not exceed an annual per patient average of 16 twenty-four hours in such a rural emergency hospital: 17 a. Emergency department services and observation care. 18 For purposes of providing emergency department services, an 19 emergency department of a rural emergency hospital shall be 20 considered staffed if a physician, advanced registered nurse 21 practitioner, or physician assistant is available to furnish 22 rural emergency hospital services in the facility twenty-four 23 hours per day. 24 b. At the election of the rural emergency hospital, with 25 respect to services furnished on an outpatient basis, other 26 medical and health services as specified in regulations adopted 27 by the United States secretary of health and human services. 28 Sec. 2. Section 135B.2, Code 2023, is amended to read as 29 follows: 30 135B.2 Purpose. 31 The purpose of this chapter is to provide for the 32 development, establishment and enforcement of basic standards 33 for the care and treatment of individuals in hospitals and 34 rural emergency hospitals and for the construction, maintenance 35 -1- SF 75 (7) 90 pf/rh/mb 1/ 14

S.F. 75 and operation of such hospitals, which, in the light of 1 existing knowledge, will promote safe and adequate treatment 2 of such individuals in such hospitals, in the interest of the 3 health, welfare and safety of the public. 4 Sec. 3. Section 135B.3, Code 2023, is amended to read as 5 follows: 6 135B.3 Licensure. 7 No person or governmental unit, acting severally or jointly 8 with any other person or governmental unit shall establish, 9 conduct or maintain a hospital or rural emergency hospital in 10 this state without a license. 11 Sec. 4. NEW SECTION . 135B.3A Rural emergency hospital 12 licensure. 13 1. The department shall adopt rules pursuant to chapter 14 17A to establish minimum standards for the licensure of rural 15 emergency hospitals consistent with the federal Consolidated 16 Appropriations Act, Pub. L. No. 116-260, §125, and with 17 regulations issued by the United States secretary of health and 18 human services for rural emergency hospitals. 19 2. To be eligible for a rural emergency hospital license, a 20 facility shall have been, on or before December 27, 2020, one 21 of the following: 22 a. A licensed critical access hospital. 23 b. A general hospital with not more than fifty licensed 24 beds located in a county in a rural area as defined in section 25 1886(d)(2)(D) of the federal Social Security Act. 26 c. A general hospital with no more than fifty licensed beds 27 that is deemed as being located in a rural area pursuant to 28 section 1886(d)(8)(E) of the federal Social Security Act. 29 Sec. 5. Section 135B.4, Code 2023, is amended to read as 30 follows: 31 135B.4 Application for license. 32 Licenses shall be obtained from the department. 33 Applications shall be upon forms and shall contain information 34 as the department may reasonably require, which may include 35 -2- SF 75 (7) 90 pf/rh/mb 2/ 14

S.F. 75 affirmative evidence of ability to comply with reasonable 1 standards and rules prescribed under this chapter . Each 2 application for license shall be accompanied by the license 3 fee, which shall be refunded to the applicant if the license 4 is denied and which shall be deposited into the state treasury 5 and credited to the general fund if the license is issued. 6 Hospitals and rural emergency hospitals having fifty beds or 7 less shall pay an initial license fee of fifteen dollars; 8 hospitals of more than fifty beds and not more than one hundred 9 beds shall pay an initial license fee of twenty-five dollars; 10 all other hospitals shall pay an initial license fee of fifty 11 dollars. 12 Sec. 6. Section 135B.5, subsection 1, Code 2023, is amended 13 to read as follows: 14 1. Upon receipt of an application for license and the 15 license fee, the department shall issue a license if the 16 applicant and hospital facilities comply with this chapter , 17 chapter 135 , and the rules of the department. Each licensee 18 shall receive annual reapproval upon payment of five hundred 19 dollars and upon filing of an application form which is 20 available from the department. The annual licensure fee shall 21 be dedicated to support and provide educational programs on 22 regulatory issues for hospitals and rural emergency hospitals 23 licensed under this chapter . Licenses shall be either general 24 or restricted in form. Each license shall be issued only 25 for the premises and persons or governmental units named in 26 the application and is not transferable or assignable except 27 with the written approval of the department. Licenses shall 28 be posted in a conspicuous place on the licensed premises as 29 prescribed by rule of the department. 30 Sec. 7. Section 135B.5A, Code 2023, is amended to read as 31 follows: 32 135B.5A Conversion of a hospital relative to certain 33 hospitals . 34 1. A conversion of a long-term acute care hospital, 35 -3- SF 75 (7) 90 pf/rh/mb 3/ 14

S.F. 75 rehabilitation hospital, or psychiatric hospital as defined by 1 federal regulations to a general hospital or to a specialty 2 hospital of a different type is a permanent change in bed 3 capacity and shall require a certificate of need pursuant to 4 section 135.63 . 5 2. A conversion of a critical access hospital or general 6 hospital to a rural emergency hospital shall not require a 7 certificate of need pursuant to section 135.63. 8 Sec. 8. Section 135B.7, Code 2023, is amended to read as 9 follows: 10 135B.7 Rules and enforcement. 11 1. a. The department, with the approval of the state 12 board of health, shall adopt rules setting out the standards 13 for the different types of hospitals and for rural emergency 14 hospitals to be licensed under this chapter . The department 15 shall enforce the rules. 16 b. Rules or standards shall not be adopted or enforced 17 which would have the effect of denying a license to a hospital , 18 rural emergency hospital, or other institution required to be 19 licensed, solely by reason of the school or system of practice 20 employed or permitted to be employed by physicians in the 21 hospital, rural emergency hospital, or other institution if the 22 school or system of practice is recognized by the laws of this 23 state. 24 2. a. The rules shall state that a hospital or rural 25 emergency hospital shall not deny clinical privileges to 26 physicians and surgeons, podiatric physicians, osteopathic 27 physicians and surgeons, dentists, certified health service 28 providers in psychology, physician assistants, or advanced 29 registered nurse practitioners licensed under chapter 148 , 30 148C , 149 , 152 , or 153 , or section 154B.7 , solely by reason of 31 the license held by the practitioner or solely by reason of 32 the school or institution in which the practitioner received 33 medical schooling or postgraduate training if the medical 34 schooling or postgraduate training was accredited by an 35 -4- SF 75 (7) 90 pf/rh/mb 4/ 14

S.F. 75 organization recognized by the council on higher education 1 accreditation or an accrediting group recognized by the United 2 States department of education. 3 b. A hospital or rural emergency hospital may establish 4 procedures for interaction between a patient and a 5 practitioner. The rules shall not prohibit a hospital or 6 rural emergency hospital from limiting, restricting, or 7 revoking clinical privileges of a practitioner for violation 8 of hospital rules, regulations, or procedures established 9 under this paragraph, when applied in good faith and in a 10 nondiscriminatory manner. 11 c. This subsection shall not require a hospital or rural 12 emergency hospital to expand the hospital’s current scope of 13 service delivery solely to offer the services of a class of 14 providers not currently providing services at the hospital 15 or rural emergency hospital . This section shall not be 16 construed to require a hospital or rural emergency hospital 17 to establish rules which are inconsistent with the scope of 18 practice established for licensure of practitioners to whom 19 this subsection applies. 20 d. This section shall not be construed to authorize the 21 denial of clinical privileges to a practitioner or class of 22 practitioners solely because a hospital or rural emergency 23 hospital has as employees of the hospital or rural emergency 24 hospital identically licensed practitioners providing the same 25 or similar services. 26 3. The rules shall require that a hospital or rural 27 emergency hospital establish and implement written criteria 28 for the granting of clinical privileges. The written criteria 29 shall include but are not limited to consideration of all of 30 the following: 31 a. The ability of an applicant for privileges to provide 32 patient care services independently and appropriately in the 33 hospital or rural emergency hospital . 34 b. The license held by the applicant to practice. 35 -5- SF 75 (7) 90 pf/rh/mb 5/ 14

S.F. 75 c. The training, experience, and competence of the 1 applicant. 2 d. The relationship between the applicant’s request for the 3 granting of privileges and the hospital’s or rural emergency 4 hospital’s current scope of patient care services, as well as 5 the hospital’s or rural emergency hospital’s determination of 6 the necessity to grant privileges to a practitioner authorized 7 to provide comprehensive, appropriate, and cost-effective 8 services. 9 4. The department shall also adopt rules requiring 10 hospitals and rural emergency hospitals to establish and 11 implement protocols for responding to the needs of patients who 12 are victims of domestic abuse, as defined in section 236.2 . 13 5. The department shall also adopt rules requiring 14 hospitals and rural emergency hospitals to establish and 15 implement protocols for responding to the needs of patients who 16 are victims of elder abuse, as defined in section 235F.1 . 17 Sec. 9. Section 135B.7A, Code 2023, is amended to read as 18 follows: 19 135B.7A Procedures —— orders. 20 The department shall adopt rules that require hospitals 21 and rural emergency hospitals to establish procedures for 22 authentication of all verbal orders by a practitioner within 23 a period not to exceed thirty days following a patient’s 24 discharge. 25 Sec. 10. Section 135B.8, Code 2023, is amended to read as 26 follows: 27 135B.8 Effective date of rules. 28 Any hospital or rural emergency hospital which is in 29 operation at the time of promulgation of any applicable 30 rules or minimum standards under this chapter shall be given 31 a reasonable time, not to exceed one year from the date of 32 such promulgation, within which to comply with such rules and 33 minimum standards. 34 Sec. 11. Section 135B.9, Code 2023, is amended to read as 35 -6- SF 75 (7) 90 pf/rh/mb 6/ 14

S.F. 75 follows: 1 135B.9 Inspections and qualifications for hospital and rural 2 emergency hospital inspectors —— protection and advocacy agency 3 investigations. 4 1. The department shall make or cause to be made inspections 5 as it deems necessary in order to determine compliance with 6 applicable rules. Hospital and rural emergency hospital 7 inspectors shall meet the following qualifications: 8 a. Be free of conflicts of interest. A hospital or rural 9 emergency hospital inspector shall not participate in an 10 inspection or complaint investigation of a hospital or rural 11 emergency hospital in which the inspector or a member of the 12 inspector’s immediate family works or has worked within the 13 last two years. For purposes of this paragraph, “immediate 14 family member” means a spouse; natural or adoptive parent, 15 child, or sibling; or stepparent, stepchild, or stepsibling. 16 b. Complete a yearly conflict of interest disclosure 17 statement. 18 c. Biennially, complete a minimum of ten hours of continuing 19 education pertaining to hospital or rural emergency hospital 20 operations including but not limited to quality and process 21 improvement standards, trauma system standards, and regulatory 22 requirements. 23 2. In the state resource centers and state mental health 24 institutes operated by the department of human services, the 25 designated protection and advocacy agency as provided in 26 section 135C.2, subsection 4 , shall have the authority to 27 investigate all complaints of abuse and neglect of persons 28 with developmental disabilities or mental illnesses if the 29 complaints are reported to the protection and advocacy agency 30 or if there is probable cause to believe that the abuse has 31 occurred. Such authority shall include the examination of all 32 records pertaining to the care provided to the residents and 33 contact or interview with any resident, employee, or any other 34 person who might have knowledge about the operation of the 35 -7- SF 75 (7) 90 pf/rh/mb 7/ 14

S.F. 75 institution. 1 Sec. 12. Section 135B.12, Code 2023, is amended to read as 2 follows: 3 135B.12 Confidentiality. 4 The department’s final findings or the final survey findings 5 of the joint commission on the accreditation of health care 6 organizations or the American osteopathic association with 7 respect to compliance by a hospital or rural emergency hospital 8 with requirements for licensing or accreditation shall be made 9 available to the public in a readily available form and place. 10 Other information relating to a hospital or rural emergency 11 hospital obtained by the department which does not constitute 12 the department’s findings from an inspection of the hospital 13 or rural emergency hospital or the final survey findings of 14 the joint commission on the accreditation of health care 15 organizations or the American osteopathic association shall 16 not be made available to the public, except in proceedings 17 involving the denial, suspension, or revocation of a license 18 under this chapter . The name of a person who files a complaint 19 with the department shall remain confidential and shall not 20 be subject to discovery, subpoena, or other means of legal 21 compulsion for its release to a person other than department 22 employees or agents involved in the investigation of the 23 complaint. 24 Sec. 13. Section 135B.14, Code 2023, is amended to read as 25 follows: 26 135B.14 Judicial review. 27 Judicial review of the action of the department may be sought 28 in accordance with chapter 17A . Notwithstanding the terms of 29 chapter 17A , the Iowa administrative procedure Act, petitions 30 for judicial review may be filed in the district court of the 31 county in which the hospital or rural emergency hospital is 32 located or to be located, and the status quo of the petitioner 33 or licensee shall be preserved pending final disposition of the 34 matter in the courts. 35 -8- SF 75 (7) 90 pf/rh/mb 8/ 14

S.F. 75 Sec. 14. Section 135B.15, Code 2023, is amended to read as 1 follows: 2 135B.15 Penalties. 3 Any person establishing, conducting, managing, or operating 4 any hospital or rural emergency hospital without a license 5 shall be guilty of a serious misdemeanor, and each day of 6 continuing violation after conviction shall be considered a 7 separate offense. 8 Sec. 15. Section 135B.16, Code 2023, is amended to read as 9 follows: 10 135B.16 Injunction. 11 Notwithstanding the existence or pursuit of any other 12 remedy, the department may, in the manner provided by law, 13 maintain an action in the name of the state for injunction 14 or other process against any person or governmental unit to 15 restrain or prevent the establishment, conduct, management or 16 operation of a hospital or rural emergency hospital without a 17 license. 18 Sec. 16. Section 135B.20, subsection 3, Code 2023, is 19 amended to read as follows: 20 3. “Hospital” shall mean means all hospitals and rural 21 emergency hospitals licensed under this chapter . 22 Sec. 17. Section 135B.33, subsection 1, unnumbered 23 paragraph 1, Code 2023, is amended to read as follows: 24 Subject to availability of funds, the Iowa department of 25 public health shall provide technical planning assistance to 26 local boards of health and hospital or rural emergency hospital 27 governing boards to ensure access to hospital such services in 28 rural areas. The department shall encourage the local boards 29 of health and hospital or rural emergency hospital governing 30 boards to adopt a long-term community health services and 31 developmental plan including the following: 32 Sec. 18. Section 135B.34, subsection 7, Code 2023, is 33 amended to read as follows: 34 7. For the purposes of this section , “comprehensive 35 -9- SF 75 (7) 90 pf/rh/mb 9/ 14

S.F. 75 preliminary background check” : 1 a. “Comprehensive preliminary background check” means the 2 same as defined in section 135C.1 . 3 b. “Hospital” means a hospital or rural emergency hospital 4 licensed under this chapter. 5 Sec. 19. EMERGENCY RULEMAKING AUTHORITY. The department 6 shall adopt emergency rules within six months of the effective 7 date of this Act under section 17A.4, subsection 3, and section 8 17A.5, subsection 2, paragraph “b”, to implement the provisions 9 of this division of this Act and the rules shall be effective 10 immediately upon filing unless a later date is specified in the 11 rules. Any rules adopted in accordance with this section shall 12 also be published as a notice of intended action as provided 13 in section 17A.4. 14 Sec. 20. APPLICABILITY. This division of this Act applies 15 to a facility, or due to change in ownership, a successor 16 facility, that was, on or before December 27, 2020, a general 17 hospital with no more than fifty licensed beds, located in a 18 county in a rural area as specified in section 135B.3A, as 19 enacted in this division of this Act, with a population between 20 thirty thousand and thirty-five thousand according to the 2020 21 federal decennial census, operating under a valid certificate 22 of need on and prior to September 1, 2022. Notwithstanding 23 any provision to the contrary, and in accordance with section 24 135B.5A, as amended in this division of this Act, the reopening 25 of a general hospital by a successor facility as specified 26 under this section and subsequent conversion to a rural 27 emergency hospital under this division of this Act, shall not 28 be subject to certificate of need requirements pursuant to 29 section 135.63. 30 Sec. 21. EFFECTIVE DATE. This division of this Act, being 31 deemed of immediate importance, takes effect upon enactment. 32 DIVISION II 33 AMBULATORY SURGICAL CENTERS 34 Sec. 22. NEW SECTION . 135R.1 Definitions. 35 -10- SF 75 (7) 90 pf/rh/mb 10/ 14

S.F. 75 As used in this chapter, unless the context otherwise 1 requires: 2 1. “Ambulatory surgical center” means a distinct facility 3 that operates exclusively for the purpose of providing surgical 4 services to patients not requiring hospitalization and in which 5 the expected duration of services does not exceed twenty-four 6 hours following an admission. “Ambulatory surgical center” 7 includes a facility certified or seeking certification as an 8 ambulatory surgical center under the federal Medicare program 9 or under the medical assistance program established pursuant 10 to chapter 249A. “Ambulatory surgical center” does not include 11 the individual or group practice office of a private physician, 12 podiatrist, or dentist who there engages in the lawful practice 13 of surgery, or the portion of a licensed hospital designated 14 for outpatient surgical treatment. 15 2. “Department” means the department of inspections and 16 appeals. 17 Sec. 23. NEW SECTION . 135R.2 Licensure. 18 A person, acting severally or jointly with any other person, 19 shall not establish, operate, or maintain an ambulatory 20 surgical center in this state without obtaining a license as 21 provided under this chapter. 22 Sec. 24. NEW SECTION . 135R.3 Application for license —— 23 fee. 24 1. An applicant for an ambulatory surgical center license 25 shall submit an application to the department. Applications 26 shall be upon such forms and shall include such information 27 as the department may reasonably require, which may include 28 affirmative evidence of the ability to comply with reasonable 29 rules and standards prescribed under this chapter. 30 2. An application for an initial license for an ambulatory 31 surgical center shall be accompanied by a fee of fifty dollars. 32 3. The fees collected under this section shall be considered 33 repayment receipts as defined in section 8.2 and shall be used 34 by the department to administer this chapter. 35 -11- SF 75 (7) 90 pf/rh/mb 11/ 14

S.F. 75 Sec. 25. NEW SECTION . 135R.4 Rules. 1 1. The department, with the advice and approval of the state 2 board of health, shall adopt rules specifying the standards for 3 ambulatory surgical centers to be licensed under this chapter. 4 The rules shall be consistent with and shall not exceed the 5 requirements of this chapter and the conditions for coverage in 6 the federal Medicare program for ambulatory surgical centers 7 under 42 C.F.R. pt. 416. 8 2. The department shall adopt rules as the department deems 9 necessary to administer the provisions of this chapter relating 10 to the issuance, renewal, denial, suspension, and revocation 11 of a license to establish, operate, and maintain an ambulatory 12 surgical center. 13 3. An ambulatory surgical center which is in operation at 14 the time of adoption of any applicable rules or standards under 15 this chapter shall be given a reasonable time, not to exceed 16 one year from the date of adoption, within which to comply with 17 such rules and standards. 18 4. The department shall enforce the rules. 19 Sec. 26. NEW SECTION . 135R.5 Inspections or investigations. 20 1. The department shall make or cause to be made inspections 21 or investigations of ambulatory surgical centers to determine 22 compliance with this chapter and applicable rules and 23 standards. The department shall perform inspections on a 24 schedule that is of the same frequency required for inspections 25 of Medicare-certified ambulatory surgical centers. 26 2. The department shall recognize, in lieu of its own 27 licensure inspection, the comparable inspection and inspection 28 findings of a Medicare conditions for coverage survey completed 29 by the department or an accrediting organization with deeming 30 authority authorized by the centers for Medicare and Medicaid 31 services of the United States department of health and human 32 services. 33 3. A department inspector shall not participate in an 34 inspection or investigation of an ambulatory surgical center in 35 -12- SF 75 (7) 90 pf/rh/mb 12/ 14

S.F. 75 which the inspector or a member of the inspector’s immediate 1 family works or has worked within the last two years or in 2 which the inspector or the inspector’s immediate family has 3 a financial ownership interest. For the purposes of this 4 section, “immediate family member” means a spouse, natural or 5 adoptive parent or grandparent, child, grandchild, sibling, 6 stepparent, stepchild, or stepsibling. 7 Sec. 27. NEW SECTION . 135R.6 Confidentiality. 8 The department’s final findings with respect to compliance 9 by an ambulatory surgical center with requirements for 10 licensing shall be made available to the public in a readily 11 available form and place. Other information relating to 12 an ambulatory surgical center obtained by the department 13 which does not constitute the department’s findings from an 14 inspection of the ambulatory surgical center shall not be made 15 available to the public, except in proceedings involving the 16 denial, suspension, or revocation of a license under this 17 chapter. The name of a person who files a complaint with the 18 department shall remain confidential and shall not be subject 19 to discovery, subpoena, or other means of legal compulsion for 20 its release to a person other than department employees or 21 agents involved in the investigation of the complaint. 22 Sec. 28. NEW SECTION . 135R.7 Injunction. 23 Notwithstanding the existence or pursuit of any other 24 remedy, the department may, in the manner provided by law, 25 maintain an action in the name of the state for injunction 26 or other process against any person to restrain or prevent 27 the establishment, operation, or maintenance of an ambulatory 28 surgical center without a license. 29 Sec. 29. NEW SECTION . 135R.8 Judicial review. 30 Judicial review of an action of the department may be sought 31 in accordance with chapter 17A. Notwithstanding the provisions 32 of chapter 17A, petitions for judicial review may be filed 33 in the district court of the county in which the ambulatory 34 surgical center is located or is to be located and the status 35 -13- SF 75 (7) 90 pf/rh/mb 13/ 14

S.F. 75 quo of the petitioner or licensee shall be preserved pending 1 final disposition of the judicial review matter. 2 Sec. 30. NEW SECTION . 135R.9 Penalties. 3 Any person establishing, operating, or maintaining any 4 ambulatory surgical center without a license commits a serious 5 misdemeanor, and each day of continuing violation after 6 conviction shall be considered a separate offense. 7 Sec. 31. Section 135.11, Code 2023, is amended by adding the 8 following new subsection: 9 NEW SUBSECTION . 29. Adopt rules requiring ambulatory 10 surgical centers to report quality data to the department 11 of health and human services that is consistent with the 12 data required to be reported to the centers for Medicare and 13 Medicaid services of the United States department of health and 14 human services as authorized by the Medicare Improvements and 15 Extension Act of 2006 under Tit. I of the Tax Relief and Health 16 Care Act of 2006, Pub. L. No. 109-432, and the regulations 17 adopted under such Acts. Notwithstanding any provision of 18 law to the contrary, nothing in this subsection shall require 19 an ambulatory surgical center to provide health data to the 20 department of health and human services or any other public 21 or private entity that is in addition to, different than, 22 or exceeds the quality data required to be reported to the 23 centers for Medicare and Medicaid services of the United States 24 department of health and human services. 25 Sec. 32. Section 135.61, Code 2023, is amended by adding the 26 following new subsection: 27 NEW SUBSECTION . 1A. “Ambulatory surgical center” means 28 ambulatory surgical center as defined in section 135R.1. 29 Sec. 33. Section 135.61, subsection 14, paragraph d, Code 30 2023, is amended to read as follows: 31 d. An outpatient ambulatory surgical facility center . 32 Sec. 34. Section 135.61, subsection 21, Code 2023, is 33 amended by striking the subsection. 34 -14- SF 75 (7) 90 pf/rh/mb 14/ 14