House File 2635 - Reprinted HOUSE FILE 2635 BY COMMITTEE ON HEALTH AND HUMAN SERVICES (SUCCESSOR TO HF 2438) (As Amended and Passed by the House March 3, 2026 ) A BILL FOR An Act relating to health carriers standards of conduct; 1 utilization review organizations, artificial intelligence, 2 audits, and prior authorizations; certificate of need 3 processes; and including applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 HF 2635 (2) 91 nls/ko/md

H.F. 2635 DIVISION I 1 HEALTH INSURANCE TRADE PRACTICES 2 Section 1. Section 514F.8, Code 2026, is amended by adding 3 the following new subsection: 4 NEW SUBSECTION . 2A. A utilization review organization may 5 use an artificial intelligence-based algorithm or system to 6 provide an initial review of a request for prior authorization, 7 except that, for a prior authorization request for a health 8 care service based on medical necessity, a utilization review 9 organization shall not use an artificial intelligence-based 10 algorithm or system as the sole basis for the utilization 11 review organization’s decision to deny, delay, or downgrade the 12 prior authorization request. 13 Sec. 2. NEW SECTION . 514F.8C Utilization review 14 organizations —— audits. 15 1. As used in this section, unless the context otherwise 16 requires: 17 a. “Audit” means a review, investigation, or request for 18 additional documentation by a utilization review organization 19 before or after issuing payment on a claim to a health care 20 provider. 21 b. “Commissioner” means the commissioner of insurance. 22 c. “Health care provider” means the same as defined in 23 section 514F.8. 24 d. “Health carrier” means the same as defined in Section 25 514F.8. 26 e. “Utilization review organization” means the same as 27 defined in section 514F.8. 28 2. a. A utilization review organization that conducts an 29 audit shall notify the health care provider that submitted 30 the claim of the initiation of the audit no later than 31 fifteen calendar days after the date the utilization review 32 organization selects the claim for audit. 33 b. A utilization review organization shall complete an audit 34 of a claim and issue a determination on the claim to the health 35 -1- HF 2635 (2) 91 nls/ko/md 1/ 21

H.F. 2635 care provider that submitted the claim no later than forty-five 1 calendar days after the date that the utilization review 2 organization receives all requested documentation regarding the 3 claim from the health care provider. 4 c. A health care provider that submitted a claim that is 5 the subject of an audit by a utilization review organization 6 that receives an adverse determination regarding the claim may 7 appeal the adverse determination no later than thirty calendar 8 days after the date the health care provider receives the audit 9 determination. 10 d. A utilization review organization shall consider an 11 appeal under paragraph “c” and issue a final determination 12 on the claim that is the subject of the appeal no later than 13 thirty calendar days after the date the utilization review 14 organization receives notice of the appeal. 15 e. If, after a hearing, the commissioner finds that a 16 utilization review organization has violated this subsection, 17 the claim shall be approved by the utilization review 18 organization and promptly paid, including interest at the rate 19 of ten percent per annum. 20 3. a. This section applies to the following classes of 21 third-party payment provider contracts, policies, or plans 22 delivered, issued for delivery, continued, or renewed in this 23 state on or after January 1, 2027: 24 (1) Individual or group accident and sickness insurance 25 providing coverage on an expense-incurred basis. 26 (2) An individual or group hospital or medical service 27 contract issued pursuant to chapter 509, 514, or 514A. 28 (3) An individual or group health maintenance organization 29 contract regulated under chapter 514B. 30 (4) A plan established for public employees pursuant to 31 chapter 509A. 32 b. This section shall not apply to accident-only, specified 33 disease, short-term hospital or medical, hospital confinement 34 indemnity, credit, dental, vision, Medicare supplement, 35 -2- HF 2635 (2) 91 nls/ko/md 2/ 21

H.F. 2635 long-term care, basic hospital and medical-surgical expense 1 coverage as defined by the commissioner of insurance, 2 disability income insurance coverage, coverage issued as a 3 supplement to liability insurance, workers’ compensation or 4 similar insurance, or automobile medical payment insurance. 5 4. The commissioner may adopt rules pursuant to chapter 17A 6 to administer and enforce this section. 7 5. a. This section shall apply to an audit initiated on or 8 after January 1, 2027. 9 b. This section shall not apply to a claim that is under 10 active fraud investigation by a state or federal authority. 11 c. This section shall not apply to a federal program where 12 audits are mandated by federal law. 13 Sec. 3. NEW SECTION . 514F.8D Health carriers —— standards 14 of conduct. 15 1. As used in this section, unless the context otherwise 16 requires: 17 a. “Health care provider” means the same as defined in 18 section 514J.102. 19 b. “Health carrier” means the same as defined in section 20 514F.8. 21 2. A health carrier shall not impose on a health care 22 provider, directly or indirectly, any financial penalty, 23 reimbursement reduction, or administrative fee, or terminate a 24 health care provider’s participation in the health carrier’s 25 network, based on the health care provider’s referral to, or 26 affiliation with, an out-of-network health care provider. 27 3. A health carrier shall not interfere with, or participate 28 in any capacity in, a health care provider’s decisions 29 regarding staffing and referrals, except as otherwise provided 30 by law. 31 4. A health carrier shall not offer, attempt to enforce, 32 or enforce an agreement, or an amendment to an agreement, with 33 a health care provider without providing an opportunity for 34 negotiation. 35 -3- HF 2635 (2) 91 nls/ko/md 3/ 21

H.F. 2635 5. The commissioner may adopt rules pursuant to chapter 17A 1 to administer and enforce this section. 2 DIVISION II 3 PRIOR AUTHORIZATIONS 4 Sec. 4. NEW SECTION . 514F.8A Prior authorizations —— peer 5 review. 6 1. For purposes of this section, unless the context 7 otherwise requires: 8 a. “Clinical peer” means a health care professional that 9 meets all of the following requirements: 10 (1) The health care professional practices in the same or 11 similar specialty as the health care provider that requested 12 a prior authorization. 13 (2) The health care professional has experience managing 14 the specific medical condition or administering the health care 15 service that is the subject of the prior authorization request. 16 (3) The health care professional is employed by or 17 contracted with the utilization review organization or health 18 carrier to which a health care provider submitted a request for 19 prior authorization. 20 b. “Covered person” means the same as defined in section 21 514F.8. 22 c. “Downgrade” means a decision by a utilization review 23 organization to change an expedited or urgent request for prior 24 authorization to a standard determination, or otherwise modify 25 a health care service that is the subject of a request for 26 prior authorization to a lower-level health care service. 27 d. “Health care professional” means the same as defined in 28 section 514J.102. 29 e. “Health care provider” means the same as defined in 30 section 514F.8. 31 f. “Health care services” means the same as defined in 32 section 514F.8. 33 g. “Health carrier” means the same as defined in section 34 514F.8. 35 -4- HF 2635 (2) 91 nls/ko/md 4/ 21

H.F. 2635 h. “Physician” means a doctor of medicine and surgery, or 1 a doctor of osteopathic medicine and surgery, licensed under 2 chapter 148. 3 i. “Prior authorization” means the same as defined in 4 section 514F.8. 5 j. “Qualified reviewer” means a physician that meets all of 6 the following requirements: 7 (1) The physician practices in the same or a similar 8 specialty as the health care provider that requested a prior 9 authorization. 10 (2) The physician has the training and expertise to treat 11 the specific medical condition that is the subject of a 12 request for prior authorization, including sufficient knowledge 13 to determine whether the health care service that is the 14 subject of the request is medically necessary or clinically 15 appropriate. 16 (3) The physician is employed by or contracted with the 17 utilization review organization to which a health care provider 18 submitted a request for prior authorization. 19 k. “Utilization review organization” means the same as 20 defined in section 514F.8. 21 2. A utilization review organization shall not deny or 22 downgrade a request for prior authorization unless all of the 23 following requirements are met: 24 a. The decision to deny or downgrade the request is made by 25 either of the following: 26 (1) A qualified reviewer, if the health care provider 27 requesting prior authorization is a physician. 28 (2) A clinical peer, if the health care provider requesting 29 prior authorization is not a physician. 30 b. The utilization review organization provides the health 31 care provider that requested the prior authorization all of the 32 following: 33 (1) A written statement that cites the specific reasons 34 for the denial or downgrade, including any coverage criteria 35 -5- HF 2635 (2) 91 nls/ko/md 5/ 21

H.F. 2635 or limits, or clinical criteria, that the utilization review 1 organization considered or that was the basis for the denial 2 or downgrade. The written statement must be signed by either 3 of the following: 4 (a) The qualified reviewer that made the denial or downgrade 5 determination if the health care provider that requested prior 6 authorization is a physician. 7 (b) The clinical peer that made the denial or downgrade 8 determination if the health care provider that requested prior 9 authorization is not a physician. 10 (2) A written explanation of the utilization review 11 organization’s appeals process. The utilization review 12 organization shall also provide the written explanation to the 13 covered person for whom prior authorization was requested. 14 (3) A written attestation that is either of the following: 15 (a) If the health care provider that requested prior 16 authorization is a physician, a written attestation that 17 the qualified reviewer who made the denial or downgrade 18 determination practices in the same or a similar specialty as 19 the health care provider, and has the requisite training and 20 expertise to treat the medical condition that is the subject 21 of the request for prior authorization, including sufficient 22 knowledge to determine whether the health care service is 23 medically necessary or clinically appropriate. The attestation 24 shall include the qualified reviewer’s name, national provider 25 identifier, state medical license number, board certifications, 26 specialty expertise, and educational background. 27 (b) If the health care provider that requested prior 28 authorization is not a physician, a written attestation 29 that the clinical peer who made the denial or downgrade 30 determination practices in the same or a similar specialty as 31 the health care provider, and the clinical peer has experience 32 managing the specific medical condition or administering 33 the health care service that is the subject of the request 34 for prior authorization. The attestation shall include the 35 -6- HF 2635 (2) 91 nls/ko/md 6/ 21

H.F. 2635 clinical peer’s name, national provider identifier, state 1 medical license number, board certifications, specialty 2 expertise, and educational background. 3 3. At the request of the requesting health care provider, a 4 utilization review organization that denies a request for prior 5 authorization shall, no later than seven business days after 6 the date that the utilization review organization notifies 7 the requesting health care provider of the denial, conduct a 8 consultation either in person or remotely, as follows: 9 a. Between the health care provider and a qualified reviewer 10 if the health care provider requesting prior authorization is a 11 physician. 12 b. Between the health care provider and a clinical peer if 13 the health care provider requesting prior authorization is not 14 a physician. 15 4. a. If a utilization review organization’s decision to 16 deny or downgrade a request for prior authorization is appealed 17 by the requesting health care provider or covered person, the 18 appeal shall be conducted by either of the following: 19 (1) A qualified reviewer if the health care provider 20 requesting prior authorization is a physician. 21 (2) A clinical peer if the health care provider requesting 22 prior authorization is not a physician. 23 b. A qualified reviewer or clinical peer involved in the 24 initial denial or downgrade determination of a request for 25 prior authorization that is the subject of an appeal shall not 26 conduct the appeal. 27 c. When conducting an appeal of a request for prior 28 authorization, the qualified reviewer or clinical peer shall 29 consider the known clinical aspects of the health care services 30 under review, including but not limited to medical records 31 relevant to the covered person’s medical condition who is 32 the subject of the health care services for which prior 33 authorization is requested, and any relevant medical literature 34 submitted by the health care provider as part of the appeal. 35 -7- HF 2635 (2) 91 nls/ko/md 7/ 21

H.F. 2635 5. This section applies to requests for prior authorization 1 made on or after January 1, 2027. 2 6. a. This section applies to the following classes of 3 third-party payment provider contracts, policies, or plans 4 delivered, issued for delivery, continued, or renewed in this 5 state on or after January 1, 2027: 6 (1) Individual or group accident and sickness insurance 7 providing coverage on an expense-incurred basis. 8 (2) An individual or group hospital or medical service 9 contract issued pursuant to chapter 509, 514, or 514A. 10 (3) An individual or group health maintenance organization 11 contract regulated under chapter 514B. 12 (4) A plan established for public employees pursuant to 13 chapter 509A. 14 b. This section shall not apply to accident-only, specified 15 disease, short-term hospital or medical, hospital confinement 16 indemnity, credit, dental, vision, Medicare supplement, 17 long-term care, basic hospital and medical-surgical expense 18 coverage as defined by the commissioner of insurance, 19 disability income insurance coverage, coverage issued as a 20 supplement to liability insurance, workers’ compensation or 21 similar insurance, or automobile medical payment insurance. 22 7. The commissioner of insurance may adopt rules pursuant to 23 chapter 17A to administer this section. 24 Sec. 5. NEW SECTION . 514F.8B Prior authorizations —— 25 exemptions. 26 1. For purposes of this section: 27 a. “Covered person” means the same as defined in section 28 514F.8. 29 b. “Health benefit plan” means the same as defined in 30 section 514J.102. 31 c. “Health care professional” means the same as defined in 32 section 514J.102. 33 d. “Health carrier” means the same as defined in section 34 514F.8. 35 -8- HF 2635 (2) 91 nls/ko/md 8/ 21

H.F. 2635 e. “Prior authorization” means the same as defined in 1 section 514F.8. 2 f. “Utilization review” means the same as defined in section 3 514F.4, subsection 3. 4 2. A health carrier shall not require prior authorization 5 for, or impose additional utilization review requirements on, a 6 covered person for any of the following: 7 a. A cancer-related screening if the cancer-related 8 screening is recommended by the covered person’s health care 9 professional based on the most recently updated national 10 comprehensive cancer network clinical practice guidelines in 11 oncology which are designated as category 2A or lower. 12 b. Diagnosis and treatment of an emergency medical condition 13 that develops or becomes evident in a covered person while 14 the covered person is receiving inpatient care that meets 15 inpatient care standards, if the emergency medical condition 16 is reasonably determined by a health care professional to be a 17 life-threatening condition unless the covered person receives 18 immediate assessment and treatment. 19 3. This section applies to all of the following: 20 a. Health benefit plans delivered, issued for delivery, 21 continued, or renewed in this state on or after January 1, 22 2027. 23 b. Requests for prior authorization for a cancer-related 24 screening, if the screening is recommended by the covered 25 person’s health care professional based on the most recently 26 updated national comprehensive cancer network clinical practice 27 guidelines in oncology designated as category 2A or lower, and 28 is made on or after January 1, 2027. 29 c. Requests for prior authorization for the diagnosis and 30 treatment of an emergency medical condition that develops or 31 becomes evident in a covered person while the covered person is 32 receiving inpatient care that meets inpatient care standards, 33 if the emergency medical condition is reasonably determined by 34 a health care professional to be a life-threatening condition 35 -9- HF 2635 (2) 91 nls/ko/md 9/ 21

H.F. 2635 unless the covered person receives immediate assessment and 1 treatment if the request is made on or after January 1, 2027. 2 4. a. This section applies to the following classes of 3 third-party payment provider contracts, policies, or plans 4 delivered, issued for delivery, continued, or renewed in this 5 state on or after January 1, 2027: 6 (1) Individual or group accident and sickness insurance 7 providing coverage on an expense-incurred basis. 8 (2) An individual or group hospital or medical service 9 contract issued pursuant to chapter 509, 514, or 514A. 10 (3) An individual or group health maintenance organization 11 contract regulated under chapter 514B. 12 (4) A plan established for public employees pursuant to 13 chapter 509A. 14 b. This section shall not apply to accident-only, specified 15 disease, short-term hospital or medical, hospital confinement 16 indemnity, credit, dental, vision, Medicare supplement, 17 long-term care, basic hospital and medical-surgical expense 18 coverage as defined by the commissioner of insurance, 19 disability income insurance coverage, coverage issued as a 20 supplement to liability insurance, workers’ compensation or 21 similar insurance, or automobile medical payment insurance. 22 5. The commissioner of insurance may adopt rules pursuant to 23 chapter 17A to administer this section. 24 Sec. 6. NEW SECTION . 514F.8E Enforcement. 25 The remedy for noncompliance with section 514F.8, 514F.8A, 26 514F.8B, 514F.8C, or 514F.8D shall be those remedies authorized 27 by chapters 505 and 507B pursuant to the procedures set forth 28 in sections 507B.6, 507B.7, and 507B.8. Upon a finding of 29 a pattern or practice of noncompliance with sections 514F.8, 30 514F.8A, 514F.8B, 514F.8C, or 514F.8D, the commissioner of 31 insurance may also suspend a utilization review organization’s 32 authority to conduct utilization review. 33 DIVISION III 34 PRIOR AUTHORIZATIONS —— MEDICAL ASSISTANCE PROGRAM 35 -10- HF 2635 (2) 91 nls/ko/md 10/ 21

H.F. 2635 Sec. 7. NEW SECTION . 249A.5 Prior authorization —— 1 exemptions. 2 1. For purposes of this section, unless the context 3 otherwise requires: 4 a. “Emergency medical condition” means the same as defined 5 in 42 C.F.R. §438.114. 6 b. “Managed care organization” means an entity acting 7 pursuant to a contract with the department to administer the 8 medical assistance program. 9 c. “Prior authorization” means any process used by the 10 department or a managed care organization to determine if, 11 before a health care service is furnished to a recipient, the 12 service is covered or medically necessary. 13 d. “Utilization review” means a set of formal techniques 14 used to monitor or evaluate the medical necessity, 15 appropriateness, or efficiency of a health care service. 16 2. The department, or a managed care organization, shall 17 not require prior authorization for, or impose additional 18 utilization review requirements on, a recipient for any of the 19 following: 20 a. A cancer-related screening recommended for the recipient 21 by the recipient’s provider in accordance with the most 22 recently updated national comprehensive cancer network clinical 23 practice guidelines in oncology which are designated as 24 category 2A or lower. 25 b. The diagnosis and treatment of an emergency medical 26 condition that develops or becomes evident in a recipient 27 while the recipient is receiving inpatient care that 28 meets inpatient care standards, if the emergency medical 29 condition is reasonably determined by a provider to present a 30 life-threatening risk unless the recipient receives immediate 31 assessment and treatment. 32 3. This section applies to all of the following: 33 a. All contracts between the department and a managed 34 care organization that are delivered, issued for delivery, 35 -11- HF 2635 (2) 91 nls/ko/md 11/ 21

H.F. 2635 continued, extended, or renewed on or after January 1, 2027. 1 b. All requests for prior authorization made on or after 2 January 1, 2027. 3 4. The department may adopt rules pursuant to chapter 17A to 4 administer this section. 5 Sec. 8. NEW SECTION . 514I.13 Prior authorizations —— 6 exemptions. 7 1. For purposes of this section: 8 a. “Emergency medical condition” means the same as defined 9 in 42 C.F.R. §438.114. 10 b. “Health care professional” means a person licensed or 11 certified under the laws of this state to provide health care 12 services to an eligible child. 13 c. “Managed care organization” means an entity acting 14 pursuant to a contract with the department to administer the 15 Hawki program. 16 d. “Prior authorization” means any process used by the 17 department or a managed care organization to determine if, 18 before a health care service is furnished to an eligible child, 19 the service is covered or medically necessary. 20 e. “Utilization review” means a set of formal techniques 21 used to monitor or evaluate the medical necessity, 22 appropriateness, or efficiency of a health care service. 23 2. The department, or a managed care organization, shall 24 not require prior authorization for, or impose additional 25 utilization review requirements on, an eligible child for any 26 of the following: 27 a. A cancer-related screening recommended for the eligible 28 child by the eligible child’s health care professional 29 in accordance with the most recently updated national 30 comprehensive cancer network clinical practice guidelines in 31 oncology which are designated as category 2A or lower. 32 b. The diagnosis and treatment of an emergency medical 33 condition that develops or becomes evident in an eligible child 34 while the eligible child is receiving inpatient care that meets 35 -12- HF 2635 (2) 91 nls/ko/md 12/ 21

H.F. 2635 inpatient care standards, if the emergency medical condition is 1 reasonably determined by a health care professional to present 2 a life-threatening risk unless the eligible child receives 3 immediate assessment and treatment. 4 3. This section applies to all of the following: 5 a. All contracts between the department and a managed 6 care organization that are delivered, issued for delivery, 7 continued, extended, or renewed on or after January 1, 2027. 8 b. All requests for prior authorizations made on or after 9 January 1, 2027. 10 4. The department may adopt rules pursuant to chapter 17A to 11 administer this section. 12 DIVISION IV 13 CERTIFICATES OF NEED 14 Sec. 9. Section 135.61, subsection 1, paragraphs d and f, 15 Code 2026, are amended by striking the paragraphs. 16 Sec. 10. Section 135.61, subsection 12, paragraph e, Code 17 2026, is amended by striking the paragraph. 18 Sec. 11. Section 135.61, subsection 16, Code 2026, is 19 amended to read as follows: 20 16. “New institutional health service” or “changed 21 institutional health service” means any of the following: 22 a. (1) The construction, development , or other 23 establishment of a new institutional health facility regardless 24 of ownership if completing the construction, development, or 25 other establishment requires more than the following amount: 26 (a) Beginning on or after January 1, 2027, and before 27 December 31, 2031, four million dollars . 28 (b) Beginning on or after January 1, 2032, and before 29 December 31, 2036, four million five hundred thousand dollars. 30 (c) Beginning on or after January 1, 2037, five million 31 dollars. 32 (2) If the new institutional health facility involves 33 the use of a leased building, the market value of the leased 34 building shall be used when calculating the value of completing 35 -13- HF 2635 (2) 91 nls/ko/md 13/ 21

H.F. 2635 construction, development, or other establishment under 1 subparagraph (1). 2 b. Relocation of an institutional health facility. 3 c. Any A capital expenditure, lease, or donation by or on 4 behalf of an institutional health facility in excess of one 5 million five hundred thousand dollars the following amount 6 within a consecutive twelve-month period : 7 (1) Beginning on or after January 1, 2027, and before 8 December 31, 2031, four million dollars. 9 (2) Beginning on or after January 1, 2032, and before 10 December 31, 2036, four million five hundred thousand dollars. 11 (3) Beginning on or after January 1, 2037, five million 12 dollars . 13 d. A permanent change in the bed capacity, as determined 14 by the department, of an institutional health facility. For 15 purposes of this paragraph, a change is permanent if it is 16 intended to be effective for one year or more. 17 e. Any expenditure in excess of five hundred thousand 18 dollars by or on behalf of an institutional health facility for 19 health services which are or will be offered in or through an 20 institutional health facility at a specific time but which were 21 not offered on a regular basis in or through that institutional 22 health facility within the twelve-month period prior to that 23 time. 24 f. The deletion of one or more health services, previously 25 offered on a regular basis by an institutional health facility 26 or health maintenance organization or the relocation of one or 27 more health services from one physical facility to another. 28 g. Any acquisition by or on behalf of a health care provider 29 or a group of health care providers of any piece of replacement 30 equipment with a value in excess of one million five hundred 31 thousand dollars, whether acquired by purchase, lease, or 32 donation. 33 h. e. (1) Any acquisition by or on behalf of a health 34 care provider or group of health care providers of any piece of 35 -14- HF 2635 (2) 91 nls/ko/md 14/ 21

H.F. 2635 equipment with a value in excess of one million five hundred 1 thousand dollars , whether acquired by purchase, lease, or 2 donation, which results in the offering or development of a 3 health service not previously provided that has a value in 4 excess of the following amount: 5 (a) Beginning on or after January 1, 2027, and before 6 December 31, 2031, four million dollars . 7 (b) Beginning on or after January 1, 2032, and before 8 December 31, 2036, four million five hundred thousand dollars. 9 (c) Beginning on or after January 1, 2037, five million 10 dollars. 11 (2) A mobile health service provided on a contract basis 12 is not considered to have been previously provided by a health 13 care provider or group of health care providers. 14 i. Any acquisition by or on behalf of an institutional 15 health facility or a health maintenance organization of any 16 piece of replacement equipment with a value in excess of one 17 million five hundred thousand dollars, whether acquired by 18 purchase, lease, or donation. 19 j. f. (1) Any acquisition by or on behalf of an 20 institutional health facility or health maintenance 21 organization of any piece of equipment with a value in excess 22 of one million five hundred thousand dollars , whether acquired 23 by purchase, lease, or donation, which results in the offering 24 or development of a health service not previously provided that 25 has a value in excess of the following amount: 26 (a) Beginning on or after January 1, 2027, and before 27 December 31, 2031, four million dollars . 28 (b) Beginning on or after January 1, 2032, and before 29 December 31, 2036, four million five hundred thousand dollars. 30 (c) Beginning on or after January 1, 2037, five million 31 dollars. 32 (2) A mobile health service provided on a contract basis 33 is not considered to have been previously provided by an 34 institutional health facility. 35 -15- HF 2635 (2) 91 nls/ko/md 15/ 21

H.F. 2635 k. Any air transportation service for transportation of 1 patients or medical personnel offered through an institutional 2 health facility at a specific time but which was not offered 3 on a regular basis in or through that institutional health 4 facility within the twelve-month period prior to the specific 5 time. 6 l. g. Any A mobile health service with a value in excess of 7 one four million five hundred thousand dollars. 8 m. Any of the following: 9 (1) Cardiac catheterization service. 10 (2) Open heart surgical service. 11 (3) Organ transplantation service. 12 (4) Radiation therapy service applying ionizing radiation 13 for the treatment of malignant disease using megavoltage 14 external beam equipment. 15 Sec. 12. Section 135.62, subsection 1, Code 2026, is amended 16 to read as follows: 17 1. a. A new institutional health service or changed 18 institutional health service shall not be offered or developed 19 in this state without prior application to the department 20 for , and receipt of , a certificate of need, pursuant to this 21 subchapter . 22 b. The application shall be made upon on forms furnished or 23 prescribed by the department and shall contain such information 24 as required by the department may require under this subchapter 25 by rule adopted pursuant to chapter 17A . 26 c. (1) The application shall be accompanied by a fee 27 equivalent to three-tenths of one percent of the anticipated 28 cost of the project with a minimum fee of six hundred dollars 29 and a maximum fee of twenty-one thousand dollars. The fee 30 shall be remitted by the department to the treasurer of state , 31 who shall place it for deposit in the general fund of the 32 state. An applicant for a new institutional health service or 33 a changed institutional health service offered or developed by 34 an intermediate care facility for persons with an intellectual 35 -16- HF 2635 (2) 91 nls/ko/md 16/ 21

H.F. 2635 disability or an intermediate care facility for persons with 1 mental illness, as each of those terms are defined in section 2 135C.1, shall not be required to pay the application fee. 3 (2) If an application is voluntarily withdrawn within 4 thirty calendar days after submission, seventy-five percent 5 of the application fee shall be refunded ; if the application 6 is voluntarily withdrawn more than thirty but within sixty 7 days after submission, fifty percent of the application fee 8 shall be refunded; if the application is withdrawn voluntarily 9 more than sixty days after submission, twenty-five percent of 10 the application fee shall be refunded . Notwithstanding the 11 required payment of an application fee under this subsection , 12 an applicant for a new institutional health service or a 13 changed institutional health service offered or developed by 14 an intermediate care facility for persons with an intellectual 15 disability or an intermediate care facility for persons with 16 mental illness as defined pursuant to section 135C.1 is exempt 17 from payment of the application fee. 18 Sec. 13. Section 135.62, subsection 2, paragraphs a and e, 19 Code 2026, are amended to read as follows: 20 a. Private offices and private clinics of an individual 21 physician, dentist, or other practitioner or group of 22 health care providers, except as provided by section 135.61, 23 subsection 16 , paragraphs “g” , “h” , and “m” paragraph “e” , and 24 section 135.61, subsections 2 and 18 . 25 e. A health maintenance organization or combination of 26 health maintenance organizations or an institutional health 27 facility controlled directly or indirectly by a health 28 maintenance organization or combination of health maintenance 29 organizations, except when the health maintenance organization 30 or combination of health maintenance organizations does any of 31 the following: 32 (1) Constructs, develops, renovates, relocates, or 33 otherwise establishes an institutional health facility. 34 (2) Acquires major medical equipment as provided by section 35 -17- HF 2635 (2) 91 nls/ko/md 17/ 21

H.F. 2635 135.61, subsection 16, paragraphs “i” and “j” paragraph “f” . 1 Sec. 14. Section 135.62, subsection 2, paragraph h, 2 subparagraph (2), Code 2026, is amended to read as follows: 3 (2) If these conditions are not met, the institutional 4 health facility or health maintenance organization is subject 5 to review as a “new institutional health service” or “changed 6 institutional health service” under section 135.61, subsection 7 16 , paragraph “f” , and is subject to sanctions under section 8 135.72 . 9 Sec. 15. Section 135.62, subsection 2, Code 2026, is amended 10 by adding the following new paragraphs: 11 NEW PARAGRAPH . r. An organized outpatient health 12 facility that provides behavioral health services as defined 13 by the department by rule, including but not limited to 14 substitution-based treatment centers for opiate addiction. 15 NEW PARAGRAPH . s. Open heart surgical services. 16 NEW PARAGRAPH . t. Organ transplantation services. 17 NEW PARAGRAPH . u. Radiation therapy services. 18 NEW PARAGRAPH . v. Cardiac catheterization services. 19 Sec. 16. Section 135.63, subsection 2, paragraph b, Code 20 2026, is amended by striking the paragraph. 21 Sec. 17. Section 135.65, subsections 1 and 2, Code 2026, are 22 amended to read as follows: 23 1. a. Within fifteen business days after receipt of the 24 date the department receives an application for a certificate 25 of need, the department shall examine the application for form 26 and completeness and accept or reject it. An application 27 shall be rejected only if it fails to provide all information 28 required by the department pursuant to section 135.62, 29 subsection 1 . The department shall promptly return to the 30 applicant any a rejected application , to the applicant with an 31 explanation of the reasons for its rejection. 32 b. Within thirty calendar days of the date the department 33 sends a rejected application to an applicant, the applicant may 34 revise and resubmit the application once for review without 35 -18- HF 2635 (2) 91 nls/ko/md 18/ 21

H.F. 2635 submitting another application fee under section 135.62. 1 2. Upon acceptance of an application for a certificate 2 of need, the department shall promptly undertake to notify 3 all affected persons in writing through electronic means 4 that formal review of the application has been initiated. 5 Notification to those affected persons who are consumers 6 or third-party payers or other payers for health services 7 may be provided by electronic distribution of the pertinent 8 information to the news media . 9 Sec. 18. Section 135.65, subsection 3, paragraph b, Code 10 2026, is amended to read as follows: 11 b. A period for the submission of written public hearing 12 comments from affected persons on the application, to be held 13 scheduled prior to completion of the evaluation required by 14 paragraph “a” . 15 Sec. 19. Section 135.65, subsection 4, Code 2026, is amended 16 by striking the subsection. 17 Sec. 20. Section 135.66, subsection 1, Code 2026, is amended 18 to read as follows: 19 1. The department may waive the letter of intent procedures 20 prescribed by section 135.64 and substitute conduct a summary 21 review procedure, which shall be established by rules of 22 adopted by the department, when it the department accepts an 23 application for a certificate of need for a project which that 24 meets any of the following criteria in paragraphs “a” through 25 “e” : 26 a. A project which is limited to repair or replacement of a 27 facility or equipment damaged or destroyed by a disaster, and 28 which will not expand the facility nor increase the services 29 provided beyond the level existing prior to the disaster. 30 b. A project necessary to enable the facility or service to 31 achieve or maintain compliance with federal, state, or other 32 appropriate licensing, certification, or safety requirements. 33 c. A project which will not change the existing bed capacity 34 of the applicant’s facility or service, as determined by the 35 -19- HF 2635 (2) 91 nls/ko/md 19/ 21