House File 919 - Reprinted HOUSE FILE 919 BY COMMITTEE ON HEALTH AND HUMAN SERVICES (SUCCESSOR TO HSB 268) (As Amended and Passed by the House March 25, 2025 ) A BILL FOR An Act relating to children’s specialty hospital designations 1 for certain nonprofit organizations, and including effective 2 date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 HF 919 (2) 91 dg/ko/md

H.F. 919 Section 1. Section 135B.1, Code 2025, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 7. “Children’s specialty hospital” means a 3 hospital described by all of the following: 4 a. The hospital is owned and operated by a nonprofit 5 organization. 6 b. The hospital only serves individuals thirty years of age 7 and younger. 8 c. More than sixty percent of the individuals served by the 9 hospital receive medical assistance under chapter 249A. 10 d. The hospital specializes in pediatric rehabilitation and 11 treating children with a behavioral health condition or complex 12 medical needs. 13 e. The hospital has no more than two hundred inpatient beds. 14 f. The hospital provides outpatient services. 15 g. The hospital met the definition of a special population 16 nursing facility, as promulgated by rule by the department of 17 health and human services, prior to July 1, 2025. 18 Sec. 2. NEW SECTION . 135B.40 Children’s specialty 19 hospitals. 20 1. The department may adopt rules pursuant to chapter 17A 21 to establish minimum standards for the licensure of children’s 22 specialty hospitals. Rules adopted pursuant to this section 23 shall be formulated in consultation with the director of 24 health and human services or the director’s designee, and with 25 affected industry, professional, and consumer groups. 26 2. A children’s specialty hospital shall establish formal 27 criteria based on objective medical standards for patient 28 admission, discharge, and continuation of care. 29 Sec. 3. DEPARTMENT OF INSPECTIONS, APPEALS, AND LICENSING 30 —— DEPARTMENT OF HEALTH AND HUMAN SERVICES —— CHILDREN’S 31 SPECIALTY HOSPITALS. 32 1. For purposes of this section, “licensed entity” means 33 an entity granted a provisional children’s specialty hospital 34 license under subsection 2, paragraph “a”. 35 -1- HF 919 (2) 91 dg/ko/md 1/ 4

H.F. 919 2. The department of inspections, appeals, and licensing 1 shall do all of the following: 2 a. Within thirty calendar days of the effective date of 3 this Act, grant a provisional children’s specialty hospital 4 license to an entity that requests such provisional licensure 5 provided that the entity meets the definition of children’s 6 specialty hospital under section 135B.1. A provisional license 7 granted under this paragraph shall be valid for no more than 8 twenty-four consecutive months from the date the provisional 9 license is granted. A licensed entity may seek federal 10 certification and participation in federal reimbursement 11 programs that require hospital licensure. 12 b. Grant reasonable waivers from state hospital rules to 13 permit a licensed entity to maintain the licensed entity’s 14 operations as provided prior to the effective date of this 15 Act, until the date the licensed entity obtains federal 16 certification or the ability to participate in federal 17 reimbursement programs that require hospital licensure. After 18 a licensed entity obtains federal certification or the ability 19 to participate in federal reimbursement programs that require 20 hospital licensure, the department of inspections, appeals, and 21 licensing and the department of health and human services shall 22 grant the necessary waivers to the licensed entity to ensure 23 the licensed entity’s compliance with the requirements of the 24 federal certification or the federal reimbursement programs. 25 Waivers granted under this paragraph shall specifically include 26 a waiver from state rules that require a licensed entity to 27 maintain, or to have available, laboratory and pathology 28 services and facilities, other than laboratory and pathology 29 services and facilities that the licensed entity maintained 30 prior to the effective date of this Act, and a waiver from 31 state rules that require the provision of emergency services, 32 other than emergency services that the licensed entity provided 33 prior to the effective date of this Act. Each waiver granted 34 to a licensed entity under this paragraph shall be valid for 35 -2- HF 919 (2) 91 dg/ko/md 2/ 4

H.F. 919 no more than twenty-four consecutive months from the date the 1 licensed entity was granted a provisional children’s specialty 2 hospital license under paragraph “a”, or until the date the 3 licensed entity obtains a permanent children’s specialty 4 hospital license, whichever date is earlier. 5 c. Collaborate with the department of health and human 6 services and a licensed entity to assist the licensed entity 7 in seeking federal certification or participation in federal 8 reimbursement programs requiring hospital licensure. 9 3. A licensed entity may operate under the minimum physical 10 standards for nursing facilities in 481 IAC 61 under which 11 the licensed entity operated prior to the effective date of 12 this Act, and shall be exempt from all other construction 13 standards applicable only to hospitals and off-site premises. 14 The exemption under this paragraph shall include the exemption 15 from the standards set forth in the guidelines for design 16 and construction of hospitals as published by the facility 17 guidelines institute. 18 4. The department of health and human services shall set 19 reimbursement rates for inpatient care and outpatient care 20 provided by the licensed entity. Reimbursement rates under 21 this subsection shall be equal to the licensed entity’s average 22 allowable per diem costs, and adjusted for inflation based on 23 all of the following: 24 a. For inpatient care, 441 IAC 79.1(5)(k). 25 b. For outpatient care, 441 IAC 79.1(1)(g), (h), and (i). 26 5. A licensed entity shall be exempt from certificate of 27 need requirements under chapter 10A, subchapter VII, part 2, 28 to the extent that the licensed entity is implementing a new 29 institutional health service, or a changed institutional health 30 service, for the purpose of converting the licensed entity to a 31 children’s specialty hospital, or to revert the licensed entity 32 to a nursing facility. The exemption under this subsection 33 shall continue until the earlier of the following occurs: 34 a. The date the licensed entity obtains a permanent 35 -3- HF 919 (2) 91 dg/ko/md 3/ 4

H.F. 919 children’s specialty hospital license. 1 b. Twenty-four consecutive months from the date the 2 licensed entity was granted a provisional children’s specialty 3 hospital license. 4 Sec. 4. EMERGENCY RULES. The department of inspections, 5 appeals, and licensing may adopt emergency rules under section 6 17A.4, subsection 3, and section 17A.5, subsection 2, paragraph 7 “b”, to implement the provisions of this Act and the rules 8 shall be effective immediately upon filing unless a later date 9 is specified in the rules. Any rules adopted in accordance 10 with this section shall also be published as a notice of 11 intended action as provided in section 17A.4. 12 Sec. 5. EFFECTIVE DATE. This Act, being deemed of immediate 13 importance, takes effect upon enactment. 14 -4- HF 919 (2) 91 dg/ko/md 4/ 4