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Senate Study Bill 1117 - IntroducedA Bill ForAn Act 1relating to the certificate of need process.
2BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 135.61, subsections 1, 14, 15, and 18,
2Code 2023, are amended to read as follows:
31. “Affected persons” means, with respect to an application
4for a certificate of need:
5a. The person submitting the application.
6b. Consumers who would be served by the new institutional
7health service proposed in the application.
8c. Each institutional health facility or health maintenance
9organization which is located in the geographic area which
10would appropriately be served by the new institutional
11health service proposed in the application. The appropriate
12geographic service area of each institutional health facility
13or health maintenance organization shall be determined on a
14uniform basis in accordance with criteria established in rules
15adopted by the department.
16d. Each institutional health facility or health maintenance
17organization which, prior to receipt of the application by
18the department, has formally indicated to the department
19pursuant to this subchapter an intent to furnish in the future
20institutional health services similar to the new institutional
21health service proposed in the application.
22e. Any other person designated as an affected person by
23rules of the department.
24f. Any payer or third-party payer for health services.
2514. “Institutional health facility” means any of the
26following, without regard to whether the facilities referred
27to are publicly or privately owned or are organized for profit
28or not or whether the facilities are part of or sponsored by a
29health maintenance organization:
30a. A hospital.
31b. A health care facility.
32c. An organized outpatient health facility.
33d. An outpatient surgical facility.
34e. A community mental health facility.
35f. A birth center.
-1- 115. “Institutional health service” means any health service
2furnished in or through institutional health facilities or
3health maintenance organizations, including mobile health
4services.
518. “New institutional health service” or “changed
6institutional health service” means any of the following:
7a. The construction, development, or other establishment of
8a new institutional health facility regardless of ownership.
9b. Relocation of an institutional health facility.
10c. Any capital expenditure, lease, or donation by or
11on behalf of an institutional health facility in excess
12of one five million five hundred thousand dollars within a
13twelve-month period.
14d. A permanent change in the bed capacity, as determined
15by the department, of an institutional health facility. For
16purposes of this paragraph, a change is permanent if it is
17intended to be effective for one year or more.
18e. Any expenditure in excess of five hundred thousand
19dollars by or on behalf of an institutional health facility for
20health services which are or will be offered in or through an
21institutional health facility at a specific time but which were
22not offered on a regular basis in or through that institutional
23health facility within the twelve-month period prior to that
24time.
25f. The deletion of one or more health services, previously
26offered on a regular basis by an institutional health facility
27or health maintenance organization or the relocation of one or
28more health services from one physical facility to another.
29g. Any acquisition by or on behalf of a health care provider
30or a group of health care providers of any piece of replacement
31equipment with a value in excess of one million five hundred
32thousand dollars, whether acquired by purchase, lease, or
33donation.
34h. Any acquisition by or on behalf of a health care provider
35or group of health care providers of any piece of equipment
-2-1with a value in excess of one million five hundred thousand
2dollars, whether acquired by purchase, lease, or donation,
3which results in the offering or development of a health
4service not previously provided. A mobile service provided
5on a contract basis is not considered to have been previously
6provided by a health care provider or group of health care
7providers.
8i. Any acquisition by or on behalf of an institutional
9health facility or a health maintenance organization of any
10piece of replacement equipment with a value in excess of one
11million five hundred thousand dollars, whether acquired by
12purchase, lease, or donation.
13j. Any acquisition by or on behalf of an institutional
14health facility or health maintenance organization of any
15piece of equipment with a value in excess of one million five
16hundred thousand dollars, whether acquired by purchase, lease,
17or donation, which results in the offering or development of
18a health service not previously provided. A mobile service
19provided on a contract basis is not considered to have been
20previously provided by an institutional health facility.
21k. Any air transportation service for transportation of
22patients or medical personnel offered through an institutional
23health facility at a specific time but which was not offered
24on a regular basis in or through that institutional health
25facility within the twelve-month period prior to the specific
26time.
27l. Any mobile health service with a value in excess of one
28million five hundred thousand dollars.
29m. Any of the following:
30(1) Cardiac catheterization service.
31(2) Open heart surgical service.
32(3) Organ transplantation service.
33(4) Radiation therapy service applying ionizing radiation
34for the treatment of malignant disease using megavoltage
35external beam equipment.
-3-1 Sec. 2. Section 135.61, subsections 2 and 16, Code 2023, are
2amended by striking the subsections.
3 Sec. 3. Section 135.62, subsection 2, paragraphs a, b, and
4c, Code 2023, are amended to read as follows:
5a. Qualifications. The members of the council shall be
6chosen so that the council as a whole is broadly representative
7of various geographical areas of the state and no more than
8three of its members are affiliated with the same political
9party. Each council member shall be a person who has
10demonstrated by prior activities an informed concern for the
11planning and delivery of health services. A member of the
12council and any spouse of a member shall not, during the
13time that member is serving on the council, do either of the
14following:
15(1) Be a health care provider nor be otherwise directly or
16indirectly engaged in the delivery of health care services nor
17have a material financial interest in the providing or delivery
18of health services.
19(2) Serve as a member of any board or other policymaking
20or advisory body of an institutional health facility, a health
21maintenance organization, or any health or hospital insurer.
22b. Appointments. Terms of council members shall be six
23 three years, beginning and ending as provided in section
2469.19. A member shall be appointed in each odd-numbered
25year to succeed each member whose term expires in that year.
26Vacancies shall be filled by the governor for the balance of
27the unexpired term. Each appointment to the council is subject
28to confirmation by the senate. A council member is ineligible
29for appointment to a second consecutive term, unless first
30appointed to an unexpired term of three years or less.
31c. Chairperson. The governor council shall designate one
32of the council members as chairperson. That designation may
33be changed not later than July 1 of any odd-numbered year,
34effective on the date of the organizational meeting held in
35that year under paragraph “d”.
-4-1 Sec. 4. Section 135.63, subsection 1, Code 2023, is amended
2to read as follows:
31. A new institutional health service or changed
4institutional health service shall not be offered or developed
5in this state without prior application to the department
6for and receipt of a certificate of need, pursuant to
7this subchapter. The application shall be made upon forms
8furnished or prescribed by the department and shall contain
9such information as the department may require under this
10subchapter. The application shall be accompanied by an
11economic impact statement that includes information specified
12by rule to assist the department and the council in the
13evaluation of the application pursuant to section 135.64.
14 The application shall be accompanied by a fee equivalent to
15three-tenths of one percent of the anticipated cost of the
16project with a minimum fee of six hundred dollars and a maximum
17fee of twenty-one of one thousand dollars. The fee shall be
18remitted by the department to the treasurer of state, who shall
19place it in the general fund of the state. If an application
20is voluntarily withdrawn within thirty calendar days after
21submission, seventy-five percent of the application fee shall
22be refunded; if the application is voluntarily withdrawn more
23than thirty but within sixty days after submission, fifty
24percent of the application fee shall be refunded; if the
25application is withdrawn voluntarily more than sixty days
26after submission, twenty-five percent of the application fee
27shall be refunded. Notwithstanding the required payment of
28an application fee under this subsection, an applicant for a
29new institutional health service or a changed institutional
30health service offered or developed by an intermediate care
31facility for persons with an intellectual disability or an
32intermediate care facility for persons with mental illness as
33defined pursuant to section 135C.1 is exempt from payment of
34the application fee.
35 Sec. 5. Section 135.63, subsection 2, paragraphs a and e,
-5-1Code 2023, are amended to read as follows:
2a. Private offices and private clinics of an individual
3physician, dentist, or other practitioner or group of
4health care providers, except as provided by section 135.61,
5subsection 18, paragraphs “g”, “h”, and “m”, and section 135.61,
6subsections 20 and 21.
7e. A health maintenance organization or combination of
8health maintenance organizations or an institutional health
9facility controlled directly or indirectly by a health
10maintenance organization or combination of health maintenance
11organizations, except when the health maintenance organization
12or combination of health maintenance organizations does any of
13the following:
14(1) Constructs constructs, develops, renovates, relocates,
15or otherwise establishes an institutional health facility.
16(2) Acquires major medical equipment as provided by section
17135.61, subsection 18, paragraphs “i” and “j”.
18 Sec. 6. Section 135.63, subsection 2, paragraph h, Code
192023, is amended by striking the paragraph.
20 Sec. 7. Section 135.63, subsection 4, unnumbered paragraph
211, Code 2023, is amended to read as follows:
22A copy of the application shall be sent to the department
23of human services at the time the application is submitted to
24the Iowa department of public health. The department shall not
25process applications for and the council shall not consider a
26new or changed institutional health service for an intermediate
27care facility for persons with an intellectual disability
28unless both of the following conditions are met:
29 Sec. 8. Section 135.66, subsections 1 and 2, Code 2023, are
30amended to read as follows:
311. a. Within fifteen business days after receipt of an
32application for a certificate of need, the department shall
33examine the application for form and completeness and accept
34or reject it. An application shall be rejected only if it
35fails to provide all information required by the department
-6-1pursuant to section 135.63, subsection 1. The department shall
2promptly return to the applicant any rejected application, with
3an explanation of the reasons for its rejection.
4b. Within thirty days after notifying the applicant of
5rejection of the application, the applicant may resubmit a
6revised application for review under this subsection and shall
7not be subject to payment of another required application
8fee pursuant to section 135.63. If a subsequent rejection
9is issued, the applicant shall resubmit the application in
10accordance with and shall be subject to the procedure and
11requirements for an initial application.
122. Upon acceptance of an application for a certificate
13of need, the department shall promptly undertake to notify
14all affected persons in writing that formal review of the
15application has been initiated. Notification to those affected
16persons who are consumers or third-party payers or other
17payers for health services may be provided by distribution of
18the pertinent information to the news media by an electronic
19distribution method available to the department.
20 Sec. 9. Section 135.67, subsection 1, Code 2023, is amended
21to read as follows:
221. The department may waive the letter of intent procedures
23prescribed by section 135.65 and substitute conduct a summary
24review procedure, which shall be established by rules of the
25department, when it accepts an application for a certificate of
26need for a project which meets any of the following criteria
27in paragraphs “a” through “e”:
28a. A project which is limited to repair or replacement of a
29facility or equipment damaged or destroyed by a disaster, and
30which will not expand the facility nor increase the services
31provided beyond the level existing prior to the disaster.
32b. A project necessary to enable the facility or service to
33achieve or maintain compliance with federal, state, or other
34appropriate licensing, certification, or safety requirements.
35c. A project which will not change the existing bed capacity
-7-1of the applicant’s facility or service, as determined by the
2department, by more than ten percent or ten beds, whichever is
3less, over a two-year period.
4d. A project the total cost of which will not exceed one
5hundred fifty thousand dollars.
6e. d. Any other project for which the applicant proposes
7and the department agrees to summary review.
8 Sec. 10. Section 135.69, Code 2023, is amended to read as
9follows:
10135.69 Council to make final decision.
111. The department shall complete its formal review of
12the application within ninety thirty days after acceptance
13of the application, except as otherwise provided by section
14135.72, subsection 4. Upon completion of the formal review,
15the council shall approve or deny the application. The council
16shall issue written findings stating the basis for its decision
17on the application, and the department shall send copies of
18the council’s decision and the written findings supporting
19the decision to the applicant and to any other person who so
20requests.
212. Failure by the council to issue a written decision on an
22application for a certificate of need within the time required
23by this section shall constitute denial approval of and final
24administrative action on the application.
25 Sec. 11. Section 135.72, subsection 4, Code 2023, is amended
26to read as follows:
274. Criteria for determining when it is not feasible to
28complete formal review of an application for a certificate of
29need within the time limits specified in section 135.69. The
30rules adopted under this subsection shall include criteria for
31determining whether an application proposes introduction of
32technologically innovative equipment, and if so, procedures
33to be followed in reviewing the application. However, a rule
34adopted under this subsection shall not permit a deferral of
35more than sixty thirty days beyond the time when a decision is
-8-1required under section 135.69, unless both the applicant and
2the department agree to a longer deferment.
3 Sec. 12. Section 135.73, subsection 1, Code 2023, is amended
4to read as follows:
51. Any party constructing a new institutional health
6facility or an addition to or renovation of an existing
7institutional health facility without first obtaining a
8certificate of need or, in the case of a mobile health service,
9ascertaining that the mobile health service has received
10certificate of need approval, as required by this subchapter,
11shall be denied licensure or change of licensure by the
12appropriate responsible licensing agency of this state.
13 Sec. 13. Section 135.131, subsection 1, paragraph a, Code
142023, is amended to read as follows:
15a. “Birth center” means birth center as defined in section
16135.61 a facility or institution, which is not an ambulatory
17surgical center or a hospital or in a hospital, in which
18births are planned to occur following a normal, uncomplicated,
19low-risk pregnancy.
20 Sec. 14. Section 135P.1, Code 2023, is amended to read as
21follows:
22135P.1 Definitions.
23For the purposes of this chapter, unless the context
24otherwise requires:
251. “Adverse health care incident” means an objective and
26definable outcome arising from or related to patient care that
27results in the death or physical injury of a patient.
282. “Health care provider” means a physician or osteopathic
29physician licensed under chapter 148, a physician assistant
30licensed and practicing under a supervising physician pursuant
31to chapter 148C, a podiatrist licensed under chapter 149, a
32chiropractor licensed under chapter 151, a licensed practical
33nurse, a registered nurse, or an advanced registered nurse
34practitioner licensed under chapter 152 or 152E, a dentist
35licensed under chapter 153, an optometrist licensed under
-9-1chapter 154, a pharmacist licensed under chapter 155A, or
2any other person who is licensed, certified, or otherwise
3authorized or permitted by the law of this state to administer
4health care in the ordinary course of business or in the
5practice of a profession.
63. “Health facility” means an institutional health facility
7as defined in section 135.61, a hospice licensed under chapter
8135J, a home health agency as defined in section 144D.1, an
9assisted living program certified under chapter 231C, a clinic,
10a community health center, or the university of Iowa hospitals
11and clinics, and includes any corporation, professional
12corporation, partnership, limited liability company, limited
13liability partnership, or other entity comprised of such health
14facilities.
154. “Institutional health facility” means any of the
16following, without regard to whether the facilities referred
17to are publicly or privately owned or are organized for profit
18or not, or whether the facilities are part of or sponsored by a
19health maintenance organization:
20a. A hospital.
21b. A health care facility.
22c. An organized outpatient health facility.
23d. An outpatient surgical facility.
24e. A community mental health facility.
25f. A birth center.
264. 5. “Open discussion” means all communications that are
27made under section 135P.3, and includes all memoranda, work
28products, documents, and other materials that are prepared
29for or submitted in the course of or in connection with
30communications under section 135P.3.
315. 6. “Patient” means a person who receives medical care
32from a health care provider, or if the person is a minor,
33deceased, or incapacitated, the person’s legal representative.
34 Sec. 15. REPEAL. Section 135.65, Code 2023, is repealed.
35EXPLANATION
-10-1The inclusion of this explanation does not constitute agreement with
2the explanation’s substance by the members of the general assembly.
3This bill relates to the health facilities council (HFC) and
4the certificate of need (CON) process.
5The bill amends the definition of “affected person” with
6respect to an application for CON to eliminate from inclusion
7in the definition each institutional health facility or
8health maintenance organization which, prior to receipt of
9the application, has formally indicated an intent to furnish
10in the future institutional health services similar to the
11new institutional health service proposed in the application;
12any other person designated as an affected person by rules of
13the department; and any payer or third-party payer for health
14services.
15The bill amends the definition of “institutional health
16facility” by removing a “community mental health facility”
17and a “birth center” from inclusion in the definition,
18thereby making these facilities and centers exempt from CON
19requirements.
20The bill amends the definition of “new institutional
21health service” or “changed institutional health service”
22by striking many of the services included in current Code
23and only including: the construction, development, or other
24establishment of a new institutional health facility regardless
25of ownership; relocation of an institutional health facility;
26any capital expenditure, lease, or donation by or on behalf of
27an institutional health facility in excess of $5 million within
28a 12-month period, and a permanent change (effective for one
29year or more) in the bed capacity of an institutional health
30facility. Under the bill, only these services included in the
31definition are subject to CON requirements.
32The bill eliminates terms defined and references to these
33terms under the Code chapter that are no longer necessary due
34to provisions of the bill including the definitions of “birth
35center” and “mobile health service”.
-11- 1The bill amends the qualifications for members of the HFC by
2retaining the requirement that members of the council be chosen
3so that the council as a whole is broadly representative of
4various geographical areas of the state, but eliminating the
5requirements that no more than three members are affiliated
6with the same political party and that each council member be
7a person who has demonstrated by prior activities an informed
8concern for the planning and delivery of health services.
9Code section 69.16 requires that all appointive bodies if
10not otherwise provided by law shall be bipartisan in their
11composition.
12The bill amends HFC member appointment provisions to provide
13that terms of council members shall be three rather than six
14years, and by eliminating the requirements that a member shall
15be appointed in each odd-numbered year to succeed each member
16whose term expires in that year, that vacancies shall be filled
17by the governor for the balance of the unexpired term, and that
18each appointment to the council is subject to confirmation by
19the senate. The bill also removes the provision that a council
20member is ineligible for appointment to a second consecutive
21term, unless first appointed to an unexpired term of three
22years or less.
23With regard to the chairperson of the HFC, the bill provides
24that the council, rather than the governor, shall designate one
25of the council members as chairperson.
26The bill amends the fee requirements relating to the
27application for a CON to provide that instead of a fee
28equivalent to three-tenths of 1 percent of the anticipated
29cost of the project with a minimum fee of $600 and a maximum
30fee of $21,000, the fee is $1,000. The bill retains the
31provision that provides that if an application is voluntarily
32withdrawn within 30 calendar days after submission, 75 percent
33of the application fee shall be refunded, but eliminates
34the proportionate refund of any portion of the fee if the
35application is voluntarily withdrawn beyond that 30-day period.
-12- 1The bill requires that an application be accompanied by an
2economic impact statement that includes information required by
3rule to assist in evaluation of the application.
4Due to the combining of the department of human services
5(DHS) and the department of public health (DPH) into the
6department of health and human services (HHS), the bill
7eliminates the requirement that a copy of the application for
8CON be sent to DHS at the time the application is submitted to
9DPH.
10Current law provides that within 15 business days after
11receipt of an application for a CON, HHS shall examine the
12application and accept or reject it, and that HHS shall
13promptly return to the applicant any rejected application, with
14an explanation of the reasons for its rejection. The bill adds
15a provision that within 30 days after notifying the applicant
16of rejection of the application, the applicant may resubmit
17a revised application for review and shall not be subject to
18payment of another required application fee. Further, if a
19subsequent rejection is issued, the applicant shall resubmit
20the application in accordance with and shall be subject to the
21procedure and requirements for an initial application.
22Current law provides that upon acceptance of an application
23for a CON, HHS shall promptly notify all affected persons
24in writing that formal review of the application has been
25initiated, and that notification to those affected persons who
26are consumers or third-party payers or other payers for health
27services may be provided notification by distribution of the
28pertinent information to the news media. The bill amends this
29provision to eliminate the reference to third-party payers or
30other payers as they are no longer included in the definition
31of affected persons, and provides that notification to affected
32persons who are consumers may be provided by an electronic
33distribution method available to HHS.
34The bill eliminates the letter of intent procedure requiring
35that before applying for a CON, the sponsor of a proposed
-13-1new institutional health service or changed institutional
2health service submit to HHS a letter of intent to offer or
3develop a service requiring a CON, as soon as possible after
4initiation of the applicant’s planning process and not less
5than 30 days before applying for a CON and before substantial
6expenditures to offer or develop the service are made. Under
7this provision, the letter must include a brief description
8of the proposed new or changed service, its location, and its
9estimated cost. If requested by the sponsor, HHS was required
10to make a preliminary review of the letter and inform the
11sponsor of any factors likely to result in denial of a CON. The
12bill also makes a conforming change to eliminate a reference to
13the letter of intent procedure.
14The bill amends the time frames related to the HFC’s review
15of CON applications. The bill requires that HHS shall complete
16its formal review of the application within 30 days, rather
17than the current 90 days, after acceptance of the application.
18The bill also provides that failure by the council to issue a
19written decision on a CON application within the time required
20shall constitute approval rather than the current denial of and
21final administrative action on the application.
22The bill provides that any administrative rule adopted for
23determining when it is not feasible to complete formal review
24of an application for a CON within the time limits specified
25for the HFC’s final decision shall not permit a deferral of
26more than 30 days, rather than the current 60 days, beyond
27the time specified for a decision on the final decision,
28unless both the applicant and the department agree to a longer
29deferment.
-14-pf/rh
2BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 135.61, subsections 1, 14, 15, and 18,
2Code 2023, are amended to read as follows:
31. “Affected persons” means, with respect to an application
4for a certificate of need:
5a. The person submitting the application.
6b. Consumers who would be served by the new institutional
7health service proposed in the application.
8c. Each institutional health facility or health maintenance
9organization which is located in the geographic area which
10would appropriately be served by the new institutional
11health service proposed in the application. The appropriate
12geographic service area of each institutional health facility
13or health maintenance organization shall be determined on a
14uniform basis in accordance with criteria established in rules
15adopted by the department.
16d. Each institutional health facility or health maintenance
17organization which, prior to receipt of the application by
18the department, has formally indicated to the department
19pursuant to this subchapter an intent to furnish in the future
20institutional health services similar to the new institutional
21health service proposed in the application.
22e. Any other person designated as an affected person by
23rules of the department.
24f. Any payer or third-party payer for health services.
2514. “Institutional health facility” means any of the
26following, without regard to whether the facilities referred
27to are publicly or privately owned or are organized for profit
28or not or whether the facilities are part of or sponsored by a
29health maintenance organization:
30a. A hospital.
31b. A health care facility.
32c. An organized outpatient health facility.
33d. An outpatient surgical facility.
34e. A community mental health facility.
35f. A birth center.
-1- 115. “Institutional health service” means any health service
2furnished in or through institutional health facilities or
3health maintenance organizations, including mobile health
4services.
518. “New institutional health service” or “changed
6institutional health service” means any of the following:
7a. The construction, development, or other establishment of
8a new institutional health facility regardless of ownership.
9b. Relocation of an institutional health facility.
10c. Any capital expenditure, lease, or donation by or
11on behalf of an institutional health facility in excess
12of one five million five hundred thousand dollars within a
13twelve-month period.
14d. A permanent change in the bed capacity, as determined
15by the department, of an institutional health facility. For
16purposes of this paragraph, a change is permanent if it is
17intended to be effective for one year or more.
18e. Any expenditure in excess of five hundred thousand
19dollars by or on behalf of an institutional health facility for
20health services which are or will be offered in or through an
21institutional health facility at a specific time but which were
22not offered on a regular basis in or through that institutional
23health facility within the twelve-month period prior to that
24time.
25f. The deletion of one or more health services, previously
26offered on a regular basis by an institutional health facility
27or health maintenance organization or the relocation of one or
28more health services from one physical facility to another.
29g. Any acquisition by or on behalf of a health care provider
30or a group of health care providers of any piece of replacement
31equipment with a value in excess of one million five hundred
32thousand dollars, whether acquired by purchase, lease, or
33donation.
34h. Any acquisition by or on behalf of a health care provider
35or group of health care providers of any piece of equipment
-2-1with a value in excess of one million five hundred thousand
2dollars, whether acquired by purchase, lease, or donation,
3which results in the offering or development of a health
4service not previously provided. A mobile service provided
5on a contract basis is not considered to have been previously
6provided by a health care provider or group of health care
7providers.
8i. Any acquisition by or on behalf of an institutional
9health facility or a health maintenance organization of any
10piece of replacement equipment with a value in excess of one
11million five hundred thousand dollars, whether acquired by
12purchase, lease, or donation.
13j. Any acquisition by or on behalf of an institutional
14health facility or health maintenance organization of any
15piece of equipment with a value in excess of one million five
16hundred thousand dollars, whether acquired by purchase, lease,
17or donation, which results in the offering or development of
18a health service not previously provided. A mobile service
19provided on a contract basis is not considered to have been
20previously provided by an institutional health facility.
21k. Any air transportation service for transportation of
22patients or medical personnel offered through an institutional
23health facility at a specific time but which was not offered
24on a regular basis in or through that institutional health
25facility within the twelve-month period prior to the specific
26time.
27l. Any mobile health service with a value in excess of one
28million five hundred thousand dollars.
29m. Any of the following:
30(1) Cardiac catheterization service.
31(2) Open heart surgical service.
32(3) Organ transplantation service.
33(4) Radiation therapy service applying ionizing radiation
34for the treatment of malignant disease using megavoltage
35external beam equipment.
-3-1 Sec. 2. Section 135.61, subsections 2 and 16, Code 2023, are
2amended by striking the subsections.
3 Sec. 3. Section 135.62, subsection 2, paragraphs a, b, and
4c, Code 2023, are amended to read as follows:
5a. Qualifications. The members of the council shall be
6chosen so that the council as a whole is broadly representative
7of various geographical areas of the state and no more than
8three of its members are affiliated with the same political
9party. Each council member shall be a person who has
10demonstrated by prior activities an informed concern for the
11planning and delivery of health services. A member of the
12council and any spouse of a member shall not, during the
13time that member is serving on the council, do either of the
14following:
15(1) Be a health care provider nor be otherwise directly or
16indirectly engaged in the delivery of health care services nor
17have a material financial interest in the providing or delivery
18of health services.
19(2) Serve as a member of any board or other policymaking
20or advisory body of an institutional health facility, a health
21maintenance organization, or any health or hospital insurer.
22b. Appointments. Terms of council members shall be six
23 three years, beginning and ending as provided in section
2469.19. A member shall be appointed in each odd-numbered
25year to succeed each member whose term expires in that year.
26Vacancies shall be filled by the governor for the balance of
27the unexpired term. Each appointment to the council is subject
28to confirmation by the senate. A council member is ineligible
29for appointment to a second consecutive term, unless first
30appointed to an unexpired term of three years or less.
31c. Chairperson. The governor council shall designate one
32of the council members as chairperson. That designation may
33be changed not later than July 1 of any odd-numbered year,
34effective on the date of the organizational meeting held in
35that year under paragraph “d”.
-4-1 Sec. 4. Section 135.63, subsection 1, Code 2023, is amended
2to read as follows:
31. A new institutional health service or changed
4institutional health service shall not be offered or developed
5in this state without prior application to the department
6for and receipt of a certificate of need, pursuant to
7this subchapter. The application shall be made upon forms
8furnished or prescribed by the department and shall contain
9such information as the department may require under this
10subchapter. The application shall be accompanied by an
11economic impact statement that includes information specified
12by rule to assist the department and the council in the
13evaluation of the application pursuant to section 135.64.
14 The application shall be accompanied by a fee equivalent to
15three-tenths of one percent of the anticipated cost of the
16project with a minimum fee of six hundred dollars and a maximum
17fee of twenty-one of one thousand dollars. The fee shall be
18remitted by the department to the treasurer of state, who shall
19place it in the general fund of the state. If an application
20is voluntarily withdrawn within thirty calendar days after
21submission, seventy-five percent of the application fee shall
22be refunded; if the application is voluntarily withdrawn more
23than thirty but within sixty days after submission, fifty
24percent of the application fee shall be refunded; if the
25application is withdrawn voluntarily more than sixty days
26after submission, twenty-five percent of the application fee
27shall be refunded. Notwithstanding the required payment of
28an application fee under this subsection, an applicant for a
29new institutional health service or a changed institutional
30health service offered or developed by an intermediate care
31facility for persons with an intellectual disability or an
32intermediate care facility for persons with mental illness as
33defined pursuant to section 135C.1 is exempt from payment of
34the application fee.
35 Sec. 5. Section 135.63, subsection 2, paragraphs a and e,
-5-1Code 2023, are amended to read as follows:
2a. Private offices and private clinics of an individual
3physician, dentist, or other practitioner or group of
4health care providers, except as provided by section 135.61,
5subsection 18, paragraphs “g”, “h”, and “m”, and section 135.61,
6subsections 20 and 21.
7e. A health maintenance organization or combination of
8health maintenance organizations or an institutional health
9facility controlled directly or indirectly by a health
10maintenance organization or combination of health maintenance
11organizations, except when the health maintenance organization
12or combination of health maintenance organizations does any of
13the following:
14(1) Constructs constructs, develops, renovates, relocates,
15or otherwise establishes an institutional health facility.
16(2) Acquires major medical equipment as provided by section
17135.61, subsection 18, paragraphs “i” and “j”.
18 Sec. 6. Section 135.63, subsection 2, paragraph h, Code
192023, is amended by striking the paragraph.
20 Sec. 7. Section 135.63, subsection 4, unnumbered paragraph
211, Code 2023, is amended to read as follows:
22A copy of the application shall be sent to the department
23of human services at the time the application is submitted to
24the Iowa department of public health. The department shall not
25process applications for and the council shall not consider a
26new or changed institutional health service for an intermediate
27care facility for persons with an intellectual disability
28unless both of the following conditions are met:
29 Sec. 8. Section 135.66, subsections 1 and 2, Code 2023, are
30amended to read as follows:
311. a. Within fifteen business days after receipt of an
32application for a certificate of need, the department shall
33examine the application for form and completeness and accept
34or reject it. An application shall be rejected only if it
35fails to provide all information required by the department
-6-1pursuant to section 135.63, subsection 1. The department shall
2promptly return to the applicant any rejected application, with
3an explanation of the reasons for its rejection.
4b. Within thirty days after notifying the applicant of
5rejection of the application, the applicant may resubmit a
6revised application for review under this subsection and shall
7not be subject to payment of another required application
8fee pursuant to section 135.63. If a subsequent rejection
9is issued, the applicant shall resubmit the application in
10accordance with and shall be subject to the procedure and
11requirements for an initial application.
122. Upon acceptance of an application for a certificate
13of need, the department shall promptly undertake to notify
14all affected persons in writing that formal review of the
15application has been initiated. Notification to those affected
16persons who are consumers or third-party payers or other
17payers for health services may be provided by distribution of
18the pertinent information to the news media by an electronic
19distribution method available to the department.
20 Sec. 9. Section 135.67, subsection 1, Code 2023, is amended
21to read as follows:
221. The department may waive the letter of intent procedures
23prescribed by section 135.65 and substitute conduct a summary
24review procedure, which shall be established by rules of the
25department, when it accepts an application for a certificate of
26need for a project which meets any of the following criteria
27in paragraphs “a” through “e”:
28a. A project which is limited to repair or replacement of a
29facility or equipment damaged or destroyed by a disaster, and
30which will not expand the facility nor increase the services
31provided beyond the level existing prior to the disaster.
32b. A project necessary to enable the facility or service to
33achieve or maintain compliance with federal, state, or other
34appropriate licensing, certification, or safety requirements.
35c. A project which will not change the existing bed capacity
-7-1of the applicant’s facility or service, as determined by the
2department, by more than ten percent or ten beds, whichever is
3less, over a two-year period.
4d. A project the total cost of which will not exceed one
5hundred fifty thousand dollars.
6e. d. Any other project for which the applicant proposes
7and the department agrees to summary review.
8 Sec. 10. Section 135.69, Code 2023, is amended to read as
9follows:
10135.69 Council to make final decision.
111. The department shall complete its formal review of
12the application within ninety thirty days after acceptance
13of the application, except as otherwise provided by section
14135.72, subsection 4. Upon completion of the formal review,
15the council shall approve or deny the application. The council
16shall issue written findings stating the basis for its decision
17on the application, and the department shall send copies of
18the council’s decision and the written findings supporting
19the decision to the applicant and to any other person who so
20requests.
212. Failure by the council to issue a written decision on an
22application for a certificate of need within the time required
23by this section shall constitute denial approval of and final
24administrative action on the application.
25 Sec. 11. Section 135.72, subsection 4, Code 2023, is amended
26to read as follows:
274. Criteria for determining when it is not feasible to
28complete formal review of an application for a certificate of
29need within the time limits specified in section 135.69. The
30rules adopted under this subsection shall include criteria for
31determining whether an application proposes introduction of
32technologically innovative equipment, and if so, procedures
33to be followed in reviewing the application. However, a rule
34adopted under this subsection shall not permit a deferral of
35more than sixty thirty days beyond the time when a decision is
-8-1required under section 135.69, unless both the applicant and
2the department agree to a longer deferment.
3 Sec. 12. Section 135.73, subsection 1, Code 2023, is amended
4to read as follows:
51. Any party constructing a new institutional health
6facility or an addition to or renovation of an existing
7institutional health facility without first obtaining a
8certificate of need or, in the case of a mobile health service,
9ascertaining that the mobile health service has received
10certificate of need approval, as required by this subchapter,
11shall be denied licensure or change of licensure by the
12appropriate responsible licensing agency of this state.
13 Sec. 13. Section 135.131, subsection 1, paragraph a, Code
142023, is amended to read as follows:
15a. “Birth center” means birth center as defined in section
16135.61 a facility or institution, which is not an ambulatory
17surgical center or a hospital or in a hospital, in which
18births are planned to occur following a normal, uncomplicated,
19low-risk pregnancy.
20 Sec. 14. Section 135P.1, Code 2023, is amended to read as
21follows:
22135P.1 Definitions.
23For the purposes of this chapter, unless the context
24otherwise requires:
251. “Adverse health care incident” means an objective and
26definable outcome arising from or related to patient care that
27results in the death or physical injury of a patient.
282. “Health care provider” means a physician or osteopathic
29physician licensed under chapter 148, a physician assistant
30licensed and practicing under a supervising physician pursuant
31to chapter 148C, a podiatrist licensed under chapter 149, a
32chiropractor licensed under chapter 151, a licensed practical
33nurse, a registered nurse, or an advanced registered nurse
34practitioner licensed under chapter 152 or 152E, a dentist
35licensed under chapter 153, an optometrist licensed under
-9-1chapter 154, a pharmacist licensed under chapter 155A, or
2any other person who is licensed, certified, or otherwise
3authorized or permitted by the law of this state to administer
4health care in the ordinary course of business or in the
5practice of a profession.
63. “Health facility” means an institutional health facility
7as defined in section 135.61, a hospice licensed under chapter
8135J, a home health agency as defined in section 144D.1, an
9assisted living program certified under chapter 231C, a clinic,
10a community health center, or the university of Iowa hospitals
11and clinics, and includes any corporation, professional
12corporation, partnership, limited liability company, limited
13liability partnership, or other entity comprised of such health
14facilities.
154. “Institutional health facility” means any of the
16following, without regard to whether the facilities referred
17to are publicly or privately owned or are organized for profit
18or not, or whether the facilities are part of or sponsored by a
19health maintenance organization:
20a. A hospital.
21b. A health care facility.
22c. An organized outpatient health facility.
23d. An outpatient surgical facility.
24e. A community mental health facility.
25f. A birth center.
264. 5. “Open discussion” means all communications that are
27made under section 135P.3, and includes all memoranda, work
28products, documents, and other materials that are prepared
29for or submitted in the course of or in connection with
30communications under section 135P.3.
315. 6. “Patient” means a person who receives medical care
32from a health care provider, or if the person is a minor,
33deceased, or incapacitated, the person’s legal representative.
34 Sec. 15. REPEAL. Section 135.65, Code 2023, is repealed.
35EXPLANATION
-10-1The inclusion of this explanation does not constitute agreement with
2the explanation’s substance by the members of the general assembly.
3This bill relates to the health facilities council (HFC) and
4the certificate of need (CON) process.
5The bill amends the definition of “affected person” with
6respect to an application for CON to eliminate from inclusion
7in the definition each institutional health facility or
8health maintenance organization which, prior to receipt of
9the application, has formally indicated an intent to furnish
10in the future institutional health services similar to the
11new institutional health service proposed in the application;
12any other person designated as an affected person by rules of
13the department; and any payer or third-party payer for health
14services.
15The bill amends the definition of “institutional health
16facility” by removing a “community mental health facility”
17and a “birth center” from inclusion in the definition,
18thereby making these facilities and centers exempt from CON
19requirements.
20The bill amends the definition of “new institutional
21health service” or “changed institutional health service”
22by striking many of the services included in current Code
23and only including: the construction, development, or other
24establishment of a new institutional health facility regardless
25of ownership; relocation of an institutional health facility;
26any capital expenditure, lease, or donation by or on behalf of
27an institutional health facility in excess of $5 million within
28a 12-month period, and a permanent change (effective for one
29year or more) in the bed capacity of an institutional health
30facility. Under the bill, only these services included in the
31definition are subject to CON requirements.
32The bill eliminates terms defined and references to these
33terms under the Code chapter that are no longer necessary due
34to provisions of the bill including the definitions of “birth
35center” and “mobile health service”.
-11- 1The bill amends the qualifications for members of the HFC by
2retaining the requirement that members of the council be chosen
3so that the council as a whole is broadly representative of
4various geographical areas of the state, but eliminating the
5requirements that no more than three members are affiliated
6with the same political party and that each council member be
7a person who has demonstrated by prior activities an informed
8concern for the planning and delivery of health services.
9Code section 69.16 requires that all appointive bodies if
10not otherwise provided by law shall be bipartisan in their
11composition.
12The bill amends HFC member appointment provisions to provide
13that terms of council members shall be three rather than six
14years, and by eliminating the requirements that a member shall
15be appointed in each odd-numbered year to succeed each member
16whose term expires in that year, that vacancies shall be filled
17by the governor for the balance of the unexpired term, and that
18each appointment to the council is subject to confirmation by
19the senate. The bill also removes the provision that a council
20member is ineligible for appointment to a second consecutive
21term, unless first appointed to an unexpired term of three
22years or less.
23With regard to the chairperson of the HFC, the bill provides
24that the council, rather than the governor, shall designate one
25of the council members as chairperson.
26The bill amends the fee requirements relating to the
27application for a CON to provide that instead of a fee
28equivalent to three-tenths of 1 percent of the anticipated
29cost of the project with a minimum fee of $600 and a maximum
30fee of $21,000, the fee is $1,000. The bill retains the
31provision that provides that if an application is voluntarily
32withdrawn within 30 calendar days after submission, 75 percent
33of the application fee shall be refunded, but eliminates
34the proportionate refund of any portion of the fee if the
35application is voluntarily withdrawn beyond that 30-day period.
-12- 1The bill requires that an application be accompanied by an
2economic impact statement that includes information required by
3rule to assist in evaluation of the application.
4Due to the combining of the department of human services
5(DHS) and the department of public health (DPH) into the
6department of health and human services (HHS), the bill
7eliminates the requirement that a copy of the application for
8CON be sent to DHS at the time the application is submitted to
9DPH.
10Current law provides that within 15 business days after
11receipt of an application for a CON, HHS shall examine the
12application and accept or reject it, and that HHS shall
13promptly return to the applicant any rejected application, with
14an explanation of the reasons for its rejection. The bill adds
15a provision that within 30 days after notifying the applicant
16of rejection of the application, the applicant may resubmit
17a revised application for review and shall not be subject to
18payment of another required application fee. Further, if a
19subsequent rejection is issued, the applicant shall resubmit
20the application in accordance with and shall be subject to the
21procedure and requirements for an initial application.
22Current law provides that upon acceptance of an application
23for a CON, HHS shall promptly notify all affected persons
24in writing that formal review of the application has been
25initiated, and that notification to those affected persons who
26are consumers or third-party payers or other payers for health
27services may be provided notification by distribution of the
28pertinent information to the news media. The bill amends this
29provision to eliminate the reference to third-party payers or
30other payers as they are no longer included in the definition
31of affected persons, and provides that notification to affected
32persons who are consumers may be provided by an electronic
33distribution method available to HHS.
34The bill eliminates the letter of intent procedure requiring
35that before applying for a CON, the sponsor of a proposed
-13-1new institutional health service or changed institutional
2health service submit to HHS a letter of intent to offer or
3develop a service requiring a CON, as soon as possible after
4initiation of the applicant’s planning process and not less
5than 30 days before applying for a CON and before substantial
6expenditures to offer or develop the service are made. Under
7this provision, the letter must include a brief description
8of the proposed new or changed service, its location, and its
9estimated cost. If requested by the sponsor, HHS was required
10to make a preliminary review of the letter and inform the
11sponsor of any factors likely to result in denial of a CON. The
12bill also makes a conforming change to eliminate a reference to
13the letter of intent procedure.
14The bill amends the time frames related to the HFC’s review
15of CON applications. The bill requires that HHS shall complete
16its formal review of the application within 30 days, rather
17than the current 90 days, after acceptance of the application.
18The bill also provides that failure by the council to issue a
19written decision on a CON application within the time required
20shall constitute approval rather than the current denial of and
21final administrative action on the application.
22The bill provides that any administrative rule adopted for
23determining when it is not feasible to complete formal review
24of an application for a CON within the time limits specified
25for the HFC’s final decision shall not permit a deferral of
26more than 30 days, rather than the current 60 days, beyond
27the time specified for a decision on the final decision,
28unless both the applicant and the department agree to a longer
29deferment.
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