Senate File 506 - Reprinted
SENATE FILE 506
BY COMMITTEE ON HEALTH AND
HUMAN SERVICES
(SUCCESSOR TO SSB 1117)
(As Amended and Passed by the Senate March 22, 2023)
A BILL FOR
1 An Act relating to health facilities and health services
2 including licensing and the certificate of need process, and
3 including effective date provisions.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 DIVISION I
2 CERTIFICATE OF NEED —— HEALTH FACILITIES COUNCIL
3 Section 1. Section 68B.35, subsection 2, paragraph e, Code
4 2023, is amended to read as follows:
5 e. Members of the state banking council, the Iowa ethics
6 and campaign disclosure board, the credit union review board,
7 the economic development authority, the employment appeal
8 board, the environmental protection commission, the health
9 facilities council, the Iowa finance authority, the Iowa public
10 employees’ retirement system investment board, the board of
11 the Iowa lottery authority, the natural resource commission,
12 the board of parole, the petroleum underground storage tank
13 fund board, the public employment relations board, the state
14 racing and gaming commission, the state board of regents, the
15 transportation commission, the office of consumer advocate, the
16 utilities board, the Iowa telecommunications and technology
17 commission, and any full-time members of other boards and
18 commissions as defined under section 7E.4 who receive an annual
19 salary for their service on the board or commission. The Iowa
20 ethics and campaign disclosure board shall conduct an annual
21 review to determine if members of any other board, commission,
22 or authority should file a statement and shall require the
23 filing of a statement pursuant to rules adopted pursuant to
24 chapter 17A.
25 Sec. 2. Section 97B.1A, subsection 8, paragraph a,
26 subparagraph (8), Code 2023, is amended to read as follows:
27 (8) Members of the state transportation commission, and the
28 board of parole, and the state health facilities council.
29 Sec. 3. Section 135.61, subsections 1, 14, 15, and 18, Code
30 2023, are amended to read as follows:
31 1. “Affected persons” means, with respect to an application
32 for a certificate of need:
33 a. The person submitting the application.
34 b. Consumers who would be served by the new institutional
35 health service proposed in the application.
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1 c. Each institutional health facility or health maintenance
2 organization which is located in the geographic area which
3 would appropriately be served by the new institutional
4 health service proposed in the application. The appropriate
5 geographic service area of each institutional health facility
6 or health maintenance organization shall be determined on a
7 uniform basis in accordance with criteria established in rules
8 adopted by the department.
9 d. Each institutional health facility or health maintenance
10 organization which, prior to receipt of the application by
11 the department, has formally indicated to the department
12 pursuant to this subchapter an intent to furnish in the future
13 institutional health services similar to the new institutional
14 health service proposed in the application.
15 e. Any other person designated as an affected person by
16 rules of the department.
17 f. Any payer or third-party payer for health services.
18 14. “Institutional health facility” means any of the
19 following, without regard to whether the facilities referred
20 to are publicly or privately owned or are organized for profit
21 or not or whether the facilities are part of or sponsored by a
22 health maintenance organization:
23 a. A hospital.
24 b. A health care facility.
25 c. An organized outpatient health facility.
26 d. c. An outpatient surgical facility.
27 e. A community mental health facility.
28 f. A birth center.
29 15. “Institutional health service” means any health service
30 furnished in or through institutional health facilities or
31 health maintenance organizations, including mobile health
32 services.
33 18. “New institutional health service” or “changed
34 institutional health service” means any of the following:
35 a. The construction, development, or other establishment of
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1 a new institutional health facility regardless of ownership, in
2 excess of the following amounts, as applicable:
3 (1) Beginning January 1, 2023, three million five hundred
4 thousand dollars.
5 (2) Beginning January 1, 2028, four million dollars.
6 (3) Beginning January 1, 2033, four million five hundred
7 thousand dollars.
8 (4) Beginning January 1, 2038, five million dollars.
9 b. Relocation of an institutional health facility.
10 c. Any capital expenditure, lease, or donation by or on
11 behalf of expenditure or lease by an institutional health
12 facility in excess of one million five hundred thousand dollars
13 the following amounts, as applicable, within a twelve-month
14 period.:
15 (1) Beginning January 1, 2023, three million five hundred
16 thousand dollars.
17 (2) Beginning January 1, 2028, four million dollars.
18 (3) Beginning January 1, 2033, four million five hundred
19 thousand dollars.
20 (4) Beginning January 1, 2038, five million dollars.
21 d. A permanent change in the bed capacity, as determined
22 by the department, of an institutional health facility. For
23 purposes of this paragraph, a change is permanent if it is
24 intended to be effective for one year or more.
25 e. Any expenditure in excess of five hundred thousand
26 dollars by or on behalf of an institutional health facility for
27 health services which are or will be offered in or through an
28 institutional health facility at a specific time but which were
29 not offered on a regular basis in or through that institutional
30 health facility within the twelve-month period prior to that
31 time.
32 f. The deletion of one or more health services, previously
33 offered on a regular basis by an institutional health facility
34 or health maintenance organization or the relocation of one or
35 more health services from one physical facility to another.
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1 g. Any acquisition by or on behalf of a health care provider
2 or a group of health care providers of any piece of replacement
3 equipment with a value in excess of one million five hundred
4 thousand dollars, whether acquired by purchase, lease, or
5 donation.
6 h. Any acquisition by or on behalf of a health care provider
7 or group of health care providers of any piece of equipment
8 with a value in excess of one million five hundred thousand
9 dollars, whether acquired by purchase, lease, or donation,
10 which results in the offering or development of a health
11 service not previously provided. A mobile service provided
12 on a contract basis is not considered to have been previously
13 provided by a health care provider or group of health care
14 providers.
15 i. Any acquisition by or on behalf of an institutional
16 health facility or a health maintenance organization of any
17 piece of replacement equipment with a value in excess of one
18 million five hundred thousand dollars, whether acquired by
19 purchase, lease, or donation.
20 j. Any acquisition by or on behalf of an institutional
21 health facility or health maintenance organization of any
22 piece of equipment with a value in excess of one million five
23 hundred thousand dollars, whether acquired by purchase, lease,
24 or donation, which results in the offering or development of
25 a health service not previously provided. A mobile service
26 provided on a contract basis is not considered to have been
27 previously provided by an institutional health facility.
28 k. Any air transportation service for transportation of
29 patients or medical personnel offered through an institutional
30 health facility at a specific time but which was not offered
31 on a regular basis in or through that institutional health
32 facility within the twelve-month period prior to the specific
33 time.
34 l. Any mobile health service with a value in excess of one
35 million five hundred thousand dollars.
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1 m. Any of the following:
2 (1) Cardiac catheterization service.
3 (2) Open heart surgical service.
4 (3) Organ transplantation service.
5 (4) Radiation therapy service applying ionizing radiation
6 for the treatment of malignant disease using megavoltage
7 external beam equipment.
8 Sec. 4. Section 135.61, subsections 2, 4, 5, 7, 16, and 20,
9 Code 2023, are amended by striking the subsections.
10 Sec. 5. Section 135.62, Code 2023, is amended to read as
11 follows:
12 135.62 Department to administer subchapter —— health
13 facilities council established —— appointments —— powers and
14 duties.
15 1. This subchapter shall be administered by the department.
16 The director shall employ or cause to be employed the necessary
17 persons to discharge the duties imposed on the department by
18 this subchapter.
19 2. There is established a state health facilities council
20 consisting of five persons appointed by the governor. The
21 council shall be within the department for administrative and
22 budgetary purposes.
23 a. Qualifications. The members of the council shall be
24 chosen so that the council as a whole is broadly representative
25 of various geographical areas of the state and no more than
26 three of its members are affiliated with the same political
27 party. Each council member shall be a person who has
28 demonstrated by prior activities an informed concern for the
29 planning and delivery of health services. A member of the
30 council and any spouse of a member shall not, during the
31 time that member is serving on the council, do either of the
32 following:
33 (1) Be a health care provider nor be otherwise directly or
34 indirectly engaged in the delivery of health care services nor
35 have a material financial interest in the providing or delivery
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1 of health services.
2 (2) Serve as a member of any board or other policymaking
3 or advisory body of an institutional health facility, a health
4 maintenance organization, or any health or hospital insurer.
5 b. Appointments. Terms of council members shall be six
6 years, beginning and ending as provided in section 69.19. A
7 member shall be appointed in each odd-numbered year to succeed
8 each member whose term expires in that year. Vacancies
9 shall be filled by the governor for the balance of the
10 unexpired term. Each appointment to the council is subject to
11 confirmation by the senate. A council member is ineligible
12 for appointment to a second consecutive term, unless first
13 appointed to an unexpired term of three years or less.
14 c. Chairperson. The governor shall designate one of
15 the council members as chairperson. That designation may
16 be changed not later than July 1 of any odd-numbered year,
17 effective on the date of the organizational meeting held in
18 that year under paragraph “d”.
19 d. Meetings. The council shall hold an organizational
20 meeting in July of each odd-numbered year, or as soon
21 thereafter as the new appointee or appointees are confirmed
22 and have qualified. Other meetings shall be held as necessary
23 to enable the council to expeditiously discharge its duties.
24 Meeting dates shall be set upon adjournment or by call of the
25 chairperson upon five days’ notice to the other members.
26 e. 2. Duties. The council department shall do all of the
27 following:
28 (1) a. Make the final decision, as required by section
29 135.69, with respect to each application for a certificate of
30 need accepted by the department.
31 (2) b. Determine and adopt such policies as are authorized
32 by law and are deemed necessary to the efficient discharge of
33 its the department’s duties under this subchapter.
34 (3) c. Have authority to direct staff personnel of the
35 department assigned to conduct formal or summary reviews of
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1 applications for certificates of need.
2 (4) d. Advise and counsel with the director concerning the
3 provisions of this subchapter and the policies and procedures
4 adopted by the department pursuant to this subchapter.
5 (5) Review and approve, prior to promulgation, all rules
6 adopted by the department under this subchapter.
7 Sec. 6. Section 135.63, subsection 1, Code 2023, is amended
8 to read as follows:
9 1. A new institutional health service or changed
10 institutional health service shall not be offered or developed
11 in this state without prior application to the department
12 for and receipt of a certificate of need, pursuant to
13 this subchapter. The application shall be made upon forms
14 furnished or prescribed by the department and shall contain
15 such information as the department may require under this
16 subchapter. The application shall be accompanied by an
17 economic impact statement that includes information specified
18 by rule to assist the department in the evaluation of the
19 application pursuant to section 135.64. The application shall
20 be accompanied by a fee equivalent to three-tenths of one
21 percent of the anticipated cost of the project with a minimum
22 fee of six hundred dollars and a maximum fee of twenty-one
23 thousand dollars. The fee shall be remitted by the department
24 to the treasurer of state, who shall place it in the general
25 fund of the state. If an application is voluntarily withdrawn
26 within thirty calendar days after submission, seventy-five
27 percent of the application fee shall be refunded; if the
28 application is voluntarily withdrawn more than thirty but
29 within sixty days after submission, fifty percent of the
30 application fee shall be refunded; if the application is
31 withdrawn voluntarily more than sixty days after submission,
32 twenty-five percent of the application fee shall be refunded.
33 Notwithstanding the required payment of an application fee
34 under this subsection, an applicant for a new institutional
35 health service or a changed institutional health service
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1 offered or developed by an intermediate care facility for
2 persons with an intellectual disability or an intermediate care
3 facility for persons with mental illness as defined pursuant to
4 section 135C.1 is exempt from payment of the application fee.
5 Sec. 7. Section 135.63, subsection 2, paragraphs a and e,
6 Code 2023, are amended to read as follows:
7 a. Private offices and private clinics of an individual
8 physician, dentist, or other practitioner or group of
9 health care providers, except as provided by section 135.61,
10 subsection 18, paragraphs “g”, “h”, and “m”, and section 135.61,
11 subsections 20 and 21.
12 e. A health maintenance organization or combination of
13 health maintenance organizations or an institutional health
14 facility controlled directly or indirectly by a health
15 maintenance organization or combination of health maintenance
16 organizations, except when the health maintenance organization
17 or combination of health maintenance organizations does any of
18 the following:
19 (1) Constructs constructs, develops, renovates, relocates,
20 or otherwise establishes an institutional health facility.
21 (2) Acquires major medical equipment as provided by section
22 135.61, subsection 18, paragraphs “i” and “j”.
23 Sec. 8. Section 135.63, subsection 2, paragraph h, Code
24 2023, is amended by striking the paragraph.
25 Sec. 9. Section 135.63, subsection 4, unnumbered paragraph
26 1, Code 2023, is amended to read as follows:
27 A copy of the application shall be sent to the department
28 of human services at the time the application is submitted to
29 the Iowa department of public health. The department shall not
30 process applications for and the council shall not consider a
31 new or changed institutional health service for an intermediate
32 care faci