This bill establishes a framework for designating specialty hospitals operated by nonprofit organizations in Iowa. A specialty hospital is defined as one that serves individuals aged 30 and younger, with over 60% of its patients receiving medical assistance, specializes in pediatric rehabilitation and behavioral health, has a maximum of 100 inpatient beds, provides outpatient services, and was previously a licensed nursing facility before July 1, 2025. The bill mandates that these hospitals create formal criteria for patient admission, discharge, and care continuation based on objective medical standards.

Additionally, the bill outlines the responsibilities of the Department of Health and Human Services (HHS) and the Department of Inspections, Appeals, and Licensing (DIAL) in supporting specialty hospitals. HHS is required to notify these hospitals of significant changes in federal Medicaid reimbursement that could negatively impact them and to collaborate on mitigating such effects. The bill also stipulates that HHS must set reimbursement rates for inpatient care based on the hospital's average allowable per diem costs, adjusted for inflation. Furthermore, DIAL and HHS are tasked with waiving certain regulatory requirements and providing necessary support to ensure that specialty hospitals can operate effectively within the established guidelines.

Statutes affected:
Introduced: 135B.1