Legislative Analysis
Phone: (517) 373-8080
TEMPORARY DELICENSURE OF HOSPITAL BEDS
http://www.house.mi.gov/hfa
House Bill 6380 (proposed substitute H-1) Analysis available at
Sponsor: Rep. Andrew Fink http://www.legislature.mi.gov
Committee: Health Policy
Complete to 11-9-22
SUMMARY:
House Bill 6380 would amend the Public Health Code to allow certain rural emergency
hospitals to apply to temporarily delicense beds. The bill also would require notification to the
Department of Health and Human Services (DHHS) if a hospital applied for designation as a
rural emergency hospital and would eliminate a provision concerning the use of temporarily
delicensed beds to comply with a bed reduction plan.
The bill would require a hospital licensed under Article 17 (Facilities and Agencies) to notify
DHHS if the owner, operator, or governing body of the hospital applies for designation as a
rural emergency hospital. The bill also would allow a rural emergency hospital licensed under
Article 17 located in a nonurbanized area to apply to the Department of Licensing and
Regulatory Affairs (LARA) to temporarily delicense 100% of its licensed beds for up to five
years. (Delicensed beds are unavailable for patient use.)
Rural emergency hospital would mean a hospital designated by the federal Centers for
Medicare and Medicaid Services (CMS) to offer rural emergency hospital services.
Rural emergency hospital services would mean that term as defined under federal law
(42 USC 1395x). 1
In addition, the bill would remove a provision prohibiting a hospital that has beds subject to a
hospital bed reduction plan or to a LARA action to enforce Article 17 from using beds
temporarily delicensed to comply with the bed reduction plan.
MCL 333.21501, 333.21513, and 333.21551
FISCAL IMPACT:
House Bill 6380 would have an indeterminate, though likely modest, fiscal impact on the
Department of Licensing and Regulatory Affairs. The potential exists for LARA to experience
decreased fee revenue under the bill. If rural emergency hospitals choose to delicense beds,
they would no longer be liable for the $10 fee per bed that is assessed in addition to the $500
base fee for hospital licensure. LARA believes that a limited number of hospitals may delicense
their beds and that it would be a fairly low number of beds delicensed at each facility (estimated
at no more than 50 beds each). The department’s current projected revenue decrease is $1,500
or less.
1
https://www.law.cornell.edu/uscode/text/42/1395x
House Fiscal Agency Page 1 of 2
 The bill would likely have no impact on the state Medicaid and Healthy Michigan Plan
programs. Critical Access Hospitals and hospitals in eligible rural areas that transition to the
Rural Emergency Hospital provider type would still provide emergency and outpatient
services, and there would be no change in the Medicaid reimbursement rates for such services.
Rural Emergency Hospitals would benefit from the 5% increase in federal Medicare
reimbursement rates for emergency and outpatient services, as well as the monthly distribution
from the Centers for Medicare and Medicaid Services.
Legislative Analyst: Susan Stutzky
Fiscal Analysts: Kent Dell
Marcus Coffin
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
House Fiscal Agency HB 6380 (proposed H-1 substitute) Page 2 of 2


Statutes affected:
House Introduced Bill: 333.21501