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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
House: HHS DP 12-0-0-0 |
HB 2176: health facilities; licensure; complaints; investigations
Sponsor: Representative Willoughby, LD 13
House Engrossed
Overview
Modifies the criteria for denying licensure or ownership changes for health care institutions, establishes time limits and requirements for complaint investigations and standards for the informal dispute resolution process.
History
A health care institution is every place, institution, building or agency, whether organized for profit or not, that provides facilities with medical services, nursing services, behavioral health services, health screening services, other health-related services, supervisory care services, personal care services or directed care services and includes home health agencies, outdoor behavioral health care programs and hospice service agencies.
Current law establishes processes and procedures that applicants must follow to obtain a health care institution license. Applicants must submit to the Arizona Department of Health Services (DHS): 1) an application on a written or electronic form that contains certain information about the health care institution; 2) a notarized attestation form that verifies the architectural plans and specifications of the health care institution; and 3) the applicable application fee. An application for a health care institution license must be submitted at least 60 days, but not more than 120 days before the anticipated date of operation. An application for a substantial compliance survey must be submitted at least 30 days before the date on which the survey was requested.
If a current licensee intends to terminate the operation of a licensed health care institution or if a change in ownership is planned, the current licensee must notify the DHS Director in writing at least 30 days before the termination of operation or change in ownership has taken place. The current licensee is responsible for preventing any interruption of services required to sustain the life, health and safety of the patients or residents. A new owner is prohibited from beginning to operate the health care institution until the DHS Director issues a license to the new owner (A.R.S. § 36-401 and 36-422).
The DHS Director may continue to pursue any court, administrative or enforcement action against a licensee even if the health care institution is in the process of being sold, transferred or has closed. DHS may deny an application for a health care institution license if either: 1) the applicant, the licensee or controlling person has a health care institution license that is in an enforcement action or court action related to the health and safety of the residents or patients; or 2) DHS has determined for other reasons that the issuance of a new license is likely to jeopardize resident or patient safety. DHS may deny the approval of a change in ownership of a currently licensed health care institution if it determines that the transfer of ownership, whether involving a direct or indirect owner, may jeopardize patient safety (A.R.S. § 36-420.05).
Provisions
Denial of Initial Licensure or Change in Ownership
1. Allows DHS to deny licensure or a change in ownership of a health care institution if the issuance of a new license or transfer of ownership is likely to jeopardize resident or patient safety because the applicant, new direct or indirect owner or anyone in a business relationship with these persons, including stockholders and controlling persons, either:
a. has had a license to operate a health institution denied, revoked or suspended;
b. has had a license or certificate issued by a health professional regulatory board denied, revoked or suspended;
c. has had a midwifery license denied, suspended or revoked;
d. has had a hearing aid dispenser, audiologist and speech-language pathologists license denied, suspended or revoked; or
e. has a licensing history of recent serious violations occurring in this state or in another state that posed a direct risk to the life, health or safety of patients or residents. (Sec. 1)
Complaint Investigations
2. Requires DHS to notify the licensee of the general nature of the complaint or complaints when entering a health care institution for a complaint investigation that is filed. (Sec. 2)
3. Requires DHS to ensure that the notice does not include protected health information or information that may identify the complainant. (Sec. 2)
4. Prohibits DHS from considering or investigating any alleged violation that occurred more than 12 months before the date that a complaint was submitted when conducting a compliance inspection or initial complain investigation. (Sec. 2)
Informal Dispute Resolution Process
5. Requires DHS to include in any statement of deficiencies issued after a compliance inspection or complaint investigation the citation of the statute or rule that applies to each identified deficiency. (Sec. 2)
6. Requires a licensee during the informal dispute resolution process, to indicate to DHS within 10 business days after receiving the statement of deficiencies, each deficiency the licensee is disputing and provide:
a. an explanation demonstrating, or documentation showing, that the licensee was in compliance with the identified deficiency at the time of the compliance inspection or complaint investigation; and
b. a request for the information to be corrected or rescinded and supporting documentation that explains the reason the deficiency should be corrected or rescinded. (Sec. 2)
7. Directs DHS to review any information and documentation provided by the licensee within 10 business days after receiving the information and render a written decision. (Sec. 2)
8. Requires the written decision to state whether the licensee's request to amend the statement of deficiencies is accepted and contain a detailed explanation of the disposition of each deficiency contain in the dispute. (Sec. 2)
9. Requires DHS to issue an amended statement of deficiencies if any change is made to the statement of deficiencies during the informal dispute resolution process, which may include a deficiency-free statement. (Sec. 2)
10. Specifies that any DHS decision or action under the informal dispute resolution process is not an appealable agency action. (Sec. 2)
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14. Initials AG HB 2176
15. 2/9/2026 Page 0 House Engrossed
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