 |
ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
health facilities; licensure; complaints; investigations
Purpose
Modifies the criteria under which the Department of Health Services (DHS) may deny a health care institution license or change of ownership. Establishes requirements and procedures for DHS complaint investigations, compliance inspections and the issuance and dispute of statements of deficiencies.
Background
Current statute authorizes DHS to deny a health care institution license if: 1) the applicant, licensee or a controlling person has a health care institution license under enforcement or court action related to resident or patient health and safety; 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 also deny approval of a change in ownership of a licensed health care institution if DHS determines that the transfer, whether involving a direct or indirect owner, may jeopardize patient safety (A.R.S. § 36-420.05).
DHS regulates health care institutions through licensing inspections, complaint investigations and compliance reviews. DHS may investigate complaints alleging violations of health care institution licensing statutes or rules and conduct inspections to determine compliance with applicable requirements. If an investigation or inspection identifies violations, DHS may cite the facility and take enforcement action as authorized by statute and rule (A.R.S. § 36-425).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Denial of Licensure or Change in Ownership
1. Allows DHS to deny a health care institution license application or approval of a change in ownership if doing so is likely to jeopardize resident or patient safety because the applicant, a new direct or indirect owner, or a person in a business relationship with the applicant or a new direct or indirect owner, including stockholders and controlling persons, has:
a) had a health care institution license denied, revoked or suspended or a professional license or certificate issued by a health profession regulatory board or DHS denied, revoked or suspended; or
b) a recent history of serious licensing violations occurring in Arizona or another state that posed a direct risk to the life, health or safety of patients or residents.
2. Removes the existing criteria for DHS denial of a health care institution license application based specifically on current enforcement or court actions involving the applicant, licensee or a controlling person relating to resident or patient health and safety.
Complaint Investigations and Compliance Inspections
3. Requires DHS, when entering a health care institution for a complaint investigation, to notify the licensee of the general nature of the complaint or complaints while ensuring that DHS does not release any protected health information or other information that may identify the complainant.
4. Prohibits DHS, in conducting a compliance inspection or initial complaint investigation, from considering or investigating any alleged violation that occurred more than 12 months before the date the complaint was submitted to DHS.
Statements of Deficiencies
5. Requires DHS to include, on a statement of deficiencies issued after a compliance inspection or complaint investigation, the statutory citation or rule that applies to each deficiency identified.
6. Requires a licensee that disputes a deficiency identified on a statement of deficiencies during the informal dispute resolution process to indicate to DHS each deficiency that the licensee is disputing within 10 business days of receiving the statement of deficiencies and provide:
a) an explanation or documentation demonstrating that the licensee was in compliance with the identified deficiency at the time of the compliance inspection or complaint investigation; and
b) a request to correct or rescind the deficiency and supporting documentation explaining the reason the deficiency should be corrected or rescinded.
7. Requires DHS to review any information and documentation provided by the licensee within 10 days after receiving the information and render a written decision stating whether the licensee's request to amend the statement of deficiencies is accepted, including a detailed explanation of the disposition of each deficiency contained in the dispute.
8. Requires DHS to issue an amended statement of deficiencies if any change is made during the informal dispute resolution process, including when the amended statement is deficiency-free.
9. Specifies that a DHS decision or action relating to a statement of deficiencies is not an appealable action.
10. Becomes effective on the general effective date.
House Action
HHS 2/9/26 DP 12-0-0-0
3rd Read 2/25/26 42-11-7
Prepared by Senate Research
March 9, 2026
MM/hk