health facilities; licensure; complaints; investigations

Plain English Breakdown

The bill summary and text do not provide specific details on how disputes over deficiencies are resolved beyond the initial process.

Health Facilities Licensing and Complaint Investigations

This bill modifies how health care facilities are licensed and investigates complaints about them.

What This Bill Does

• Changes the criteria for denying a new license or approving ownership changes based on safety risks to residents or patients.
• Requires DHS to inform facilities of general complaint details during investigations without revealing protected information.
• Limits investigations to violations that occurred within 12 months before a complaint was filed, except in cases of abuse.
• Revises the process for issuing and disputing statements of deficiencies by including specific rules or laws broken.

Who It Names or Affects

• Health care institutions in Arizona
• The Department of Health Services (DHS)

Terms To Know

Deficiency

A problem or violation found during an inspection that does not meet health and safety standards.

Compliance Inspection

An examination to check if a facility is following rules and regulations.

Limits and Unknowns

• The bill does not specify when it will take effect.
• It does not provide details on how disputes over deficiencies are resolved beyond the initial process.

Official Summary Text

HB2176 - 572R - Senate Fact Sheet

Assigned to
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PASSED BY COW

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

AMENDED

FACT SHEET FOR
H.B. 2176

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.

5.

Allows DHS to initiate a complaint investigation for incidents that
occurred more than 12 months before the complaint was submitted if the
complaint involves an allegation of abuse.

Statements of
Deficiencies

6.

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.

7.

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.

8.

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.

9.

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.

10.

Specifies
that a DHS decision or action relating to a statement of deficiencies is not an
appealable action.

Miscellaneous

11.

�Becomes
effective on the general effective date.

Amendments Adopted by Committee of the Whole

�

Allows DHS to initiate a complaint investigation of a health care
institution for incidents that occurred more than 12 months before the complaint
was submitted if the complaint involves an allegation of abuse.

House Action
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Senate
Action

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Prepared by Senate Research

April 2, 2026

MM/hk

Current Bill Text

HB2176 - 572R - S Ver

Senate Engrossed
House Bill

health facilities;
licensure; complaints; investigations

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 2176

AN
ACT

Amending section 36-420.05, Arizona
Revised Statutes; Amending Title 36, chapter 4, article 2, Arizona Revised
Statutes, by adding sections 36-424.04 and 36-424.05; relating to health
care institutions.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it
enacted by the Legislature of the State of Arizona:

Section 1. Section 36-420.05, Arizona Revised
Statutes, is amended to read:

START_STATUTE
36-420.05.

Legal action or sale; change of ownership; effect on licensure

A. The 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 or transferred or has closed.

B. The department may deny an application for a
health care institution license if
either:

1. The applicant, the licensee or a
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.

2. The department has determined for
reasons other than those specified in paragraph 1 of this subsection that

the issuance of a new license is likely to jeopardize resident or patient
safety
because the applicant or anyone in a business
relationship with the applicant, including stockholders and controlling
persons, either:

1. Has had a license to operate a
health care institution denied, revoked or suspended or a license or
certificate issued by a health profession regulatory board pursuant to title 32
or issued by a state agency pursuant to chapter 6, article 7 or chapter 17 of
this title denied, revoked or suspended.

2. 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
.

C. The department may deny the approval of a change
in ownership of a currently licensed health care institution if the department
determines that the transfer of ownership, whether involving a
new

direct owner or
new
indirect owner, may jeopardize
patient safety
because the new direct owner or new indirect
owner or anyone in a business relationship with the new direct owner or new
indirect owner, including stockholders and controlling persons, either:

1. Has had a license to operate a
health care institution denied, revoked or suspended or a license or
certificate issued by a health profession regulatory board pursuant to title 32
or issued by a state agency pursuant to chapter 6, article 7 or chapter 17 of
this title denied, revoked or suspended.

2. 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
.
END_STATUTE

Sec. 2. Title
36, chapter 4, article 2, Arizona Revised Statutes, is amended by adding
sections 36-424.04 and 36-424.05, to read:

START_STATUTE
36-424.04.

Complaint investigations; basis of complaints; time limit;
exception

A. When
entering a health care institution for a complaint investigation that is filed
with the department, the department shall notify the licensee of the general
nature of the complaint or complaints WHILE ensuring that the department does not
release any protected health information or information that may identify the
complainant.

B. IN CONDUCTING A compliance
inspection OR INITIAL COMPLAINT INVESTIGATION, THE DEPARTMENT MAY NOT CONSIDER
OR INVESTIGATE ANY ALLEGED VIOLATION THAT OCCURRED MORE THAN twelve months
BEFORE THE DATE THAT THE complaint was submitted to the department.

c. The department may initiate a
complaint investigation for incidents that occurred more than twelve months
before the date the complaint was submitted if the complaint involves an
allegation of abuse as defined in section 13-3623.
END_STATUTE

START_STATUTE
36-424.05.

Statement of deficiencies; informal dispute resolution; written
decision; amended statement

A. The department shall include in
any statement of deficiencies that is issued after a COMPLIANCE inspection OR
COMPLAINT INVESTIGATION THE CITATION of THE STATUTE OR RULE THAT APPLIES TO
EACH IDENTIFIED DEFICIENCY.

B. If a licensee receives a statement
of deficiencies following a COMPLIANCE inspection or complaint investigation
and the licensee wishes to dispute any identified deficiency, the licensee,
during the informal dispute resolution process, shall indicate to the
department within ten business days after receiving the statement of
deficiencies each deficiency the licensee is disputing and provide:

1. 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.

2. A request for the information to
be corrected or rescinded and supporting documentation that explains the reason
the deficiency should be corrected or rescinded.

C. The department shall review any
information and documentation provided by the licensee pursuant to subsection B
of this section within ten business days after receiving the information and
render a written decision. �The written decision shall state whether the
licensee's request to amend the statement of deficiencies is accepted and shall
contain a detailed explanation of the disposition of each deficiency contained
in the dispute.

D. If
any change is made to the statement of deficiencies during the informal dispute
resolution process, the department shall issue an amended statement of
deficiencies, which may include a deficiency-free statement.

E. A department decision or action
under this section is not an appealable agency action for the purposes of title
41, chapter 6, article 10.
END_STATUTE