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SB1345 - 572R - H Ver
House Engrossed
Senate Bill
health
facilities; anonymous complaints; prohibition
(now:� health
facilities; licensure; surveys)
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SENATE BILL 1345
AN
ACT
Amending sections 36-405 and 36-425,
Arizona Revised Statutes; 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 36-405, Arizona Revised
Statutes, is amended to read:
START_STATUTE
36-405.
Powers and duties of the director
A. The director shall adopt rules to establish
minimum standards and requirements for constructing, modifying and licensing
health care institutions necessary to ensure the public health, safety and
welfare. The standards and requirements shall relate to the construction,
equipment, sanitation, staffing for medical, nursing and personal care
services, and recordkeeping pertaining to administering medical, nursing,
behavioral health and personal care services, in accordance with generally
accepted practices of health care. The standards shall require that
a physician who is licensed pursuant to title 32, chapter 13 or 17 medically
discharge patients from surgery and shall allow an outpatient surgical center
to require that either an anesthesia provider who is licensed pursuant to title
32, chapter 13, 15 or 17 or a physician who is licensed pursuant to title 32,
chapter 13 or 17 remain present on the premises until all patients are
discharged from the recovery room. Except as otherwise provided in
this subsection, the director shall use the current standards adopted by the
joint commission on accreditation of hospitals and the commission on
accreditation of the American osteopathic association or those adopted by any
recognized accreditation organization approved by the department as guidelines
in prescribing minimum standards and requirements under this section.
B. The director, by rule, may:
1. Classify and subclassify health care institutions
according to character, size, range of services provided, medical or dental
specialty offered, duration of care and standard of patient care required for
the purposes of licensure. Classes of health care institutions may
include hospitals, infirmaries, outpatient treatment centers, health screening
services centers and residential care facilities. Whenever the
director reasonably deems distinctions in rules and standards to be appropriate
among different classes or subclasses of health care institutions, the director
may make such distinctions.
2. Prescribe standards for determining a health care
institution's substantial compliance with licensure requirements.
3. Prescribe the criteria for the licensure
inspection process.
4. Prescribe standards for selecting health care-related
demonstration projects.
5. Establish nonrefundable application
, initial licensure inspection
and licensing fees for health
care institutions, including a grace period and a fee for the late payment of
licensing fees.
6. Establish a process for the department to notify
a licensee of the licensee's licensing fee due date.
7. Establish a process for a licensee to request a
different licensing fee due date, including any limits on the number of
requests by the licensee.
C. The director, by rule, shall adopt licensing
provisions that facilitate the colocation and integration of outpatient
treatment centers that provide medical, nursing and health-related
services with behavioral health services consistent with article 3.1 of this
chapter.
D. The director shall establish a model in rule for
the department to monitor health care institutions
on-site
that are found to not be in substantial compliance with the applicable
licensure requirements. The director shall establish on-site
monitoring fees for health care institutions that are subject to the on-site
monitoring requirements.
The department may
not charge a fee pursuant to this subsection for a complaint or compliance-related
survey or inspection if a health care institution is in substantial compliance.
E. The department may provide in-service
training to health care institutions that request in-service training
relating to regulatory compliance outside of the survey process. The
director shall establish in rule in-service training fees for health care
institutions that request in-service training from the department.
F. Ninety percent of the fees collected pursuant to
this section shall be deposited, pursuant to sections 35-146 and 35-147,
in the health services licensing fund established by section 36-414 and
ten percent of the fees collected pursuant to this section shall be deposited,
pursuant to sections 35-146 and 35-147, in the state general fund.
G. Subsection B, paragraph 5 of this section does
not apply to a health care institution operated by a state agency pursuant to
state or federal law or to adult foster care residential settings.
END_STATUTE
Sec. 2. Section 36-425, Arizona Revised
Statutes, is amended to read:
START_STATUTE
36-425.
Inspections; issuance of license; posting requirements;
provisional license; denial of license
A. On receipt of a properly completed application
for a health care institution license, the director shall conduct an inspection
of the health care institution as prescribed by this chapter. �If an
application for a license is submitted due to a planned change of ownership,
the director shall determine the need for an inspection of the health care
institution. Based on the results of the inspection and after the
submission of the applicable licensing fee, the director shall either deny the
license or issue a regular or provisional license. A license issued by the
department shall be posted in a conspicuous location in the reception area of
that health care institution.
B. The director shall issue a license if the
director determines that an applicant and the health care institution for which
the license is sought substantially comply with the requirements of this
chapter and rules adopted pursuant to this chapter and the applicant agrees to
carry out a plan acceptable to the director to eliminate any
deficiencies. The director shall not require a health care
institution that was designated as a critical access hospital to make any
modifications required by this chapter or rules adopted pursuant to this
chapter in order to obtain an amended license with the same licensed capacity
the health care institution had before it was designated as a critical access
hospital if all of the following are true:
1. The health care institution has subsequently
terminated its critical access hospital designation.
2. The licensed capacity of the health care
institution does not exceed its licensed capacity before its designation as a
critical access hospital.
3. The health care institution remains in compliance
with the applicable codes and standards that were in effect at the time the
facility was originally licensed with the higher licensed capacity.
C. A health care institution license does not expire
and remains valid unless:
1. The department subsequently revokes or suspends
the license.
2. The license is considered void because the
licensee did not pay the licensing fee, civil penalties or provider agreement
fees before the relevant due date or did not enter into an agreement with the
department before the relevant due date to pay all outstanding fees or civil
penalties.
D. Except as provided in section 36-424,
subsection B and subsection E of this section, the department shall conduct a
compliance inspection of a health care institution to determine compliance with
this chapter and rules adopted pursuant to this chapter at least once annually.
E. If the department determines a facility, except
for a residential care institution or a nursing care institution
that does not have the same direct owner or indirect
owner as a hospital licensed pursuant to this chapter, to be deficiency free on
a compliance survey, the department shall not conduct a compliance survey of
that facility for twenty-four months after the date of the deficiency
free survey. �This subsection does not prohibit the department from enforcing
licensing requirements as authorized by section 36-424.
F. A hospital licensed as a rural general hospital
may provide intensive care services.
G. The director shall issue a provisional license
for a period of not more than one year if an inspection or investigation of a
currently licensed health care institution or a health care institution for
which an applicant is seeking a license reveals that the health care
institution is not in substantial compliance with department licensure
requirements and the director believes that the immediate interests of the
patients and the general public are best served if the health care institution
is given an opportunity to correct deficiencies. �The applicant or licensee
shall agree to carry out a plan to eliminate deficiencies that is acceptable to
the director. The director shall not issue consecutive provisional
licenses to a single health care institution. The director shall not
issue a license to the current licensee or a successor applicant before the
expiration of the provisional license unless the health care institution
submits an application for a substantial compliance survey and is found to be
in substantial compliance. The director may issue a license only if
the director determines that the health care institution is in substantial
compliance with the licensure requirements of the department and this
chapter. This subsection does not prevent the director from taking
action to protect the safety of patients pursuant to section 36-427.
H. Subject to the confidentiality requirements of
articles 4 and 5 of this chapter, title 12, chapter 13, article 7.1 and section
12-2235, the licensee shall keep current department inspection reports at
the health care institution. Unless federal law requires otherwise,
the licensee shall post in a conspicuous location a notice that identifies the
location at that health care institution where the inspection reports are
available for review.
I. A health care institution shall immediately
notify the department in writing when there is a change of the chief
administrative officer specified in section 36-422, subsection A,
paragraph 1, subdivision (g).
J. When the department issues an original license or
an original provisional license to a health care institution, it shall notify
the owners and lessees of any agricultural land within one-fourth mile of
the health care institution. The health care institution shall provide the
department with the names and addresses of owners or lessees of agricultural
land within one-fourth mile of the proposed health care institution.
K. In addition to the grounds for denial of
licensure prescribed pursuant to subsection A of this section, the director may
deny a license because an applicant or anyone in a business relationship with
the applicant, including stockholders and controlling persons, 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 or 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.
L. The
department shall:
1. Within
ninety days after receiving a complete initial application for a health care
institution license, approve or deny the application.
2. Within thirty days after receiving
survey results completed by a third-party accreditation organization,
review and submit to the medicare administrative contractor for certification
survey results that meet the requirements of the centers for medicare and
medicaid services.
L.
M.
In
addition to the requirements of this chapter, the director may prescribe by
rule other licensure requirements.
END_STATUTE