HB 2346
Initials AG Page 1 Health & Human Services
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
First Regular Session
HB 2346: outpatient treatment centers; exemption
Sponsor: Representative Shah, LD 5
Committee on Health & Human Services
Overview
Specifies that for an outpatient treatment center (OTC) to be exempt from licensure, supervision,
regulation or control of the Arizona Department of Health Services (DHS) it must have the same
direct or indirect owner as a licensed hospital, be staffed by licensed health care providers and
provide notice to DHS of its decision to be exempt.
History
An exempt OTC is a facility with the same governing authority as a licensed hospital, that does
not have inpatient beds, provides health services or behavioral health services for the diagnosis
and treatment of patients and that is exempt from licensure if certain criteria are met (A.R.S. § 36-
439).
Governing authority means the individual, agency, partners, owner, group or corporation, whether
appointed, elected or otherwise designated, in which the ultimate responsibility and authority for
the conduct of the health care institution are vested. An owner means a person who has an
ownership interest of at least 51% of a health care institution (A.R.S. § 36-401).
An OTC that has the same governing authority as a licensed hospital and is staffed by licensed
health care providers is exempt from DHS's supervision, licensure, regulation or control unless:
1) patients are kept overnight or are treated under general anesthesia, except when the
treatment by general anesthesia is regulated under the dentistry statutes;
2) is an abortion clinic; or
3) is a pain management clinic (A.R.S. § 36-402).
An exempt OTC is subject to reasonable inspection by DHS if the Director has reasonable cause
to believe that patient harm is or may be occurring. A substantiated complaint that harm is
occurring at an exempt OTC is a violation against the hospital's license (A.R.S. § 36-422).
Provisions
1. Exempts an OTC from licensure, supervision, regulation or control of DHS if:
a) it has the same director owner or indirect owner as a licensed hospital;
b) is staffed by licensed health care providers; and
c) provides notice to DHS of its decision to be exempt from licensure. (Sec. 2)
2. Specifies that a substantiated complaint that harm is occurring at an exempt OTC is a violation
against the license of the hospital listed in the exemption notice provided to DHS. (Sec. 3)
3. Defines direct owner as a person that has an ownership or control interest in a health care
institution totaling 51% or more. (Sec.1)
4. Defines indirect owner as:
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a) a person that has an ownership or control interest in a direct owner totaling 51% or more;
and
b) includes an ownership or control interest in an indirect owner totaling 51% or more and a
combination of direct ownership and indirect ownership or control interests totaling 51%
or more in the health care institution. (Sec. 1)
5. Modifies terms. (Sec.1)
6. Makes technical and conforming changes. (Sec. 1-4)