Assigned to HHS FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
FACT SHEET FOR H.B. 2346
outpatient treatment centers; exemption
Purpose
Exempts an outpatient treatment center (OTC) from Department of Health Services (DHS)
licensure, supervision, regulation and control if the OTC has the same direct or indirect owner as
a licensed hospital, rather than the same governing authority, and if the OTC notifies DHS of the
decision to be exempt from licensure.
Background
Laws 2022, Chapter 128 exempts an OTC that is staffed by health care providers and has
the same governing authority as a licensed hospital from DHS licensure, supervision, regulation
and control, unless: 1) patients are kept overnight or are treated under general anesthesia; or 2) the
center is an abortion or pain management clinic. An exempt OTC that has the same governing
authority as a licensed hospital is subject to reasonable inspection by DHS if the Director of DHS
has reasonable cause to believe that patient harm is or may be occurring at the OTC. A substantial
complaint that harm is occurring at an exempt OTC is a violation against the hospital's license.
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 is a person who has an ownership
interest of at least 51 percent of a health care institution (A.R.S. ยงยง 36-401; 36-402; and 36-422).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Exempts an OTC from DHS licensure, supervision, regulation and control if the OTC has the
same direct or indirect owner as a licensed hospital, rather than the same governing authority,
and if the OTC notifies DHS of its decision to be exempt from licensure.
2. Redefines owner as direct owner.
3. Defines indirect owner as a person that has an ownership or control interest in a direct owner
totaling 51 percent or more and includes an ownership or control interest in an indirect owner
totaling 51 percent or more and a combination of direct and indirect ownership or control
interest totaling 51 percent or more in the health care institution.
4. Makes technical and conforming changes.
5. Becomes effective on the general effective date. FACT SHEET
H.B. 2346
Page 2
House Action
HHS 2/6/23 DP 9-0-0-0
3
rd
Read 3/8/23 44-14-2
Prepared by Senate Research
March 17, 2023
MG/JM/slp