Assigned to HHS AS PASSED BY COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
AMENDED
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. §§ 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. Requires each licensed hospital to provide and maintain with DHS a current list of exempt
OTCs that have the same direct or indirect owner as the hospital.
3. Requires each OTC licensed on September 23, 2022, that does not provide notice to DHS of
the OTC's intent to be exempt from licensure to remain licensed if the OTC pays the lapsed
licensing fees within 60 days of the general effective date.
4. Repeals, on January 1, 2025, the requirement for OTCs licensed on September 23, 2022, that
do not provide the licensure exemption notice to pay lapsed licensing fees within 60 days of
the general effective date to remain licensed. FACT SHEET – Amended
H.B. 2346
Page 2
5. Redefines owner as direct owner.
6. 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.
7. Makes technical and conforming changes.
8. Becomes effective on the general effective date.
Amendments Adopted by the Health and Human Services Committee
1. Requires each licensed hospital to provide and maintain with DHS a current list of exempt
OTCs that have the same direct or indirect owner as the hospital.
2. Requires, until January 1, 2025, each OTC licensed on September 23, 2022, that does not
provide notice to DHS of the OTC's intent to be exempt from licensure to remain licensed if
the OTC pays the lapsed licensing fees within 60 days of the general effective date.
House Action Senate Action
HHS 2/6/23 DP 9-0-0-0 HHS 3/21/23 DPA 7-0-0
3
rd
Read 3/8/23 44-14-2
Prepared by Senate Research
March 22, 2023
MG/JM/slp