Assigned to HHS FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
FACT SHEET FOR S.B. 1655
health care institutions; regulation
Purpose
Makes various changes related to the licensing, oversight and regulation of health care
institutions and behavioral health residential facilities (BHRFs). Increases the cap on civil penalties
for violation of health care institution statutes from $500 to $10,000 and allocates collected monies
to prescribed sources. Establishes the Indigenous Peoples Protection Revolving Fund (Fund) to
support resiliency and healing of indigenous peoples in Arizona, consisting of monies received
from civil penalties assessed against health care institutions.
Background
Health care institutions in Arizona are licensed and overseen by the Department of Health
Services (DHS), including enforcement of health care institution statutes, rules and regulations.
DHS must: 1) review and approve plans and specifications for institution construction or
modification; 2) have access to books, records, accounts and any other necessary health care
institution information; and 3) require nursing care institutions and assisted living facilities to
provide annual influenza and pneumonia vaccines to residents. Additionally, DHS may: 1) inspect
every part of a health care institution to ensure compliance with standard medical practice;
2) conduct investigations of health care institution conditions and problems with noncompliance;
and 3) develop facility manuals and guides to health care institutions and the general public (A.R.S.
§ 36-406). Health care institutions must be in substantial compliance with state laws governing
health care institutions to be licensed and avoid enforcement action by DHS (A.R.S. § 36-425).
A BHRF is a health care institution that provides treatment to an individual experiencing a
behavioral health issue that limits the individual's ability to be independent or causes the individual
to require treatment to maintain or enhance independence (A.A.C. § R9-10-101).
The Director of DHS (Director) may assess a civil penalty of up to $500 for each violation
of health care institution statutes, for every day the violation occurs. The Director may then issue
a notice of assessment that includes the amount of the assessment to the violator. Monies collected
from civil penalties for violations of health care institutions are transmitted to the state General
Fund (state GF) (A.R.S. § 36-431.01).
S.B. 1655 redirects monies collected from civil penalties assessed for violations of health
care institution statutes from the state GF to the Fund, the Health Services Licensing Fund and the
Nursing Care Institution Resident Protection Revolving Fund.
Provisions
1. Allows the Director, by rule, to establish an additional monitoring fee for health care
institutions that are not in compliance with laws governing health care institutions. FACT SHEET
S.B. 1655
Page 2
2. Requires DHS standards for nutrition and feeding assistant training programs to include testing
requirements that ensure, rather than assure, competency.
3. Requires DHS to impose a civil penalty on a nutrition and feeding assistant training program
that violates DHS standards.
4. Prohibits the Director from accepting an accreditation report in lieu of a compliance inspection
of a:
a) health care institution that has been subject to a criminal penalty in the preceding five years;
or
b) residential care institution.
5. Requires health care institutions to be in compliance, rather than substantial compliance, with
statutes and rules governing health care institutions in order to be licensed by DHS.
6. Voids a health care institution license if the licensee does not pay any civil penalties or the
provider agreement fees assessed.
7. Excludes residential care institutions from laws granting DHS compliance survey exemptions
for facilities that have been deficiency free for 24 months.
8. Removes the requirement that DHS issue a provisional license to an unlicensed health care
institution that is not in substantial compliance with DHS licensure requirements and that the
Director believes best serves patients and the public by being provided a chance to correct
deficiencies.
9. Declares residential care institutions operating without a license guilty of a class 6 felony,
subject to a daily civil penalty of between $5,000 and $10,000 for each violation.
10. Requires BHRFs to notify a resident's family or next of kin within 72 hours of the initial
evaluation and document the notification in the resident's medical record.
11. Prohibits BHRFs from coordinating, facilitating, arranging or soliciting transportation of a
person to the BHRF if the person is intoxicated or under the influence of a substance, unless
the person is referred by an approved provider of a tribal health care program or regional
behavioral health authority or is under order of the court.
12. Requires BHRFs to inquire, both verbally and in writing, whether a resident wants to be
transported to the resident's place of residence or another safe living space in Arizona, as
requested by the resident after discharge.
13. Requires a BHRF resident's wishes regarding transportation to be documented on a
DHS-prescribed form, signed by the resident and retained in the resident's medical record.
14. Requires BHRFs to ensure safe and reliable transportation, as determined by DHS, for
residents who wish to be transported home or to another safe living space upon discharge.
15. Requires, rather than allows, the Director to assess a civil penalty against a person who violates
health care institution statutes. FACT SHEET
S.B. 1655
Page 3
16. Increases the cap on civil penalties for violation of health care institution statutes from $500 to
$10,000 per violation, for each day that a violation occurs.
17. Requires a civil penalty for violation of health care institution statutes to be a minimum of
$5,000 per violation, for each day that a violation occurs.
18. Requires the Director to issue notices of assessment and for the notice to include the amount
of the assessment.
19. Requires DHS, in determining the amount of a civil penalty for violation of health care
institution statutes, to consider the:
a) number of injuries caused;
b) severity of the injuries caused;
c) number of deaths caused; and
d) the cause of deaths.
20. Prohibits DHS from approving the license application of a licensed health care institution with
any pending enforcement or court action against it.
21. Requires the Director to continue to pursue any court, administrative or enforcement action
against a licensee even when the health care institution is in the process of being sold or
transferred to a new owner.
22. Prohibits DHS from approving a change in ownership of a health care institution unless it is
determined that there has been a transfer of all legal and equitable interests, control and
authority in the health care institution so that persons other than the transferring licensee, the
licensee's agent or other parties exercising authority or supervision over operations are
responsible for and have control over the health care institution.
23. Establishes the Fund to support resiliency and healing of indigenous peoples in Arizona,
consisting of monies received from civil penalties assessed against health care institutions.
24. Requires the Director to administer the Fund.
25. Requires monies in the Fund to be used annually, as follows:
a) 40 percent must be transferred to Arizona tribal colleges for programming in social work
and behavioral health;
b) 20 percent must be used to provide restitution payments for families of deceased victims
of Arizona's behavioral health system and sober living homes, with each family receiving
a minimum of $3,000 and the repatriation of the victim's human remains and expenses; and
c) 40 percent must be distributed to tribal communities for behavioral health treatment
services and programs for residential homes, including BHRFs, sober living homes and
transitional homes.
26. Directs DHS to deposit assessed civil penalties as follows:
a) 80 percent in the Fund;
b) 5 percent in the Health Services Licensing Fund; and
c) 15 percent in the Nursing Care Institution Resident Protection Revolving Fund. FACT SHEET
S.B. 1655
Page 4
27. Specifies that monies in the Fund are continuously appropriated and are exempt from lapsing.
28. Declares that the legislature intends for DHS to review and amend the rules for BHRFs to
ensure that there are adequate and proper requirements for staffing, care and oversight.
29. Exempts DHS, until June 30, 2025, from statutory rulemaking requirements for the purposes
of amending rules related to health care institutions.
30. Makes technical and conforming changes.
31. Becomes effective on the general effective date.
Prepared by Senate Research
February 9, 2024
MM/sdr