REFERENCE TITLE: health facilities; complaints; investigations; training State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025 HB 2176 Introduced by Representative Willoughby AN ACT Amending sections 36-420.05 and 36-424, Arizona Revised Statutes; amending title 36, chapter 4, article 2, Arizona Revised Statutes, by adding sections 36-424.01, 36-424.02 and 36-424.03; relating to health care institutions. (TEXT OF BILL BEGINS ON NEXT PAGE)
REFERENCE TITLE: health facilities; complaints; investigations; training
State of Arizona House of Representatives Fifty-seventh Legislature First Regular Session 2025
HB 2176
Introduced by Representative Willoughby
REFERENCE TITLE: health facilities; complaints; investigations; training
State of Arizona
House of Representatives
Fifty-seventh Legislature
First Regular Session
2025
HB 2176
Introduced by
Representative Willoughby
AN ACT
Amending sections 36-420.05 and 36-424, Arizona Revised Statutes; amending title 36, chapter 4, article 2, Arizona Revised Statutes, by adding sections 36-424.01, 36-424.02 and 36-424.03; 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 36-420.05, Arizona Revised Statutes, is amended to read: START_STATUTE36-420.05. Legal action or sale; effect on licensure; rules A. The director may continue to pursue any court, administrative or enforcement action against a licensee even if the health care institution is in the process of being sold or transferred or has closed. B. The department may deny an application for a health care institution license if either: 1. The applicant, the licensee or a controlling person has a health care institution license that is in an enforcement action or court action related to the health and safety of the residents or patients. 2. The department has determined for reasons other than those specified in paragraph 1 of this subsection that the issuance of a new license is likely to jeopardize resident or patient safety. C. The department may deny the approval of a change in ownership of a currently licensed health care institution if the department determines that the transfer of ownership, whether involving a direct owner or indirect owner, may jeopardize patient safety. D. The department shall adopt rules outlining the evaluation process from which the director will make a determination under this section. END_STATUTE Sec. 2. Section 36-424, Arizona Revised Statutes, is amended to read: START_STATUTE36-424. Inspections; suspension or revocation of license; report to board of examiners of nursing care institution administrators and assisted living facility managers A. Except as provided in subsection B of this section, the director shall inspect the premises of the health care institution and investigate the character and other qualifications of the applicant to ascertain whether the applicant and the health care institution are in substantial compliance with the requirements of this chapter and the rules established pursuant to this chapter. The director may prescribe rules regarding department background investigations into an applicant's character and qualifications. B. The director may shall accept proof that a health care institution is an accredited hospital or is an accredited health care institution in lieu of all compliance inspections required by this chapter if the director receives a copy of the health care institution's accreditation report for the licensure period and the health care institution is accredited by an independent, nonprofit accrediting organization approved by the secretary of the United States department of health and human services. If the health care institution's accreditation report is not valid for the entire licensure period, the department may conduct a compliance inspection of the health care institution during the time period the department does not have a valid accreditation report for the health care institution. For the purposes of this subsection, each licensed premises of a health care institution must have its own accreditation report. The director may not accept an accreditation report in lieu of a compliance inspection of: 1. An intermediate care facility for individuals with intellectual disabilities. 2. A nursing-supported group home. 3. A health care institution if the health care institution has been subject to an enforcement action pursuant to section 36-427 or 36-431.01 within the year preceding the annual licensing fee anniversary date. C. On a determination by the director that there is reasonable cause to believe a health care institution is not adhering to the licensing requirements of this chapter, the director and any duly designated employee or agent of the director, including county health representatives and county or municipal fire inspectors, consistent with standard medical practices, may enter on and into the premises of any health care institution that is licensed or required to be licensed pursuant to this chapter at any reasonable time for the purpose of determining the state of compliance with this chapter, the rules adopted pursuant to this chapter and local fire ordinances or rules. Any application for licensure under this chapter constitutes permission for and complete acquiescence in any entry or inspection of the premises during the pendency of the application and, if licensed, during the term of the license. If an inspection reveals that the health care institution is not adhering to the licensing requirements established pursuant to this chapter, the director may take action authorized by this chapter. Any health care institution, including an accredited hospital, whose license has been suspended or revoked in accordance with this section is subject to inspection on application for relicensure or reinstatement of license. D. The director shall immediately report to the board of examiners of nursing care institution administrators and assisted living facility managers information identifying that a nursing care institution administrator's conduct may be grounds for disciplinary action pursuant to section 36-446.07. END_STATUTE Sec. 3. Title 36, chapter 4, article 2, Arizona Revised Statutes, is amended by adding sections 36-424.01, 36-424.02 and 36-424.03, to read: START_STATUTE36-424.01. Complaint investigations; basis of complaints; notification; priority matrix A. When entering a health care institution for a complaint investigation, the department shall notify the licensee of the nature of the complaint WHILE ensuring that the department does not release any private health information and conducts a thorough investigation. B. The department shall provide a complaint priority matrix for health care institutions on the department's public website that details the levels of complaints and the associated investigation initiation time frames, including the internal department process for determining each complaint level of priority. The complaint priority matrix shall include a link to the applicable rules adopted supporting the internal procedure documents and may not include any confidential information or other information that is otherwise protected from disclosure. C. Before conducting a complaint investigation, the department shall disclose to the licensee the complaint priority matrix level at which the complaint investigation will take place and disclose all documents that affect the internal procedures of the department or that impose additional requirements or penalties on licensees. END_STATUTE START_STATUTE36-424.02. Statement of deficiencies; informal dispute resolution; department's written decision A. If a licensee receives a statement of deficiencies following a state survey or complaint investigation and the licensee wishes to refute one or more deficiencies, the licensee, during the informal dispute resolution process, shall indicate to the department each specific deficiency the licensee is refuting and a detailed explanation of the reason the deficiency should not have been cited or why there was an error in the department's findings. B. The department shall review the information and documentation provided by the licensee pursuant to subsection A of this section within ten days after receiving the information and shall provide the licensee with a written decision stating in detail the reason for approving or denying each deficiency and why the department will or will not be removing the deficiency from the statement of deficiencies. If the department removes all deficiencies from the statement of deficiencies during the informal dispute resolution process, the department shall close the complaint. END_STATUTE START_STATUTE36-424.03. Surveyors and supervisors; annual training program; objectives The department shall implement an annual training program for all licensing surveyors and the supervisors and managers of licensing surveyors to ensure compliance with this chapter. The training program must ensure that surveyors, supervisors and managers meet at least the following: 1. Act in a professional manner that places an emphasis on dignity and respect and providing transparency for licensees. 2. Understand all current policies, procedures, rules and statutes relevant to each license type for which the employee is responsible. 3. Know all required information necessary to understand the nature of a complaint or grievance that results in a complaint investigation under this chapter. 4. Have applicable experience with regulating and inspecting within the type of license for which the employee is inspecting and surveying. 5. That surveyors do not make biased or unpublished interpretations of clinical or business operations. 6. Understand the procedures for conducting inspections with clear documentation provided at the start, outline the purpose of the inspection, survey or audit, know the licensee's rights and provide contact information for grievances. 7. Notify the licensee before the complaint investigation of the nature of the complaint while ensuring that the employee does not release any private health information and conducts a thorough investigation. 8. review preliminary findings with the licensee during an exit conference and issue a statement of deficiencies, including any necessary enforcement action, within thirty business days after completing an on-site investigation. END_STATUTE
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 36-420.05, Arizona Revised Statutes, is amended to read:
START_STATUTE36-420.05. Legal action or sale; effect on licensure; rules
A. The director may continue to pursue any court, administrative or enforcement action against a licensee even if the health care institution is in the process of being sold or transferred or has closed.
B. The department may deny an application for a health care institution license if either:
1. The applicant, the licensee or a controlling person has a health care institution license that is in an enforcement action or court action related to the health and safety of the residents or patients.
2. The department has determined for reasons other than those specified in paragraph 1 of this subsection that the issuance of a new license is likely to jeopardize resident or patient safety.
C. The department may deny the approval of a change in ownership of a currently licensed health care institution if the department determines that the transfer of ownership, whether involving a direct owner or indirect owner, may jeopardize patient safety.
D. The department shall adopt rules outlining the evaluation process from which the director will make a determination under this section. END_STATUTE
Sec. 2. Section 36-424, Arizona Revised Statutes, is amended to read:
START_STATUTE36-424. Inspections; suspension or revocation of license; report to board of examiners of nursing care institution administrators and assisted living facility managers
A. Except as provided in subsection B of this section, the director shall inspect the premises of the health care institution and investigate the character and other qualifications of the applicant to ascertain whether the applicant and the health care institution are in substantial compliance with the requirements of this chapter and the rules established pursuant to this chapter. The director may prescribe rules regarding department background investigations into an applicant's character and qualifications.
B. The director may shall accept proof that a health care institution is an accredited hospital or is an accredited health care institution in lieu of all compliance inspections required by this chapter if the director receives a copy of the health care institution's accreditation report for the licensure period and the health care institution is accredited by an independent, nonprofit accrediting organization approved by the secretary of the United States department of health and human services. If the health care institution's accreditation report is not valid for the entire licensure period, the department may conduct a compliance inspection of the health care institution during the time period the department does not have a valid accreditation report for the health care institution. For the purposes of this subsection, each licensed premises of a health care institution must have its own accreditation report. The director may not accept an accreditation report in lieu of a compliance inspection of:
1. An intermediate care facility for individuals with intellectual disabilities.
2. A nursing-supported group home.
3. A health care institution if the health care institution has been subject to an enforcement action pursuant to section 36-427 or 36-431.01 within the year preceding the annual licensing fee anniversary date.
C. On a determination by the director that there is reasonable cause to believe a health care institution is not adhering to the licensing requirements of this chapter, the director and any duly designated employee or agent of the director, including county health representatives and county or municipal fire inspectors, consistent with standard medical practices, may enter on and into the premises of any health care institution that is licensed or required to be licensed pursuant to this chapter at any reasonable time for the purpose of determining the state of compliance with this chapter, the rules adopted pursuant to this chapter and local fire ordinances or rules. Any application for licensure under this chapter constitutes permission for and complete acquiescence in any entry or inspection of the premises during the pendency of the application and, if licensed, during the term of the license. If an inspection reveals that the health care institution is not adhering to the licensing requirements established pursuant to this chapter, the director may take action authorized by this chapter. Any health care institution, including an accredited hospital, whose license has been suspended or revoked in accordance with this section is subject to inspection on application for relicensure or reinstatement of license.
D. The director shall immediately report to the board of examiners of nursing care institution administrators and assisted living facility managers information identifying that a nursing care institution administrator's conduct may be grounds for disciplinary action pursuant to section 36-446.07. END_STATUTE
Sec. 3. Title 36, chapter 4, article 2, Arizona Revised Statutes, is amended by adding sections 36-424.01, 36-424.02 and 36-424.03, to read:
START_STATUTE36-424.01. Complaint investigations; basis of complaints; notification; priority matrix
A. When entering a health care institution for a complaint investigation, the department shall notify the licensee of the nature of the complaint WHILE ensuring that the department does not release any private health information and conducts a thorough investigation.
B. The department shall provide a complaint priority matrix for health care institutions on the department's public website that details the levels of complaints and the associated investigation initiation time frames, including the internal department process for determining each complaint level of priority. The complaint priority matrix shall include a link to the applicable rules adopted supporting the internal procedure documents and may not include any confidential information or other information that is otherwise protected from disclosure.
C. Before conducting a complaint investigation, the department shall disclose to the licensee the complaint priority matrix level at which the complaint investigation will take place and disclose all documents that affect the internal procedures of the department or that impose additional requirements or penalties on licensees. END_STATUTE
START_STATUTE36-424.02. Statement of deficiencies; informal dispute resolution; department's written decision
A. If a licensee receives a statement of deficiencies following a state survey or complaint investigation and the licensee wishes to refute one or more deficiencies, the licensee, during the informal dispute resolution process, shall indicate to the department each specific deficiency the licensee is refuting and a detailed explanation of the reason the deficiency should not have been cited or why there was an error in the department's findings.
B. The department shall review the information and documentation provided by the licensee pursuant to subsection A of this section within ten days after receiving the information and shall provide the licensee with a written decision stating in detail the reason for approving or denying each deficiency and why the department will or will not be removing the deficiency from the statement of deficiencies. If the department removes all deficiencies from the statement of deficiencies during the informal dispute resolution process, the department shall close the complaint. END_STATUTE
START_STATUTE36-424.03. Surveyors and supervisors; annual training program; objectives
The department shall implement an annual training program for all licensing surveyors and the supervisors and managers of licensing surveyors to ensure compliance with this chapter. The training program must ensure that surveyors, supervisors and managers meet at least the following:
1. Act in a professional manner that places an emphasis on dignity and respect and providing transparency for licensees.
2. Understand all current policies, procedures, rules and statutes relevant to each license type for which the employee is responsible.
3. Know all required information necessary to understand the nature of a complaint or grievance that results in a complaint investigation under this chapter.
4. Have applicable experience with regulating and inspecting within the type of license for which the employee is inspecting and surveying.
5. That surveyors do not make biased or unpublished interpretations of clinical or business operations.
6. Understand the procedures for conducting inspections with clear documentation provided at the start, outline the purpose of the inspection, survey or audit, know the licensee's rights and provide contact information for grievances.
7. Notify the licensee before the complaint investigation of the nature of the complaint while ensuring that the employee does not release any private health information and conducts a thorough investigation.
8. review preliminary findings with the licensee during an exit conference and issue a statement of deficiencies, including any necessary enforcement action, within thirty business days after completing an on-site investigation. END_STATUTE