Relating to children’s specialty hospital designations for certain nonprofit organizations, and including effective date provisions

This bill relates to specialty hospital designations for certain nonprofit organizations. The bill defines “specialty hospital” as a hospital that is owned and operated by a nonprofit organization; only serves individuals years of age and younger; has more than percent of patients receiving medical assistance under Code chapter 249A (medical assistance); specializes in pediatric rehabilitation and treating children with a behavioral health condition or complex medical needs; has no more than 100 inpatient beds; provides outpatient services; and was a licensed nursing facility prior to July 1, 2025. The bill requires a specialty hospital to establish formal criteria based on objective medical standards for patient admission, discharge, and continuation of care. The department of inspections, appeals, and licensing (DIAL) must adopt rules relating to the application of criteria when reviewing patient discharges from a specialty hospital. The bill requires the department of health and human services (HHS) to provide notice to a specialty hospital of a significant change in federal Medicaid reimbursement to hospitals which would negatively impact the specialty hospital. The bill requires HHS, to the extent permitted by law, to collaborate with specialty hospitals to mitigate the negative effects of a significant change in federal Medicaid reimbursement to hospitals. The bill requires HHS to set reimbursement rates for inpatient care provided by a specialty hospital at a rate equal to the specialty hospital’s average allowable per diem costs as adjusted for inflation. The bill requires DIAL, HHS, and the state health facilities council, to the extent not prohibited by federal law, to waive certain regulatory requirements, exempt a specialty hospital from certain regulatory requirements, and support a specialty hospital in obtaining a waiver from or achieving compliance with certain federal regulatory requirements as necessary to allow the specialty hospital to operate. The bill directs DIAL and HHS to adopt rules to implement such waivers and exemptions, or permit such assistance.