Ohio’s new hospital licensure law

The budget bill recently signed into law by Ohio Governor DeWine (H.B. 110) included a much-anticipated hospital licensure law new to the state’s hospitals. The newly created law, codified as new Revised Code Chapter 3722, will require all hospitals in Ohio to obtain licensure from the Ohio Department of Health (ODH) within three years from the effective date of the budget bill (i.e., by September 30, 2024).    

Highlights of the new hospital licensure law include:

• Licensure -- R.C. 3722.03. To be eligible to apply for a license, a hospital must:  (1) submit a complete application identifying the main hospital location and all off-campus provider-based locations as defined by 42 C.F.R. 413.65; (2) be certified by the Centers for Medicare and Medicaid Services (CMS) or accredited by an accrediting organization approved by CMS; (3) demonstrate the ability to comply with standards established for hospitals by ODH (see below); and (4) specify the number of beds for the hospital. The license will be valid for a three-year period unless revoked.  
• Initial and Renewal Applications -- R.C. 3722.03. Initial and renewal applications for hospital licensure will be submitted to ODH in the form and manner set forth in future rules to be adopted by ODH. Initial applications will not be accepted prior to one year from the effective date of the budget bill (i.e., prior to September 30, 2022). 
• License Transfer -- R.C. 3722.04. Under the new law, when a hospital is assigned, sold or transferred to a new owner, an application for license transfer must be submitted to ODH within 30 days of the assignment, sale or transfer. This license transfer application process is to be established by future rules to be adopted by ODH.  
• Surveys -- R.C. 3722.05. The new law provides that ODH may inspect the hospital in the course of processing initial and renewal applications. However, a hospital may avoid such inspection if the hospital submits a copy of its most recent on-site survey report from CMS or accrediting organization. ODH may inspect a hospital at any time in order to: (1) address an incident that may impact public health; (2) respond to a complaint; or (3) ensure the safety of hospital patients.   
• Standards -- R.C. 3722.06. ODH is to adopt rules within one year from the effective date of the budget bill (i.e., by September 30, 2022) establishing health, safety, welfare and quality standards required to be met by hospital to qualify for licensure. 
• Maternity Units, Newborn Nurseries and Health Care Services – R.C. 3722.06. In addition to the general hospital standards, ODH is required to  adopt rules within one year from the effective date of the budget bill (i.e., by September 30, 2022) establishing standards for (1) maternity units; (2) newborn care nurseries; and (3) health care services. The budget bill amends current statutes governing maternity units and newborn nurseries, R.C. 3711.01 through R.C. 3711.14, to remove references to hospital unit (leaving these current statutes to apply only to free-standing maternity homes). It seems likely that ODH will adopt the same maternity and neonatal unit rules currently in O.A.C. Chapter 3701-7 as rules under new R.C. 3722.05.  A “health care service” is defined in the new law in the same manner as in current R.C. 3702.11.  The current statutes governing health care services, R.C. 3702.11 through R.C. 3702.20, are repealed. It seems probable that ODH will adopt the same the health care services rules currently in O.A.C. Chapter 3701-84 as rules under new R.C. 3722.05.
• Penalties -- R.C. 3722.07 - 3722.08. If a hospital is determined by ODH to have violated any requirement under the new law or the rules adopted under it, ODH may: (1) impose a civil monetary penalty in an amount ranging from $1,000 to $250,000; (2) require the hospital to submit a plan of correction; or (3) suspend the hospital license or the specific health care service if the violation rises to the level of substantial non-compliance. The new law establishes a notice and correction process similar to structure used by CMS. In addition, in the event ODH determines a violation represents an “imminent threat of harm” to one or more hospital patients, ODH may either (1) notify the hospital and require corrective action to remove the conditions giving rise to the imminent threat of harm with subsequent inspection by ODH; or (2) petition the court of common pleas in the county where the hospital is located for injunctive relief to close the hospital, suspend a specific health care service or transfer patients to address the imminent threat of harm.
• Reporting Requirements -- R.C. 3722.11 - 3722.12. Under the new law, licensed hospitals are required to report to ODH contagious, environmental or infectious diseases, illnesses or health conditions, as well as unusual infectious agents or biological toxins for which it provides treatments to patients. Additionally, licensed hospitals operating a maternity unit or newborn nursery are required to report to ODH the number or newborns that were diagnosed as opioid dependent at birth. A third-party organization may report on behalf of the hospital.    

ODH is authorized and required to adopt rules to supplement numerous aspects of the new law.  In addition to the rules to be adopted that are noted above, these rules are to include: (1) procedures for inspections following complaints; (2) fees for initial and renewal applications, license transfer applications, and inspections; (3) procedures for imposing penalties and correcting violations; (4) standards for identifying, monitoring, managing, reporting and reducing exposures to risk conditions, such as Legionella; (5) standards and procedures for emergency preparedness; and (6) any other rules necessary to implement the new law. The rules are required to be adopted within one year from the effective date of the budget bill (i.e., by September 30, 2022).