Iowa Code § 135.62 — IA Code / Title IV / Chapter 135 / Section 135.62
Certificate of need required — exclusions.
Status: in_force

(1) A new institutional health service or changed institutional health service shall not be offered or developed in this state without prior application to the department for and receipt of a certificate of need, pursuant to this subchapter. The application shall be made upon forms furnished or prescribed by the department and shall contain such information as the department may require under this subchapter. The application shall be accompanied by a fee equivalent to three-tenths of one percent of the anticipated cost of the project with a minimum fee of six hundred dollars and a maximum fee of twenty-one thousand dollars. The fee shall be remitted by the department to the treasurer of state, who shall place it in the general fund of the state. If an application is voluntarily withdrawn within thirty calendar days after submission, seventy-five percent of the application fee shall be refunded; if the application is voluntarily withdrawn more than thirty but within sixty days after submission, fifty percent of the application fee shall be refunded; if the application is withdrawn voluntarily more than sixty days after submission, twenty-five percent of the application fee shall be refunded. Notwithstanding the required payment of an application fee under this subsection, an applicant for a new institutional health service or a changed institutional health service offered or developed by an intermediate care facility for persons with an intellectual disability or an intermediate care facility for persons with mental illness as defined pursuant to section 135C.1 is exempt from payment of the application fee.

(2) This subchapter shall not be construed to augment, limit, contravene, or repeal in any manner any other statute of this state which may authorize or relate to licensure, regulation, supervision, or control of, nor to be applicable to:

(2) (a) Private offices and private clinics of an individual physician, dentist, or other practitioner or group of health care providers, except as provided by section 135.61, subsection 16, paragraphs “g”, “h”, and “m”, and section 135.61, subsections 2 and 18.

(2) (b) Dispensaries and first aid stations, located within schools, businesses, or industrial establishments, which are maintained solely for the use of students or employees of those establishments and which do not contain inpatient or resident beds that are customarily occupied by the same individual for more than twenty-four consecutive hours.

(2) (c) Establishments such as motels, hotels, and boarding houses which provide medical, nursing personnel, and other health related services as an incident to their primary business or function.

(2) (d) The remedial care or treatment of residents or patients in any home or institution conducted only for those who rely solely upon treatment by prayer or spiritual means in accordance with the creed or tenets of any recognized church or religious denomination.

(2) (e) A health maintenance organization or combination of health maintenance organizations or an institutional health facility controlled directly or indirectly by a health maintenance organization or combination of health maintenance organizations, except when the health maintenance organization or combination of health maintenance organizations does any of the following:

(2) (e) Constructs, develops, renovates, relocates, or otherwise establishes an institutional health facility.

(2) (e) Acquires major medical equipment as provided by section 135.61, subsection 16, paragraphs “i” and “j”.

(2) (f) A residential care facility, as defined in section 135C.1, including a residential care facility for persons with an intellectual disability, notwithstanding any provision in this subchapter to the contrary.

(2) (g) A reduction in bed capacity of an institutional health facility, notwithstanding any provision in this subchapter to the contrary, if all of the following conditions exist:

(2) (g) The institutional health facility reports to the department the number and type of beds reduced on a form prescribed by the department at least thirty days before the reduction. In the case of a health care facility, the new bed total must be consistent with the number of licensed beds at the facility. In the case of a hospital, the number of beds must be consistent with bed totals reported to the department of inspections, appeals, and licensing for purposes of licensure and certification.

(2) (g) The institutional health facility reports the new bed total on its next annual report to the department.

(2) (g) If these conditions are not met, the institutional health facility is subject to review as a “new institutional health service” or “changed institutional health service” under section 135.61, subsection 16, paragraph “d”, and is subject to sanctions under section 135.72. If the institutional health facility reestablishes the deleted beds at a later time, review as a “new institutional health service” or “changed institutional health service” is required pursuant to section 135.61, subsection 16, paragraph “d”.

(2) (h) The deletion of one or more health services, previously offered on a regular basis by an institutional health facility or health maintenance organization, notwithstanding any provision of this subchapter to the contrary, if all of the following conditions exist:

(2) (h) The institutional health facility or health maintenance organization reports to the department the deletion of the service or services at least thirty days before the deletion on a form prescribed by the department.

(2) (h) The institutional health facility or health maintenance organization reports the deletion of the service or services on its next annual report to the department.

(2) (h) If these conditions are not met, the institutional health facility or health maintenance organization is subject to review as a “new institutional health service” or “changed institutional health service” under section 135.61, subsection 16, paragraph “f”, and is subject to sanctions under section 135.72.

(2) (h) If the institutional health facility or health maintenance organization reestablishes the deleted service or services at a later time, review as a “new institutional health service” or “changed institutional health service” may be required pursuant to section 135.61, subsection 16.

(2) (i) A residential program exempt from licensing as a health care facility under chapter 135C in accordance with section 135C.6, subsection 8.

(2) (j) The construction, modification, or replacement of nonpatient care services, including parking facilities, heating, ventilation and air conditioning systems, computers, telephone systems, medical office buildings, and other projects of a similar nature, notwithstanding any provision in this subchapter to the contrary.

(2) (k) The redistribution of beds by a hospital within the acute care category of bed usage, notwithstanding any provision in this subchapter to the contrary, if all of the following conditions exist:

(2) (k) The hospital reports to the department the number and type of beds to be redistributed on a form prescribed by the department at least thirty days before the redistribution.

(2) (k) The hospital reports the new distribution of beds on its next annual report to the department.

(2) (k) If these conditions are not met, the redistribution of beds by the hospital is subject to review as a new institutional health service or changed institutional health service pursuant to section 135.61, subsection 16, paragraph “d”, and is subject to sanctions under section 135.72.

(2) (l) The replacement or modernization of any institutional health facility if the replacement or modernization does not add new health services or additional bed capacity for existing health services, notwithstanding any provision in this subchapter to the contrary. With respect to a nursing facility, “replacement” means establishing a new facility within the same county as the prior facility to be closed. With reference to a hospital, “replacement” means establishing a new hospital that demonstrates compliance with all of the following criteria through evidence submitted to the department:

(2) (l) Is designated as a critical access hospital pursuant to 42 U.S.C. §1395i-4.

(2) (l) Serves at least seventy-five percent of the same service area that was served by the prior hospital to be closed and replaced by the new hospital.

(2) (l) Provides at least seventy-five percent of the same services that were provided by the prior hospital to be closed and replaced by the new hospital.

(2) (l) Is staffed by at least seventy-five percent of the same staff, including medical staff, contracted staff, and employees, as constituted the staff of the prior hospital to be closed and replaced by the new hospital.

(2) (m) Hemodialysis services provided by a hospital or freestanding facility, notwithstanding any provision in this subchapter to the contrary.

(2) (n) Hospice services provided by a hospital, notwithstanding any provision in this subchapter to the contrary.

(2) (o) The change in ownership, licensure, organizational structure, or designation of the type of institutional health facility if the health services offered by the successor institutional health facility are unchanged. This exclusion is applicable only if the institutional health facility consents to the change in ownership, licensure, organizational structure, or designation of the type of institutional health facility and ceases offering the health services simultaneously with the initiation of the offering of health services by the successor institutional health facility.

(2) (p) The conversion of an existing number of beds by an intermediate care facility for persons with an intellectual disability to a smaller facility environment, including but not limited to a community-based environment which does not result in an increased number of beds, notwithstanding any provision in this subchapter to the contrary, including subsection 4, if all of the following conditions exist:

(2) (p) The intermediate care facility for persons with an intellectual disability reports the number and type of beds to be converted on a form prescribed by the department at least thirty days before the conversion.

(2) (p) The intermediate care facility for persons with an intellectual disability reports the conversion of beds on its next annual report to the department.

(2) (q) Cosmetic, reconstructive, or plastic surgery services provided in an ambulatory surgical center licensed under chapter 135R.

(3) This subchapter shall not be construed to be applicable to a health care facility operated by and for the exclusive use of members of a religious order, which does not admit more than two individuals to the facility from the general public, and which was in operation prior to July 1, 1986. However, this subchapter is applicable to such a facility if the facility is involved in the offering or developing of a new or changed institutional health service on or after July 1, 1986.

(4) The department shall not process applications for an intermediate care facility for persons with an intellectual disability, or consider a new or changed institutional health service for an intermediate care facility for persons with an intellectual disability, unless both of the following conditions are met:

(4) (a) The new or changed beds shall not result in an increase in the total number of medical assistance certified intermediate care facility beds for persons with an intellectual disability in the state, exclusive of those beds at the state resource centers or other state institutions, beyond one thousand six hundred thirty-six beds.

(4) (b) A letter of support for the application is provided by the county board of supervisors, or the board’s designee, in the county in which the beds would be located.

[C79, 81, §135.63; 82 Acts, ch 1194, §3]86 Acts, ch 1150, §1; 86 Acts, ch 1245, §1110; 91 Acts, ch 225, §4; 92 Acts, ch 1043, §1; 92 Acts, ch 1206, §1; 95 Acts, ch 120, §1; 96 Acts, ch 1129, §113; 97 Acts, ch 93, §4 – 8; 2002 Acts, ch 1120, §10; 2006 Acts, ch 1184, §78; 2008 Acts, ch 1191, §47; 2009 Acts, ch 184, §38; 2012 Acts, ch 1019, §7 – 10; 2019 Acts, ch 24, §104; 2023 Acts, ch 19, §1443, 1590 – 1601, 1882C2024, §10A.7132024 Acts, ch 1012, §2; 2024 Acts, ch 1043, §9, 10; 2025 Acts, ch 120, §28, 40, 44 – 52C2026, §135.62