HF4550

Purpose

• Reforms aging and disability services by changing licensing rules for foster care, community residential settings, and related care facilities. Aims to better align licensed capacity with current needs, improve resident independence, and manage statewide capacity within budget constraints. Also makes technical updates to multiple statutes and strengthens reporting and oversight.

Main Provisions

• Licensing moratorium (initial licenses)

  • The commissioner may not issue an initial license for child foster care settings (under specified rules) or for adult foster care settings at a location that will not be the license holder’s primary residence for the entire license term.
  • A location’s primary residence status must be disclosed at application and reapplication, and the license certificate must show whether the location is the primary residence.

• Exceptions to the moratorium

  • Exceptions include: 1) Settings where at least 80% of residents are 55 years or older. 2) Foster care licenses replacing existing licenses that were in place on certain dates (May 15, 2009; December 31, 2013) and deemed needed by the commissioner. 3) New licenses needed to replace facilities closing (nursing facilities, ICF/DD, regional treatment centers) or for moving people who no longer require the level of state-operated care. 4) New licenses or licenses needed for certain hospital-level care or for small homes (five or six beds) not designated as certain facilities.
  • These exceptions are available until June 30, 2025.

• Capacity determination and management

  • The commissioner must determine the need for newly licensed foster care homes or community residential settings, considering local capacity, county board recommendations, and other data.
  • Determinations are final and not appealable.
  • The commissioner may adjust capacity, approve new settings, or delicense existing ones to address statewide needs.

• Resource needs and long-term planning

  • A state-level resource need determination process using data (including 144A.351 data) will guide capacity changes.
  • The process involves stakeholder input and may consider proposals from providers or lead agencies to change service type, capacity, or location.
  • The goal is to increase resident independence and better align services with long-term needs.

• Notice and reconsideration rights

  • If beds are reduced, license holders receive written notice by certified mail or personal service.
  • License holders have 20 calendar days to request reconsideration in writing (or within 20 days if served personally).

• Waivers and waiver-funded services

  • Licensees operating in a foster care home who also provide waiver-funded services under HCBS waivers (e.g., 256S, 256B.092, 256B.49) must inform the licensing division about those waiver services.

• Children’s residential treatment services (IMD-related)

  • The commissioner may not issue initial licenses for certain children's residential treatment programs that would be considered an institution for mental diseases (IMD) by CMS.
  • Private-pay programs are exempt from the moratorium.
  • The commissioner may manage existing statewide capacity for these services and can issue licenses if doing so would not increase statewide capacity subject to the moratorium.

• Other related changes

  • The bill recodifies or amends various statutes related to aging, disability services, behavioral health, housing and economic supports, and inspector general provisions.
  • It requires reporting and coordination with multiple departments and sections and includes references to the Family First Prevention Services Act in relation to licensing.

Significant Changes to Existing Law

• Creates a formal moratorium on new licenses for certain foster care and adult foster care settings unless specific exceptions apply.
• Adds a mandatory “primary residence” requirement for license holders and requires disclosure on license certificates.
• Establishes a structured, final determination process for new license need, with limited grounds for appeal.
• Introduces a state-level capacity management framework to reduce or add licensed beds, with a formal delicense mechanism and notice procedures.
• Requires a data-driven resource need determination process (using 144A.351 data and stakeholder input) to guide capacity changes and service realignments.
• Expands reporting duties to ensure license holders inform the state about waiver-funded services and the primary residence status.
• Tightens oversight of children’s residential treatment services by restricting initial licenses that would create CMS IMD-type capacity, with private-pay exemptions.
• Provides a mechanism to address the closure or restructuring of facilities while preserving access to needed care under controlled conditions.

Notable Terms and Phrases (key terminology to expect in search/embeddings)

• licensing moratorium
• initial license
• child foster care
• adult foster care
• primary residence
• Family First Prevention Services Act
• foster care setting
• community residential setting
• 80 percent 55 years or older
• replacement license
• nursing facility
• ICF/DD (intermediate care facility for persons with developmental disabilities)
• regional treatment center
• hospital-level care
• capacity
• delicense
• resource need determination
• 144A.351 data
• waiver-funded services
• HCBS waiver
• 256S waiver
• 256B.092, 256B.49
• Centers for Medicare and Medicaid Services (CMS)
• institution for mental diseases (IMD)
• private pay
• reconsideration (20-day deadline)
• notice of bed reduction

Relevant Terms - licensing moratorium - foster care - adult foster care - primary residence - Family First Prevention Services Act - capacity management - delicense - resource need determination - 144A.351 data - waiver-funded services - HCBS waiver - IMD (institution for mental diseases) - CMS - notice and reconsideration - nursing facility - ICF/DD - hospital-level care