Unlike most other states, Ohio does not currently have a hospital licensure system. While Ohio hospitals are subject to registration and information reporting requirements, as well as licensure requirements for certain discrete hospital services, Ohio does not require hospitals to obtain a state license in order to operate. That may change if certain provisions in Ohio’s current budget bill are adopted.

Ohio’s new hospital licensure statutes, if adopted, would be set forth at Ohio Revised Code Sections 3722.01 et seq., and would require each hospital operating in Ohio to obtain a license from the Director of Health (the “Director”). The licensure statutes define “hospital” broadly to include any “institution or facility that provides inpatient medical or surgical services for a continuous period of longer than twenty-four hours,” including children’s hospitals. There are exceptions for federally operated hospitals, ASFs, nursing homes, residential care facilities, inpatient hospices, and certain other healthcare facilities.   The licensure requirement will apply to both new and existing hospitals.

To be eligible for a hospital license, an applicant hospital must (i) submit a complete application and fee; (ii) be Medicare certified or accredited by a CMS approved national accrediting organization or, in the case of a new hospital, be eligible under rules to be adopted by the Director; (iii) demonstrate the ability to comply with standards established in rules to be adopted by the Director, and (iv) specify the number of hospital beds, including skilled nursing beds, long-term care beds, and special skilled nursing beds. Applicants may be subject to inspection as well, both as part of the application process and on a periodic basis thereafter.

The Director will have one (1) year from the licensure statutes’ effective date to develop related rules and standards, as well as the license application form and process. Because of that, proposed ORC § 3722.03 states that the Director shall not consider any application for licensure until one (1) year after the hospital licensing statutes’ effective date. Per proposed ORC § 3722.02, Ohio’s existing hospitals will have three (3) years from the statutes’ effective date to obtain a license.  This should provide Ohio hospitals enough time to ensure compliance with the Director’s new regulatory standards; however, the licensure process may still pose a compliance challenge to the extent these standards deviate from established standards of Medicare, Medicaid, and the national accrediting bodies.

The current proposed hospital licensure statutes may be reviewed here, beginning on page 2233. Ohio’s budget must be passed by the end of June, so, assuming the hospital licensure statutes are not removed from the budget bill, we expect them to become effective within the next month.