Legislation being considered in Iowa would place a six-month moratorium of the construction and expansion of nursing homes. The bill also would give Medicaid payers more power in recovering funds from health insurers.
The Iowa Health Care Association supports a temporary moratorium on the certificate of need process “to allow time to research and modernize Iowa’s skilled nursing facility bed need formula,” IHCA President and CEO Brent Willet told the McKnight’s Business Daily. “Once the formula is updated, the certificate of need process will more efficiently match supply with anticipated demand for long-term care services across the state for years to come,” he added.
The state’s CON process for nursing home construction and expansion is intended to help match supply with demand, but the formula has not been updated “for a number of years,” Willet added.
LeadingAge Iowa President and CEO Shannon Strickler said the proposed legislation “was made in consultation with aging services leaders, and includes flexibilities in cases of specialized needs or high occupancy levels in the surrounding area that will help ensure the moratorium won’t make it more difficult for Iowa’s senior to access essential care and services.”
The state senate approved the legislation last week, passing it back to the House with an amendment.
“Basically, we want Medicaid to be the last insurance payment. Every other insurance should pay first,” said State Sen. Mark Costello (R), the bill’s floor manager, according to the Iowa Capital Dispatch.
The bill, the media outlet reported, would add a 2.5% tax on managed care organization premiums, which would be put toward a fund that the Iowa Department of Health and Human Services would appropriate for Medicaid program use. MCOs would be reimbursed through the capitation rate-setting process. The idea is for the state to pay a fixed rate periodically to the MCO based on estimates of healthcare and associated costs for Medicaid recipients, according to the Iowa Capital Dispatch.
The tax and reimbursement process would provide the state $155.8 million in fiscal year 2025 in premium revenue and $103.9 million in fiscal year 2026 and beyond, according to a Legislative Services Agency report.
Nursing homes in Iowa have operated under particularly stressful circumstances in recent years. Since February 2022, at least 17 skilled nursing facilities in the state have closed due to a combination of wage obligations and operating costs. Last week, state lawmakers agreed to a $15 million increase in overall funding for nursing homes as part of a larger budget deal.
