On May 26, after months of debate among state lawmakers, Iowa Gov. Chet Culver signed into law a bill that will impose a quality assurance fee on all for-profit and nonprofit nursing homes in order to leverage matching federal money. The state’s direct-care workers are among those who are expected to benefit.
PHI reported in April that the tax, which was proposed by the Iowa Health Care Association, was expected to generate roughly $33 million, which could then be leveraged to bring in about $60 million in federal matching Medicaid dollars.
The tax will be charged against patient days, which means that although most nursing facilities will see a net revenue gain, a minority — the ones with a low percentage of Medicaid bed days – will see a net loss. Funds paid in under the new law will be deposited in a state-run Quality Assurance Trust Fund.
Opponents, such as Republican Sen. David Hartsuch, criticized the legislation as “a tax on our most vulnerable citizens,” but supporters argued for the financial benefits the tax will bring in the form of federal money flowing to most nursing homes and, also, to direct-care workers.
As explained by Democratic Sen. Joe Bolkcom, D-Iowa City, “60 percent of the new money must be used for employee salaries, wages and benefits — with more than half going specifically to direct-care workers such as certified nurse’s aides” (“Culver signs nursing home resident tax bill,” WCF Courier, May 27).
John Hale, policy director for the Iowa CareGivers Association, said, “We worked closely with legislators like Senator Bolkcom, as well as the nursing home industry, to make sure that this legislation addressed the needs of direct-care workers. The original legislation did not mention direct-care workers; the final bill obligates at least 35% of the new revenue for increases in direct-care worker compensation. It is a win for workers and for those they serve, as we firmly believe that better jobs lead to better care.”
“We’re looking at this as an opportunity to help the nursing facilities,” said Democratic Sen. Amanda Ragan. She pointed to the fact that most nursing homes will be able to draw down more money than they put in, and added that “Much of it’s going to go for direct-care workers that are working very diligently to take care of the frail and elderly” (“Benefits of Nursing Home Tax,” KIMT, May 28).
Although the governor has signed the bill, before the new law can be implemented it must be reviewed and approved by the Centers for Medicare and Medicaid Services.
