Senate File 476
RELATING TO A QUALITY ASSURANCE ASSESSMENT PROGRAM, NURSING
FACILITY REIMBURSEMENTS, AND PROVIDING MONETARY PENALTIES,
CONTINGENCIES, AND EFFECTIVE DATES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
QUALITY ASSURANCE ASSESSMENT PROGRAM
Section 1. NEW SECTION. 249L.1 TITLE. This chapter
shall be known and may be cited as the "Quality Assurance
Sec. 2. NEW SECTION. 249L.2 DEFINITIONS. As used in
this chapter, unless the context otherwise requires:
1. "Department" means the department of human services.
2. "Direct care worker" means an employee of a nursing
facility who holds a nursing assistant certification, is
employed for the purpose of nursing assistance, and provides
direct care to residents, regardless of the employee's job
3. "Gross revenue" means all revenue reported by the
nursing facility for patient care, room, board and services,
but does not include contractual adjustments, bad debt,
Medicare revenue, or revenue derived from sources other than
nursing facility operations including but not limited to
nonoperating revenue and other operating revenue.
4. "Medically indigent individual" means an individual
eligible for coverage under the medical assistance program who
is a resident of a Medicaid=certified nursing facility.
5. "Nonoperating revenue" means income from activities not
relating directly to the day=to=day operations of a nursing
facility such as gains on the disposal of a facility's assets,
dividends, and interest from security investments, gifts,
grants, and endowments.
6. "Nursing facility" means a licensed nursing facility as
defined in section 135C.1 that is a freestanding facility or a
nursing facility operated by a hospital licensed pursuant to
chapter 135B, but does not include a distinct=part skilled
nursing unit or a swing=bed unit operated by a hospital, or a
nursing facility owned by the state or federal government or
other governmental unit.
7. "Other operating revenue" means income from nonpatient
care services to patients and from sales to and activities for
persons other than patients which may include but are not
limited to such activities as providing personal laundry
service for patients, providing meals to persons other than
patients, gift shop sales, or vending machine commissions.
8. "Patient day" means a calendar day of care provided to
an individual resident of a nursing facility that is not
reimbursed under Medicare, including the date of admission but
not including the date of discharge, unless the dates of
admission and discharge occur on the same day, in which case
the resulting number of patient days is one patient day.
9. "Uniform tax requirement waiver" means a waiver of the
uniform tax requirement for permissible health care=related
taxes as provided in 42 C.F.R. } 433.68(e)(2)(i) and (ii).
Sec. 3. NEW SECTION. 249L.3 QUALITY ASSURANCE ASSESSMENT
== IMPOSED == COLLECTION == DEPOSIT == DOCUMENTATION == CIVIL
1. a. A nursing facility in this state shall be assessed
a quality assurance assessment for each patient day for the
b. The quality assurance assessment shall be implemented
as a broad=based health care=related tax as defined in 42
U.S.C. } 1396b(w)(3)(B).
c. The quality assurance assessment shall be imposed
uniformly upon all nursing facilities, unless otherwise
provided in this chapter.
d. The aggregate quality assurance assessments imposed
under this chapter shall not exceed the lower of three percent
of the aggregate non=Medicare revenues of a nursing facility
or the maximum amount that may be assessed pursuant to the
indirect guarantee threshold as established pursuant to 42
C.F.R. } 433.68(f)(3)(i), and shall be stated on a per patient
2. The quality assurance assessment shall be paid by each
nursing facility to the department on a quarterly basis after
the nursing facility's medical assistance payment rates are
adjusted to include funds appropriated from the quality
assurance trust fund for that purpose. The department shall
prepare and distribute a form upon which nursing facilities
shall calculate and report the quality assurance assessment.
A nursing facility shall submit the completed form with the
assessment amount no later than thirty days following the end
of each calendar quarter.
3. A nursing facility shall retain and preserve for a
period of three years such books and records as may be
necessary to determine the amount of the quality assurance
assessment for which the nursing facility is liable under this
chapter. The department may inspect and copy the books and
records of a nursing facility for the purpose of auditing the
calculation of the quality assurance assessment. All
information obtained by the department under this subsection
is confidential and does not constitute a public record.
4. The department shall collect the quality assurance
assessment imposed and shall deposit all revenues collected in
the quality assurance trust fund created in section 249L.4.
5. If the department determines that a nursing facility
has underpaid or overpaid the quality assurance assessment,
the department shall notify the nursing facility of the amount
of the unpaid quality assurance assessment or refund due.
Such payment or refund shall be due or refunded within thirty
days of the issuance of the notice.
6. a. A nursing facility that fails to pay the quality
assurance assessment within the time frame specified in this
section shall pay, in addition to the outstanding quality
assurance assessment, a penalty of one and five=tenths percent
of the quality assurance assessment amount owed for each month
or portion of each month that the payment is overdue.
However, if the department determines that good cause is shown
for failure to comply with payment of the quality assurance
assessment, the department shall waive the penalty or a
portion of the penalty.
b. If a quality assurance assessment has not been received
by the department by the last day of the month in which the
payment is due, the department shall withhold an amount equal
to the quality assurance assessment and penalty owed from any
payment due such nursing facility under the medical assistance
c. The quality assurance assessment imposed under this
chapter constitutes a debt due the state and may be collected
by civil action, including but not limited to the filing of
tax liens, and any other method provided for by law.
d. Any penalty collected pursuant to this subsection shall
be credited to the quality assurance trust fund.
7. If federal financial participation to match the quality
assurance assessments made under this section becomes
unavailable under federal law, the department shall terminate
the imposition of the assessments beginning on the date the
federal statutory, regulatory, or interpretive change takes
Sec. 4. NEW SECTION. 249L.4 QUALITY ASSURANCE TRUST FUND
== LIMITATIONS OF USE == REIMBURSEMENT ADJUSTMENTS TO NURSING
1. A quality assurance trust fund is created in the state
treasury under the authority of the department. Moneys
received through the collection of the nursing facility
quality assurance assessment imposed under this chapter and
any other moneys specified for deposit in the trust fund shall
be deposited in the trust fund.
2. Moneys in the trust fund shall be used, subject to
their appropriation by the general assembly, by the department
only for reimbursement of services for which federal financial
participation under the medical assistance program is
available to match state funds. Any moneys appropriated from
the trust fund for reimbursement of nursing facilities, in
addition to the quality assurance assessment pass through and
the quality assurance assessment rate add=on which shall be
used as specified in subsection 5, paragraph "b", shall be
used in a manner such that no less than thirty=five percent of
the amount received by a nursing facility is used for
increases in compensation and costs of employment for direct
care workers, and no less than sixty percent of the total is
used to increase compensation and costs of employment for all
nursing facility staff. For the purposes of use of such
funds, "direct care worker", "nursing facility staff",
"increases in compensation", and "costs of employment" mean as
defined or specified in this chapter.
3. The trust fund shall be separate from the general fund
of the state and shall not be considered part of the general
fund of the state. The moneys in the trust fund shall not be
considered revenue of the state, but rather shall be funds of
the quality assurance assessment program. The moneys
deposited in the trust fund are not subject to section 8.33
and shall not be transferred, used, obligated, appropriated,
or otherwise encumbered, except to provide for the purposes of
this chapter. Notwithstanding section 12C.7, subsection 2,
interest or earnings on moneys deposited in the trust fund
shall be credited to the trust fund.
4. The department shall adopt rules pursuant to chapter
17A to administer the trust fund and reimbursements made from
the trust fund.
5. a. The determination of medical assistance
reimbursements to nursing facilities shall continue to be
calculated in accordance with the modified price=based
case=mix reimbursement system as specified in 2001 Iowa Acts,
chapter 192, section 4, subsection 2, paragraph "c". In
addition, moneys that are appropriated from the trust fund for
reimbursements to nursing facilities that serve the medically
indigent shall be used to provide the following nursing
facility reimbursement rate adjustment increases within the
(1) A quality assurance assessment pass=through. This
rate add=on shall account for the cost incurred by the nursing
facility in paying the quality assurance assessment, but only
with respect to the pro rata portion of the assessment that
correlates with the patient days in the nursing facility that
are attributable to medically indigent residents.
(2) A quality assurance assessment rate add=on. This rate
add=on shall be calculated on a per=patient=day basis for
medically indigent residents. The amount paid to a nursing
facility as a quality assurance assessment rate add=on shall
be ten dollars per patient day.
(3) Nursing facility payments for rebasing pursuant to
2001 Iowa Acts, chapter 192, section 4, subsection 3,
paragraph "a", subparagraph (2).
b. (1) It is the intent of the general assembly that
priority in expenditure of rate adjustment increases provided
to nursing facilities through the quality assurance assessment
be related to the compensation and costs of employment for
nursing facility staff.
(2) If the sum of the quality assurance assessment
pass=through and the quality assurance assessment rate add=on
is greater than the total cost incurred by a nursing facility
in payment of the quality assurance assessment, no less than
thirty=five percent of the difference shall be used to
increase compensation and costs of employment for direct care
workers and no less than sixty percent of the difference shall
be used to increase compensation and costs of employment for
all nursing facility staff.
(3) For the purposes of determining what constitutes
increases in compensation and costs of employment the
following shall apply:
(a) Increases in compensation shall include but are not
limited to starting hourly wages, average hourly wages paid,
and total wages including both productive and nonproductive
wages, and as specified by rule of the department.
(b) Increases in total costs of employment shall include
but are not limited to costs of benefit programs with specific
reporting for group health plans, group retirement plans,
leave benefit plans, employee assistance programs, payroll
taxes, workers' compensation, training, education, career
development programs, tuition reimbursement, transportation,
and child care, and as specified by rule of the department.
(c) Direct care workers and nursing facility staff do not
include nursing facility administrators, administrative staff,
or home office staff.
(4) Each nursing facility shall submit to the department,
information in a form as specified by the department and
developed in cooperation with representatives of the Iowa
caregivers association, the Iowa health care association, the
Iowa association of homes and services for the aging, and the
AARP Iowa chapter, that demonstrates compliance by the nursing
facility with the requirements for use of the rate adjustment
increases and other reimbursements provided to nursing
facilities through the quality assurance assessment.
6. The department shall report annually to the general
assembly regarding the use of moneys deposited in the trust
fund and appropriated to the department.
Sec. 5. EFFECTIVE AND IMPLEMENTATION DATES. This division
of this Act takes effect upon enactment. However, actual
implementation of this division of this Act shall be in
accordance with the following:
1. If the department in consultation with the governor
determines that the requests relating to waivers and the
medical assistance state plan amendment as described in
division II of this Act would adversely affect the existing
IowaCare waiver, and the department does not submit such
requests to the United States department of health and human
services, this division of this Act shall not be implemented.
2. If the department in consultation with the governor
determines that the requests relating to waivers and the
medical assistance state plan amendment as described in
division II of this Act would not adversely affect the
existing IowaCare waiver, and does submit such requests to the
United States department of health and human services, this
division of this Act shall only be implemented if the
department receives approval of the requests relating to the
waivers and medical assistance state plan amendment as
specified in division II of this Act, and in accordance with
the provisions specified in division II of this Act.
DIRECTIVES TO DEPARTMENT OF HUMAN SERVICES
Sec. 6. DEFINITIONS. As used in this division of this
Act, "department", "nursing facility", "patient day", and
"uniform tax requirement waiver" mean as defined in section
249L.2, as enacted in this Act.
Sec. 7. DIRECTIVES TO DEPARTMENT OF HUMAN SERVICES. No
later than June 30, 2009, unless the department in
consultation with the governor determines that such requests
will adversely affect the existing IowaCare waiver, the
department shall request approval of all of the following from
the United States department of health and human services:
1. An amendment to the terms and conditions of the
IowaCare waiver to eliminate the provision in which the state
agrees to refrain from imposing any provider tax during the
pendency of the demonstration waiver for IowaCare.
2. A uniform tax requirement waiver to allow the state to
impose varying levels of taxation on providers based on
specified criteria. It is the intent of the general assembly
that the uniform tax requirement waiver sought by the
department be structured to minimize the negative fiscal
impact on nursing facilities.
3. A medical assistance state plan amendment to revise the
state nursing facility reimbursement methodology to, in part,
allow the medical assistance program to reimburse nursing
facilities for the medical assistance portion of the provider
tax paid by the nursing facilities.
Sec. 8. CONTINGENCY PROVISIONS. The quality assurance
assessment created in this Act shall accrue beginning on the
first day of the calendar quarter following the date of
approval of the state plan amendment. However, accrued
quality assurance assessments shall not be collected prior to
completion of both of the following:
1. The approval of the waivers and the medical assistance
state plan amendment by the centers for Medicare and Medicaid
services of the United States department of health and human
2. An appropriation by the general assembly to implement
the nursing facility provider reimbursements as provided in
Sec. 9. EFFECTIVE DATE. This division of this Act, being
deemed of immediate importance, takes effect upon enactment.
JOHN P. KIBBIE
President of the Senate
PATRICK J. MURPHY
Speaker of the House
I hereby certify that this bill originated in the Senate and
is known as Senate File 476, Eighty=third General Assembly.
MICHAEL E. MARSHALL
Secretary of the Senate
Approved , 2009
CHESTER J. CULVER