An Iowa nursing home that owes taxpayers more than $1 million has negotiated a 10-year payment plan with state authorities.
In May, the for-profit Tabor Manor Care Center in Fremont County filed for bankruptcy, listing assets of $1.3 million and liabilities of $2.3 million.
By far the 46-bed nursing home’s largest creditor is the state of Iowa – specifically the Iowa Department of Health and Human Services/Iowa Medicaid Enterprises. The home said it owes the agency $1,169,257.
That debt is related to quality assurance assessment (QAA) fees the home owes the state, dating back to 2019, bankruptcy filings show. More than four dozen Iowa nursing homes currently owe the state a total of $10.7 million in unpaid, past-due QAA fees, DHHS filings show.
Last week, Tabor Manor’s lawyers filed an amendment to the company’s proposed financial reorganization plan. The new plan calls for the facility’s owners to pay the state $1 million in past-due QAA fees over the next 10 1/2 years, with the first payments to be made in about six months.
The company would have to pay $10,930 per month on the debt – an amount that includes interest payments at an annual interest rate of 4.25%. In the first few months of payments, interest would be paid at a rate of about $3,500 per month, while repayment would be made at a rate of about $7,400 per month.
Jeffrey D. Goetz, Tabor Manor’s Des Moines-based attorney, noted that the plan still needs to be approved by the bankruptcy court but said the state has approved it in principle.
“I won’t speak for the state, but they have verbally told us they agree to this,” Goetz said. “I can tell you that the terms were thoroughly negotiated and agreed to in principle, and I have no reason to believe the state will object to this.”
Before an agreement was reached on the 10-year payment plan, Tabor Manor owner and manager Mitchell Worcester told the court that the state had only agreed to a relatively short-term payment plan, which the company rejected as unrealistic.
Dozens of households in arrears with payments
The QAA fees are a mechanism the state has used since 2009 to drive up costs in Iowa’s nursing homes. The fees, paid quarterly to the state, have the effect of artificially inflating a facility’s operating costs, which in turn allows facilities to receive more money from the federal government’s Medicaid reimbursement for residents’ care.
The additional income the homes receive from their Medicaid payments more than offsets the cost of the fees they pay to the state.
Iowa state law requires nursing facilities to use most of the additional revenue to increase the salaries of their nursing staff—hence the fees being referred to as “quality assurance assessments.”
However, not all homes in Iowa pay the fees—and of those that do, up to 18 percent do not meet all of the legal requirements to spend the additional Medicaid revenue on pay increases for nursing staff.
According to DHHS, 41 of the 49 households that are behind on their payments are currently on some sort of “repayment plan.” DHHS’ Maureen Barton said the department is “working diligently to ensure providers adhere to repayment plans for the fees charged.”
The company that appears to owe taxpayers the most is West Des Moines-based Accura Healthcare. Eighteen of the company’s for-profit nursing facilities in Iowa are currently on installment payment plans with the state and now owe a total of $3,644,432.97, according to DHHS.
In 2022, DHHS reported to state lawmakers that 68 of the 379 Iowa nursing homes required to spend their increased Medicaid revenue on pay raises for certified nursing assistants had not done so — or 18%.
Another 37 homes – or 10 percent of the total – failed to meet another standard that required them to spend 60 percent of their additional income on compensation for all staff.
Similar compliance rates were reported in 2020.
You can find this story at Iowa Capital Shippingwhich is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) nonprofit organization. Iowa Capital Dispatch maintains editorial independence. If you have any questions, please contact Editor Kathie Obradovich: [email protected].
