Bankrupt nursing home says it owes Iowa taxpayers $1.1 million

(Fremont Co) A for-profit nursing home that has filed for bankruptcy says it owes Iowa taxpayers more than $1 million in fees the state failed to collect.

In May, the for-profit Tabor Manor Care Center in Fremont County filed for bankruptcy, listing $1.3 million in assets and $2.3 million in liabilities.

By far, the 46-bed nursing home’s single largest creditor is the State of Iowa — specifically, the Iowa Department of Health and Human Services/Iowa Medicaid Enterprises. The home has reported that it owes the agency $1,169, 257.

The debt is tied to unpaid Quality Assurance Assessment, or QAA, fees that date back to 2019, according to bankruptcy records.

QAA fees are a mechanism that has been used by the state since 2009 to drive up expenses at Iowa nursing homes. The quarterly fees paid to the state have the effect of artificially inflating a facility’s cost of doing business. That, in turn, enables the facilities to draw down more money in Medicaid reimbursement from the federal government for resident care.

By design, the increased revenue that the homes see in their Medicaid payments more than offsets the cost of the fees paid to the state.

Under Iowa law, the care facilities are supposed to use most of the increased revenue to boost the pay of their front-line caregivers — which is why the fees are labeled “Quality Assurance Assessment fees.” It’s a circular, but legal, method of increasing the revenue collected by nursing homes and has been approved by the federal government in Iowa and other states.

In recent years, however, it has become clear that not all Iowa nursing homes are actually paying the fees they owe to the state. Last month, the Iowa Capital Dispatch asked the Iowa Department of Health and Human Services for a list of the Iowa care facilities that are behind in their payments, along with the amount owed by each facility.

The department has yet to respond to that request, adding that the information needs to be reviewed by department “leadership” before being disclosed.