Iowa nursing homes owe taxpayers $10.7 million in unpaid fees

Forty-nine Iowa nursing homes owe the taxpayers more than $10.7 million in fees, according to the Iowa Department of Health and Human Services. (Photo by Getty Images)

Forty-nine Iowa nursing homes owe the taxpayers more than $10.7 million in fees the state has so far failed to collect, according to newly released records.

One for-profit company based in West Des Moines operates 18 care facilities that collectively owe the state $3.6 million in unpaid fees. The company’s top two executives, meanwhile, have made $293,000 in political donations.

The state fees imposed on nursing homes, called Quality Assurance Assessment fees, are a mechanism that has been used since 2009 to artificially inflate the facilities’ cost of doing business.

The increased expense enables the facilities to draw down more money in Medicaid reimbursement for resident care. Often, the increased Medicaid payments more than offset the cost of the fees paid to the state, resulting in a net gain for the homes.

By law, the care facilities are supposed to use that additional money to increase the pay of their front-line caregivers — which is why the fees are called 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.

Last month, the Iowa Capital Dispatch asked the Iowa Department of Health and Human Services for a list of the Iowa care facilities that were behind in their payments, along with the amount owed by each facility.

On Thursday, DHHS provided a list of the facilities. It includes eight nursing homes now subject to sanctions for failure to pay, plus 41 other care facilities that are currently on what the state calls a “repayment plan.”

Collectively, the 49 homes are $10.7 million in arrears on payments. Two of the 49 homes reportedly owe $1 million or more.

The company that appears to owe taxpayers the most is Accura Healthcare of West Des Moines. Eighteen of the for-profit company’s Iowa care facilities are currently on payment plans with the state, and they now owe a combined $3,644,432.97, according to DHHS.

Campaign finance records show that since 2015, Accura Healthcare’s CEO, Ted LeNeave, has personally donated more than $239,000 to GOP campaigns in Iowa and to the political action committee of the industry’ main lobbying organization. That total includes $54,500 LeNeave donated directly for Gov. Kim Reynolds’ campaigns, plus $76,000 LeNeave donated to Iowa Senate Majority Leader Jack Whitver of Grimes.

Since 2021, the president of Accura Healthcare, Lisa Toti, has made $36,000 in political donations in Iowa, including $16,000 contributed to Reynolds’ campaign committees.

The Capital Dispatch was unable to reach LeNeave and Toti at their office on Friday.

Fees should result in pay increases

What’s still not clear is how many Iowa nursing homes are currently complying with the law that requires them to use their additional Medicaid money to increase the pay of front-line caregivers.

In 2022, the most recent year for which data could be found, DHHS reported that of the 379 Iowa nursing homes that were required to spend their new revenue on pay increases for certified nurse aides, 68 of them – or 18% of the total — failed to do so.

An additional 37 homes – or 10% of the total – failed to meet a different standard that required them to spend 60% of their excess revenue on compensation for all staff.

The Quality Assurance Assessment fee program was devised in 2009 as a way for Iowa to provide additional revenue to nursing homes. At the time, state lawmakers assured the public that the influx of new money for care facilities would be used to enhance the pay of nurses, certified nurse aides and other direct-care providers.

However, DHHS has acknowledged that while the legislation behind the program went into great detail on the calculation of fees and the manner which pay increases were to be handled, the law didn’t give DHHS any enforcement power with regard to the pay increases.

Maureen Barton of DHHS said Thursday the department is “working diligently to ensure providers are adhering to repayment plans” on the fees that are imposed, and said DHHS has “made significant progress in bringing down the overall balance.”

Barton said that when a facility falls behind in payments, the state sends “a demand notice” asking the facility to pay the entire amount that’s due. If that doesn’t happen, she said, DHHS can reduce the amount of Medicaid money flowing to the homes in an effort to offset the debt.

The department also has the ability to impose sanctions, she said, and can refer the matter to the Iowa Department of Revenue for collection.

In 2021, the Iowa-based QHC Facilities nursing home chain filed for bankruptcy and informed the court that it owed taxpayers more than $3.9 million in unpaid QAA fees that had accrued over a period of several years.

At the time of its bankruptcy, QHC Facilities also owed the state and federal government at least $2.2 million for unpaid fines and advance payments collected for resident care.

Three months ago, Tabor Manor Care Center in Fremont County filed for bankruptcy, stating that it owed $1,169, 257 in unpaid QAA fees that date back to 2019. (The state says the debt is closer to $999,000.)

Iowa nursing homes subject to sanctions and the amounts owed that are past due:

Caring Acres Nursing & Rehab Center, Anita: $13,325.97

Deerfield Retirement Community, Urbandale: $25,645.44

Keosauqua Health Care Center: $139,735.80

Mt. Ayr Health Care Center: $19,464.90

Newton Health Care Center: $173,195.10

Northbrook Healthcare and Rehab, Cedar Rapids: $190,721.40

Pine Acres Rehab and Care Center, West Des Moines: $382,899.84

Prestige Care Center, Fairfield: $188,258.22

Iowa nursing homes on repayment plans and the amounts owed that are past due:

Rose Haven Nursing Home, Marengo: $242,113.80

Accura Healthcare of Ames: $504,437.70

Accura Healthcare of Aurelia: $40,830.99

Accura Healthcare of Bancroft: $23,936.92

Accura Healthcare of Carroll: $339,221.55

Accura Healthcare of Cascade: $45,748.32

Accura Healthcare of Cherokee: $213,009.57

Accura Healthcare of Cresco: $13,074.24

Accura Healthcare of Knoxville: $423,998.85

Accura Healthcare of Le Mars: $37,821.06

Accura Healthcare of Marshalltown: $435,378.90

Accura Healthcare of Milford: $212,611.47

Accura Healthcare of Newton-East: $450,119.40

Accura Healthcare of Ogden: $23,471.56

Accura Healthcare of Pleasantville: $377,978.25

Accura Healthcare of Pomeroy: $30,821.81

Accura Healthcare of Shenandoah: $51,895.60

Accura Healthcare of Spirit Lake: $399,055.20

Accura Healthcare of Stanton: $21,021.58

Aspire of Primghar: $45,006.37

Carlise Care Center: $1,264,176.82

Casa De Paz Health Care Center, Sioux City: $220,089.65

Cedar Falls Health Care Center: $164,522.17

Crest Haven Care Center, Creston: $18,494.91

Denison Care Center: $22,859.86

Elmwood Care Center: $164,978.52

Fleur Heights Care Center, Des Moines: $1,291,653.33

Garden View Care Center, Shenandoah: $173,729.02

Grandview Healthcare Center, Dayton: $24,114.66

Grundy Care Center: $25,511.07

Iowa City Rehab & Health Care Center: $200,298.15

Lenox Care Center: $15,565.41

Linn Haven Rehab & Healthcare, New Hampton: $182,831.17

Maple Crest Manor, Fayette: $63,573.78

Osage Rehab & Health Care Center: $25,682.50

Pleasant Acres Care Center, Hull: $106,251.07

Premier Estates of Muscatine: $216,951.52

Premier Estates of Toledo: $190,738.35

Sunny Knoll Care Center, Rockwell City: $13,631.94

Tabor Manor Care Center: $999,439.41

Traditions Memory Care, Newton: $290,409.30

Source: Iowa Department of Health and Human Services.