Iowa has increased its Medicaid rate, put millions of dollars into workforce development, approved tort reform, and enacted a moratorium on new nursing home licenses, but the state continues to see nursing homes closing. 

Countryside Health Care Center in Sioux City is the most recent to join the unfortunate ranks. Its leaders announced Thursday that the 101-bed facility will close due to financial pressures. That brings to 26 the number of nursing homes the state has lost since June 2022, according to the Iowa Capital Dispatch. The state has lost 29 facilities since 2020.

In an appearance Friday on the Iowa PBS program Iowa Press, the head of the Iowa Health Care Association said that workforce shortages remain the primary cause for closures, particularly for rural nursing homes. 

“The action of the Iowa Legislature this session — pertaining both in terms of a number of policy priorities that assisted facilities as well as appropriations — has helped to slow that down,” association President and CEO Brent Willett said. “But we still have a long road ahead of us.”

The state put into a place a certificate of need moratorium that took effect July 1 and will last for at least 12 months. The law allows the departments of Health and Human Services and Inspections and Appeals to extend the moratorium by six-month increments for no more than 36 months through June 30, 2026. The moratorium can be waived if there is a specialized need or if the average occupancy of all license beds located within a county or contiguous counties exceed 85% occupancy. 

In May, lawmakers approved a $15 million increase in Medicaid rates. Both Willett and Shannon Strickler, president and CEO of LeadingAge Iowa, said the funding would help but is not a panacea.

“It does not address the availability of qualified staff across the state, particularly in rural areas,” Strickler told McKnight’s Long-Term Care News on Friday. “The most significant threat to the long-term care and aging services sector is the availability of a qualified workforce.” 

In April, Iowa Workforce Development announced $13.5 million in grants through its Health Careers Registered Apprenticeship Program for 21 healthcare and education entities to support 1,463 apprentices. The pool for potential nursing home workers could grow by more than 300 due to the grants, McKnight’s Long-Term Care News reported.

At the same time lawmakers increased the Medicaid rates, they approved stricter reporting for providers looking to enter the state that includes information about the ownership structure, including listing all individuals with decision-making authority and their regulatory track record in other states. The Legislature also passed tort reform that Willett described in a LinkedIn post as crucial to addressing a “crisis of access to long-term care.”

“Generational tort reform to kick attorneys who make a living out of putting nursing homes out of business out of our state,” was his observation.

Despite the flurry of legislative wins, the state’s nursing homes continue to struggle. On the PBS program, Willett said that wages have increased by 32% generally, with certified nurse aids seeing a more than 36% increase. Meanwhile, the average nursing home lost $50.19 per patient per day on resident care in 2021 compared to $14.46 per day in 2019. 

Meanwhile, operating costs per resident per day grew by 15% between 2019 and 2021 while revenues for the same period grew by just 6.7%, according to information from LeadingAge Iowa provided to McKnight’s in February. The organization also said that there were more than 5,800 direct care positions open across the state and 1,238 beds had been taken offline since November 2022. 

“Communities unable to find, hire and retain their own staff are forced to rely on staffing agencies, which is not a financially sustainable solution, or halt admissions,” Strickler said. “Additionally, staffing agencies themselves sometimes struggle to find available personnel to help. That’s why the workforce crisis will require a multifaceted approach at the state and federal level, including strategies that help attract people to work in aging services, sustainable revenue streams and legal immigration to boost the amount of available workers.”

Looming over all of this is a federal staffing mandate that the Centers for Medicare & Medicare Services has yet to release. Sector observers expect the agency to require around 4.1 direct care hours per patient per day, which has met with strenuous pushback from providers and their advocates. 

“Every single nursing home in Iowa would hire more staff if that staff were available,” Willett said. “A federal arbitrary mandate … would require, under penalty of ruinous fines, the mandated hiring of people who do not exist to care for people who do. … We should be talking about housing tax credits for direct care workers, childcare assistance, telemedicine expansion. 

“Instead, we are going down the path of an arbitrary mandate which will not create another single worker, but simply penalize employers who are desperately seeking workers today.”