Adopted and Filed

Nursing facilities, ch 81

Untitled document

ARC 9279C

HUMAN SERVICES DEPARTMENT[441]

Adopted and Filed

Rulemaking related to nursing facilities

The Department of Health and Human Services hereby rescinds Chapter 81, “Nursing Facilities,” Iowa Administrative Code, and adopts a new chapter with the same title.

Legal Authority for Rulemaking

This rulemaking is adopted under the authority provided in Iowa Code chapter 249A.

State or Federal Law Implemented

This rulemaking implements, in whole or in part, 42 CFR 483.

Purpose and Summary

This rulemaking is in response to Executive Order 10. This chapter provides operational and Medicaid reimbursement rules for nursing facilities.

Public Comment and Changes to Rulemaking

Notice of Intended Action for this rulemaking was published in the Iowa Administrative Bulletin on January 8, 2025, as ARC 8718C. A public hearing was held on the following date(s):

●January 28, 2025

●January 29, 2025

No one attended the public hearings. One public comment was received.

Changes from the Notice have been made. The quality assurance add-on amount in paragraph 81.5(21)“b” was updated from $15 to $37. This was an oversight from the Notice filing and reflects changes that occurred in 2023.

In addition,the Department modified definitions in rule 441—81.1(249A) to reflect that costs related to therapy services provided to residents during inpatient stays that are not billed as an outpatient service are now considered part of non-direct care. This change is being made because of a change at the federal level that instituted a new payment model for nursing facility services. The federal change went into effect on October 1, 2019. The change to use the new model is being implemented by the Department on July 1, 2025. The Department meets quarterly with nursing home associations, and they are aware that this change is going into effect.

Adoption of Rulemaking

This rulemaking was adopted by the Department on April 25, 2025.

Fiscal Impact

This rulemaking has no fiscal impact to the State of Iowa.

Jobs Impact

After analysis and review of this rulemaking, no impact on jobs has been found.

Waivers

Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to 441—Chapter 6.

Review by Administrative Rules Review Committee

The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

Effective Date

This rulemaking will become effective on July 1, 2025.

The following rulemaking action is adopted:

ITEM 1.Rescind 441—Chapter 81 and adopt the following new chapter in lieu thereof:

CHAPTER 81

NURSING FACILITIES

441—81.1(249A) Definitions.

“Abuse” means any of the following that occurs as a result of the willful or negligent acts or omissions of a nursing facility employee:

1.Physical injury to, or injury that is at a variance with the history given of the injury, or unreasonable confinement or unreasonable punishment or assault as defined in Iowa Code section 708.1 of a resident.

2.The commission of a sexual offense under Iowa Code chapter 709 or section 726.2 or 728.12(1), or sexual exploitation under Iowa Code chapter 235B, as a result of the acts or omissions of the facility employee responsible for the care of the resident with or against a resident.

3.Exploitation of a resident, which means the act or process of taking unfair advantage of a resident or the resident’s physical or financial resources for one’s own personal or pecuniary profit without the informed consent of the resident, including theft, by the use of undue influence, harassment, duress, deception, false representation or false pretenses.

4.The deprivation of the minimum food, shelter, clothing, supervision, physical or mental health care, or other care necessary to maintain a resident’s life or health.

“Advance directive” meansthe same as defined in 42 CFR 489.100 (as amended to August 1, 2024).

“Allowable costs” means the price a prudent, cost-conscious buyer would pay a willing seller for goods or services in an arm’s-length transaction, not to exceed the limitations set out in rules.

“Beginning eligibility date” means date of an individual’s admission to the facility or date of eligibility for medical assistance, whichever is the later date.

“Case mix” means a measure of the intensity of care and services used by similar residents in a facility.

“Case-mix index” means a numeric score within a specific range that identifies the relative resources used by similar residents and represents the average resource consumption across a population or sample.

“Civil penalty” means a civil money penalty not to exceed the amount authorized under Iowa Code section 135C.36 for health care facility violations.

“Clinical experience” means application or learned skills for direct resident care in a nursing facility.

“Clock hour” means 60 minutes.

“CMS” means the Centers for Medicare and Medicaid Services of the federal Department of Health and Human Services.

“Complete replacement” means completed construction on a new nursing facility to replace an existing licensed and certified nursing facility. The replacement facility shall have no more licensed beds than the facility being replaced and shall be located either in the same county as the facility being replaced or within 30 miles from the facility being replaced.

“Cost normalization” refers to the process of removing cost variations associated with different levels of resident case mix. Normalized cost is determined by dividing a facility’s per diem direct care component costs by the facility cost report period case-mix index.

“Denial of critical care” is a pattern of care in which the resident’s basic needs are denied or ignored to such an extent that there is imminent or potential danger of the resident suffering injury or death, or is a denial of, or a failure to provide the mental health care necessary to adequately treat the resident’s serious social maladjustment, or is a gross failure of the facility employee to meet the emotional needs of the resident necessary for normal functioning, or is a failure of the facility employee to provide for the proper supervision of the resident.

“Direct care component” means the portion of the Medicaid reimbursement rates that is attributable to the salaries and benefits of registered nurses, licensed practical nurses, certified nursing assistants, rehabilitation nurses, and contracted nursing services.

“Discharged resident” means a resident whose accounts and records have been closed out and whose personal effects have been taken from the facility.

“Facility” means a licensed nursing facility certified in accordance with the provisions of 42 CFR 483.5 (as amended to August 1, 2024) to provide health services and includes hospital-based nursing facilities that are Medicare-certified and provide only skilled level of care and swing-bed hospitals unless stated otherwise.

“Facility-based nurse aide training program” means a nurse aide training program that is offered by a nursing facility and taught by facility employees or under the control of the licensee.

“Facility cost report period case-mix index” is the average of quarterly facilitywide average case-mix indices, carried to four decimal places. The quarters used in this average will be the quarters that most closely coincide with the financial and statistical reporting period. For example, a 01/01/2000-12/31/2000 financial and statistical reporting period would use the facilitywide average case-mix indices for quarters ending 03/31/00, 06/30/00, 09/30/00 and 12/31/00.

“Facilitywide average case-mix index” is the simple average, carried to four decimal places, of all resident case-mix indices based on the last day of each calendar quarter.

“Informed consent” means a resident’s agreement to allow something to happen that is based on a full disclosure of known facts and circumstances needed to make the decision intelligently, i.e., with knowledge of the risks involved or alternatives.

“Laboratory experience” means practicing care-giving skills prior to contact in the clinical setting.

“Level I review” means screening to identify persons suspected of having mental illness or intellectual disability as defined in 42 CFR 483.102 (as amended to August 1, 2024).

“Level II review” means the evaluation of a person identified in a Level I review to determine whether nursing facility services and specialized services are needed.

“Major renovations” means new construction or facility improvements to an existing licensed and certified nursing facility in which the total depreciable asset value of the new construction or facility improvements exceeds $750,000. The $750,000 threshold shall be calculated based on the total depreciable asset value of new construction or facility improvements placed into service during a two-year period ending on the date the last asset was placed into service. When the property costs of an asset have been included in a facility’s financial and statistical report that has already been used in a biennial rebasing, the costs of that asset shall not be considered in determining whether the facility meets the $750,000 threshold.

“Managed care organization” means an entity that (1) is under contract with the department to provide services to Medicaid recipients and (2) meets the definition of “health maintenance organization” as defined in Iowa Code section 514B.1.

“Medicaid average case-mix index” is the simple average, carried to four decimal places, of all resident case-mix indices where Medicaid is known to be the per diem payor source on the last day of the calendar quarter.

“Minimum data set” or “MDS” refers to a federally required resident assessment tool. Information from the MDS is used by the department to determine the facility’s case-mix index for purposes of normalizing per diem allowable direct care costs as provided by paragraph 81.5(16)“b,” for determining the Medicaid average case-mix index to adjust the direct care component pursuant to paragraphs 81.5(16)“c” and “e,” the excess payment allowance pursuant to paragraph 81.5(16)“d,” and the limits on reimbursement components pursuant to paragraph 81.5(16)“f.” MDS is described in subrule 81.12(9).

“Minimum food, shelter, clothing, supervision, physical or mental health care, or other care” means that food, shelter, clothing, supervision, physical or mental health care, or other care that, if not provided, would constitute denial of critical care.

“Mistreatment” means any intentional act, or threat of an act, coupled with the apparent ability to execute the act, which causes or puts another person in fear of mental anguish, humiliation, deprivation or physical contact that is or will be painful, insulting or offensive. Actions utilized in providing necessary treatment or care in accordance with accepted standards of practice are not considered mistreatment.

“New construction” means the construction of a new nursing facility that does not replace an existing licensed and certified facility and that requires the provider to obtain a certificate of need pursuant to Iowa Code chapter 135, division VI.

“Non-direct care component” means the portion of Medicaid reimbursement rates attributable to administrative, environmental, property, and support care costs reported on the financial and statistical report. Support care costs will include costs related to therapy services provided to residents during inpatient stays and not billed as an outpatient service.

“Non-facility-based nurse aide training program” means a nurse aide training program that is offered by an organization that is not licensed to provide nursing facility services.

“Non-state government owned nursing facility” or “NSGO nursing facility” is a nursing facility owned by a governmental entity that is not the state.

“Nurse aide” means any individual who is not a licensed health professional or volunteer providing nursing or nursing-related services to residents in a nursing facility.

“Nurse aide registry” means the nurse aide registry within the department of inspections appeals, and licensing.

“Nurse aide training and competency evaluation programs” or “NATCEP” means educational programs approved by the department of inspections, appeals, and licensing for nurse aide training as designated in subrule 81.13(3).

“Nursing facility level of care” means that the following conditions are met:

1.The presence of a physical or mental impairment that restricts the member’s daily ability to perform the essential activities of daily living, bathing, dressing, and personal hygiene, and impedes the member’s capacity to live independently.

2.The member’s physical or mental impairment is such that self-execution of required nursing care is improbable or impossible.

“PASRR” means a Level I screening or a Level II evaluation for mental illness or intellectual disability for all persons who live in or seek entry to a Medicaid-certified nursing facility, as required by 42 CFR Part 483, Subpart C (as amended to August 1, 2024).

“Patient-day-weighted median cost” means the per diem cost of the nursing facility that is at the median per diem cost of all nursing facilities based on patient days provided when per diem allowable costs are ranked from low to high. A separate patient-day-weighted median cost amount shall be determined for the direct care and non-direct care components.

“Physical abuse” means any nonaccidental physical injury, or injury that is at variance with the history given of it, suffered by a resident as the result of the acts or omissions of a person responsible for the care of the resident.

“Physical injury” means damage to any bodily tissue to the extent that the tissue must undergo a healing process in order to be restored to a sound and healthy condition, or damage to any bodily tissue to the extent that the tissue cannot be restored to a sound and healthy condition, or damage to any bodily tissue that results in the death of the person who has sustained the damage.

“Poor performing facility” or “PPF” is a facility designated by the department of inspections, appeals, and licensing as a PPF based on surveys conducted by the department of inspections, appeals, and licensing pursuant to subrule 81.12(1). A facility shall be designated a PPF if it has been cited for substandard quality of care on the current standard survey and it:

1.Has been cited for substandard quality of care or immediate jeopardy on at least one of the previous two standard surveys;

2.Has a history of substantiated complaints during the last two years;

3.Has a current deficiency for not having a quality assurance program; or

4.Does not have an effective quality assurance program as defined in paragraph 81.12(19)“o.”

“Primary instructor” means a registered nurse responsible for teaching a state-approved nurse aide training course.

“Program coordinator” means a registered nurse responsible for administrative aspects of a state-approved nurse aide training course.

“Rate determination letter” means the letter that is distributed quarterly by the department to each nursing facility notifying the facility of the facility’s Medicaid reimbursement rate calculated in accordance with this rule and of the effective date of the reimbursement rate.

“Skilled nursing facility level of care” means that the following conditions are met:

1.The member’s medical condition requires skilled nursing services or skilled rehabilitation services as defined in 42 CFR 409.31(a), 409.32, and 409.34 (as amended to August 1, 2024).

2.Services are provided in accordance with the general provisions for all Medicaid providers and services as described in rule 441—79.9(249A).

3.Documentation submitted for review indicates that the member has:

●A physician order for all skilled services.

●Services that require the skills of medical personnel, including registered nurses, licensed practical nurses, physical therapists, occupational therapists, speech pathologists, or audiologists.

●An individualized care plan that identifies support needs.

●Confirmation that skilled services are provided to the member.

●Skilled services that are provided by, or under the supervision of, medical personnel as described above.

●Skilled nursing services that are needed and provided seven days a week or skilled rehabilitation services that are needed and provided at least five days a week.

“Skills performance record” means a record of major duties and skills taught that consists of, at a minimum:

1.A listing of the duties and skills expected to be learned in the program.

2.Space to record the date when the aide performs the duty or skill.

3.Space to note satisfactory or unsatisfactory performance.

4.The signature of the instructor supervising the performance.

“Special population nursing facility” refers to a nursing facility that serves the following populations:

1.One hundred percent of the residents served are aged 30 and under and require the skilled level of care.

2.Seventy percent of the residents served require the skilled level of care for neurological disorders.

3.One hundred percent of the residents require care from a facility licensed by the department of inspections, appeals, and licensing as an intermediate care facility for persons with mental illness.

4.One hundred percent of the residents require care from a facility licensed by the department of inspections, appeals, and licensing as an intermediate care facility for persons with medical complexity.

“Surgical or other invasive procedure” means an operative procedure in which skin or mucous membranes and connective tissue are incised or an instrument is introduced through a natural body orifice. Surgical or other invasive procedures include a range of procedures from minimally invasive dermatological procedures (biopsy, excision, and deep cryotherapy for malignant lesions) to extensive multiorgan transplantation. Surgical or other invasive procedures include all procedures described by the codes in the surgery section of the Current Procedural Terminology (CPT) published by the American Medical Association, as amended to August 1, 2024, and other invasive procedures such as percutaneous transluminal angioplasty and cardiac catheterization. Surgical or other invasive procedures include minimally invasive procedures involving biopsies or placement of probes or catheters requiring the entry into a body cavity through a needle or trocar. “Surgical or other invasive procedure” does not include use of instruments such as otoscopes for examinations or very minor procedures such as drawing blood.

“Terminated from the Medicare or Medicaid program” means a facility has lost the final appeal to which it is entitled.

“Testing entity” means a person, agency, institution, or facility approved by the department of inspections, appeals, and licensing to take responsibility for obtaining, keeping secure and administering the competency test and reporting nurse aide scores to the nurse aide registry.

This rule is intended to implement Iowa Code sections 249A.2(6), 249A.3(2)“a,” and 249A.4.

441—81.2(249A) Initial approval for nursing facility care.

81.2(1) Need for nursing facility care. Residents of nursing facilities must be in need of either nursing facility care or skilled nursing care. Payment will be made for nursing facility care residents only upon certification of the need for the level of care by a licensed physician of medicine or osteopathy and approval of the level of care by the department.

a.Decisions on level of care, subject to paragraph 81.2(1)“b,” will be made by the department within two working days of receipt of medical information. The department determines whether the level of care provided or to be provided should be approved based on medical necessity and the appropriateness of the level of care under 441—subrules 79.9(1) and 79.9(2).

b.For residents subject to a Level II PASRR review pursuant to subrule 81.2(3), the level of care determination will be made as part of the Level II PASRR review, based on medical necessity and the appropriateness of the level of care under 441—subrules 79.9(1) and 79.9(2).

c.Adverse level of care decisions may be appealed to the department pursuant to 441—Chapter 7.

81.2(2) Preadmission review. The department’s contractor for PASRR screening and evaluation shall complete a Level I review for all persons seeking admission to a Medicaid-certified nursing facility, regardless of the source of payment for the person’s care. When a Level I review identifies evidence for the presence of mental illness or intellectual disability, the department’s contractor for PASRR evaluations shall complete a Level II review before the person is admitted to the facility.

a.Exceptions to Level II review. Persons in the following circumstances may be exempted from Level II review based on a categorical determination that, in that circumstance, admission to or residence in a nursing facility is normally needed and the provision of specialized services for mental illness or intellectual disability is normally not needed.

(1)The person’s attending physician certifies that the person is terminally ill with death expected within six months, the person requires nursing care or supervision due to the person’s physical condition, and the person is not a danger to self or others. If the person’s nursing facility stay exceeds six months, a Level II review must be completed.

(2)The severity of the person’s illness results in impairment so severe that the person could not be expected to benefit from specialized services, and the person does not present a danger to self or others. This category includes persons who are comatose, who function at brain-stem level, who are ventilator-dependent, or who have diagnoses such as Parkinson’s disease, Huntington’s chorea, amyotrophic lateral sclerosis, chronic obstructive pulmonary disease (COPD), or congestive heart failure (CHF).

(3)The person is suffering from delirium. Exemptions made on a basis of delirium are valid until the delirium clears or for seven days, whichever is sooner.

(4)The person is in an emergency situation that requires protective services with placement in the nursing facility. A Level II review must be completed if the admission lasts more than seven days.

(5)The admission is for the purpose of providing respite to the person’s caregiver. If the nursing facility stay exceeds 30 days, a Level II review must be completed.

(6)The person has dementia in combination with an intellectual disability.

(7)The person has been approved for specialized services in another facility based on a previous Level II evaluation, the specialized services still meet the person’s needs, and the receiving facility agrees to provide the specialized services.

(8)The person is transferring directly from receiving acute hospital inpatient care and requires nursing facility services for the same acute physical illness for which hospital care was received, and the person’s attending physician certifies before the admission that the person is likely to require less than 30 days of nursing facility services. If the person is later found to require more than 30 days of nursing facility care, a Level II review must be completed within 40 calendar days of the person’s admission date.

(9)The person:

1.Is transferring to a nursing facility directly from receiving acute hospital inpatient care, and

2.Requires nursing facility services for convalescence from the same acute physical illness for which the person received hospital care, and

3.Is clearly sufficiently psychiatrically and behaviorally stable enough for nursing facility admission, and

4.Before entering the facility, has been certified by the attending physician as likely to require less than 60 days of nursing facility services.

b.Outcome of Level II review. The Level II review shall determine:

(1)Whether nursing facility care or skilled nursing care is medically necessary and appropriate under 441—subrules 79.9(1) and 79.9(2) for the person seeking admission;

(2)Whether the person seeking admission needs specialized services for mental illness as defined in paragraph 81.12(14)“b,” using the procedures set forth in 42 CFR 483.134 (as amended to August 1, 2024); and

(3)Whether the person seeking admission needs specialized services for intellectual disability as defined in paragraph 81.12(14)“c,” using the procedures set forth in 42 CFR 483.136 (as amended to August 1, 2024).

c.The department or its designee will review each Level II evaluation and plan for obtaining needed specialized services before the person’s admission to a nursing facility to determine whether nursing facility care or skilled nursing care is medically necessary and whether the nursing facility is an appropriate placement.

d.Nursing facility payment under the Iowa Medicaid program will be made for Medicaid members residing in the nursing facility:

(1)Only if a Level I review was completed prior to admission;

(2)For persons with mental illness or intellectual disability, only if a Level II review has been completed, or an exception under paragraph 81.2(3)“a” has been approved, and it is determined by the department that nursing facility care or skilled nursing care is medically necessary and appropriate and that the person’s treatment needs related to a mental illness or intellectual disability will be or are being met.

e.Adverse PASRR decisions may be appealed to the department pursuant to 441—Chapter 7.

f.A nursing facility requesting an administrative hearing regarding a PASRR determination must have the prior, express, signed, written consent of the resident or the resident’s lawfully appointed guardian to request such a hearing. Notwithstanding any contrary provision in 441—Chapter 7, no hearing will be granted unless the nursing facility submits a document providing such resident’s consent to the request for a state fair hearing. The document must specifically inform the resident that protected health information (PHI) may be discussed at the hearing and may be made public in the course of the hearing and subsequent administrative and judicial proceedings. The document must contain language that indicates the resident’s knowledge of the potential for PHI to become public and that the resident knowingly, voluntarily, and intelligently consents to the nursing facility’s bringing the state fair hearing on the resident’s behalf.

This rule is intended to implement Iowa Code sections 249A.2(6), 249A.3(2)“a,” and 249A.4.

441—81.3(249A) Arrangements with residents.

81.3(1) Financial participation by resident. A resident’s payment for care may include any voluntary payments made by family members toward cost of care of the resident. The resident’s client participation and medical payments from a third party shall be paid toward the total cost of care for the month before any state payment is made. The state will pay the balance of the cost of care for the remainder of the month. The facility shall make arrangements directly with the resident for payment of client participation.

81.3(2) Personal needs account. When a facility manages the personal needs funds of a resident, it shall establish and maintain a system of accounting for expenditures from the resident’s personal needs funds. (See paragraph 81.12(5)“c.”) The funds shall be deposited in a bank within the state of Iowa insured by FDIC. Expense for bank service charges for this account is an allowable expense under rule 441—81.5(249A) if the service cannot be obtained free of charge. The department will charge back to the facility any maintenance item included in the computation of the audit cost that is charged to the resident’s personal needs when the charge constitutes double payment. Unverifiable expenditures charged to personal needs accounts may be charged back to the facility. The accounting system is subject to audit by representatives of the department and shall meet the following criteria:

a.Upon admittance, a ledger sheet shall be credited with the resident’s total incidental money on hand. Thereafter, the ledger shall be kept current on a monthly basis. The facility may combine the accounting with the disbursement section showing the date, amount given the resident, and the resident’s signature. A separate ledger shall be maintained for each resident.

b.When something is purchased for the resident and is not a direct cash disbursement, each expenditure item in the ledger shall be supported by a signed, dated receipt. The receipt shall indicate the article furnished for the resident’s benefit.

c.Personal funds shall only be turned over to the resident, the resident’s guardian, or other persons selected by the resident. With the consent of the resident, when the resident is able and willing to give consent the administrator may turn over personal funds to a close relative or friend of the resident to purchase a particular item. A signed, dated receipt shall be required to be deposited in the resident’s files.

d.The ledger and receipts for each resident shall be made available for periodic audits by an accredited department representative. Audit certification will be made by the department’s representative at the bottom of the ledger sheet. Supporting receipts may then be destroyed.

e.Upon a patient’s death, a receipt shall be obtained from the next of kin, the resident’s guardian, or the representative handling the funeral before releasing the balance of the personal needs funds. In the event there is no next of kin or guardian available and there are no outstanding funeral expenses, any funds shall revert to the department. In the event that an estate is opened, the department will turn the funds over to the estate.

81.3(3) Safeguarding personal property. The facility shall safeguard the resident’s personal possessions. Safeguarding shall include but is not limited to:

a.Providing a method of identification of the resident’s suitcases, clothing, and other personal effects, and listing these on an appropriate form attached to the resident’s record at the time of admission. These records shall be kept current. Any personal effects released to a relative of the resident shall be covered by a signed receipt.

b.Providing adequate storage facilities for the resident’s personal effects.

c.Ensuring that all mail is delivered unopened to the resident to whom it is addressed, except in those cases where the resident is too confused, as documented in the person’s permanent medical record, to receive it, in which case the mail is held unopened for the resident’s conservator or relatives. Mail may be opened by the facility in cases where the resident or relatives or guardian have given permission in writing for mail to be opened and read to the resident.

This rule is intended to implement Iowa Code sections 249A.2, 249A.3(2)“a,” and 249A.4.

441—81.4(249A) Discharge and transfer. (See paragraph 81.12(6)“c.”)

81.4(1) Notice. When a Medicaid member requests transfer or discharge, or another person requests this for the member, the administrator shall promptly notify the department. This shall be done in sufficient time to permit a social service worker or case manager to assist in the planning for the transfer or discharge.

81.4(2) Case activity report. A Case Activity Report shall be submitted to the department whenever a Medicaid applicant or recipient enters the facility, changes level of care, or is discharged from the facility.

81.4(3) Plan. The administrator and staff shall assist the resident in planning for transfer or discharge through development of a discharge plan.

81.4(4) Transfer records. When a resident is transferred to another facility, transfer information shall be summarized from the facility’s records in a copy to accompany the resident. This information shall include:

a.A transfer form of diagnosis.

b.Aid to daily living information.

c.Transfer orders.

d.Nursing care plan.

e.Physician’s orders for care.

f.The resident’s personal records.

g.When applicable, the personal needs fund record.

h.Resident care review team assessment.

81.4(5) Unused client participation. When a resident leaves the facility during the month, any unused portion of the resident’s client participation shall be refunded.

This rule is intended to implement Iowa Code sections 249A.2, 249A.3(2)“a,” and 249A.4.

441—81.5(249A) Financial and statistical report and determination of payment rate. With the exception of hospital-based nursing facilities that are Medicare-certified and provide only the skilled level of care, herein referred to as Medicare-certified hospital-based nursing facilities, all facilities in Iowa wishing to participate in the program shall submit a Financial and Statistical Report to the department. All Medicare-certified hospital-based nursing facilities must submit a copy of their Medicare cost report. These reports shall be based on the following rules.

81.5(1) Failure to maintain records. Failure to adequately maintain fiscal records, including census records, medical charts, ledgers, journals, tax returns, canceled checks, source documents, invoices, and audit reports by or for a facility, may result in the penalties specified in subrule 81.14(1).

81.5(2) Accounting procedures. Financial information shall be based on that appearing in the audited financial statements of the facility. If the financial statements have been compiled, reviewed or audited by an outside firm, a copy of the compilation, review or audit, including notes, for the reporting period shall be included with the submission of the financial and statistical report. Adjustments to convert to the accrual basis of accounting shall be made when the records are maintained on other accounting bases.

a.Facilities that are a part of a larger health facility extending short-term, intensive, or other health care not generally considered nursing care may submit a cost apportionment schedule prepared in accordance with recognized methods and procedures. A schedule shall be required when necessary for a fair presentation of expense attributable to nursing facility patients.

b.Costs for patient care services shall be divided into the subcategories of “direct patient care costs” and “support care costs.” Costs associated with food and dietary wages shall be included in the “support care costs” subcategory.

81.5(3) Submission of reports. All nursing facilities, except the Iowa Veterans Home, shall submit reports electronically, in a format approved by the department, to the department not later than the last day of the fifth calendar month after the close of the provider’s reporting year. The Iowa Veterans Home shall submit the report electronically, in a format approved by the department, no later than three months after the close of each six-month period of the facility’s established fiscal year. The annual financial report shall coincide with the fiscal year used by the provider to report federal income taxes for the operation unless the provider requests in writing that a different reporting period be used. Such a request shall be submitted within 60 days after the initial certification of a provider. The option to change the reporting period may be exercised only one time by a provider, and the reporting period shall coincide with the fiscal year end for Medicare cost-reporting purposes. If a reporting period other than the tax year is established, audit trails between the periods are required, including reconciliation statements between the provider’s records and the annual financial report.

a.Nursing facilities that are certified to provide Medicare-covered skilled nursing facility services are required to submit a copy of their Medicare cost report that covers their most recently completed historical reporting period as submitted to the Medicare fiscal intermediary.

b.The submission shall include a working trial balance that corresponds to all financial data contained on the cost report. The working trial balance must provide sufficient detail to enable the department to reconcile accounts reported on the general ledger to those on the financial and statistical report. For reporting costs that are not directly assigned to the nursing facility in the working trial balance, an allocation method must be identified for each line, including the statistics used in the calculation. Reports submitted without a working trial balance shall be considered incomplete, and the facility shall be subject to the rate reductions set forth in paragraph 81.5(3)“e.”

c.If the financial statements have been compiled, reviewed or audited by an outside firm, a copy of the compilation, review or audit, including notes, for the reporting period shall be included with the submission of the financial and statistical report as set forth in subrule 81.5(2).

d.For nursing facilities, except the Iowa Veterans Home, an extension of the five-month filing period shall not be granted unless one is granted for the filing of the Medicare cost report. If the Medicare filing deadline for submitting the Medicare cost report is delayed by the Medicare fiscal intermediary, the Medicaid cost report and all required forms shall be submitted on the date Medicare requires submission of its report. Notice of the extension shall be presented to the department within ten days of a decision by Medicare.

e.A complete submission shall include all of the items identified in this subrule. Failure to submit a complete report that meets the requirements of this rule within the stated time shall reduce payment to 75 percent of the current rate.

(1)The reduced rate will be effective the first day of the sixth month following the provider’s fiscal year end and will remain in effect until the first day of the month after the delinquent report is received by the department.

(2)The reduced rate will be paid for no longer than three months, after which time no further payments will be made until the first day of the month after the delinquent report is received by the department.

f.When a nursing facility continues to include in the total costs an item or items that had in a prior period been removed through an adjustment made by the department or its contractor, the contractor shall recommend to the department that the per diem be reduced to 75 percent of the current payment rate for the entire quarter beginning the first day of the fourth month after the facility’s fiscal year end. If the adjustment has been contested and is still in the appeals process, the provider may include the cost, but must include sufficient detail so that the department can determine if a similar adjustment is needed in the current period. The department may, after considering the seriousness of the offense, make the reduction.

g.Nothing in this subrule relieves a facility of its obligation to immediately inform the department that the facility has retained Medicaid funds to which the facility is not entitled as a result of any cost report process. A facility shall notify the department when the facility determines that funds have been incorrectly paid or when an overpayment has been detected.

h.A facility may change its fiscal year one time in any two-year period. If the facility changes its fiscal year, the facility shall notify the department 60 days prior to the first date of the change.

81.5(4) Payment at new rate.

a.Except for state-operated nursing facilities and special population nursing facilities, payment rates will be updated July 1, 2001, and every second year thereafter with new cost report data, and adjusted quarterly to account for changes in the Medicaid average case-mix index. For nursing facilities receiving both an ICF and SNF Medicaid rate effective June 30, 2001, the June 30, 2001, Medicaid rate referenced in subparagraphs (1) and (2) below will be the patient-day-weighted average of the ICF and SNF Medicaid rates effective June 30, 2001, excluding the case-mix transition add-on amount.

(1)The Medicaid payment rates for services rendered from July 1, 2001, through June 30, 2002, will be 66.67 percent of the facility’s Medicaid rate effective June 30, 2001, excluding the case-mix transition add-on amount, plus an inflation allowance of 6.21 percent, not to exceed $94, and 33.33 percent of the July 1, 2001, modified price-based rate pursuant to subrule 81.5(16). In no case will the July 1, 2001, Medicaid rate be less than the Medicaid rate effective June 30, 2001, excluding the case-mix transition add-on amount, and increased by a 6.21 percent inflation allowance.

(2)Payment rates for services rendered from July 1, 2002, through June 30, 2003, shall be 33.33 percent of the facility’s Medicaid rate effective June 30, 2001, excluding the case-mix transition add-on amount, plus an inflation allowance of 6.21 percent, and an additional inflation factor based on the CMS/SNF Total Market Basket Index. However, the current system rate to be used effective July 1, 2002, shall not exceed $94, times an inflation factor pursuant to subrule 81.5(18), and 66.67 percent of the July 1, 2002, modified price-based rate. In no case will the July 1, 2002, Medicaid rate be less than the Medicaid rate effective June 30, 2002, plus an inflation factor pursuant to subrule 81.5(18) projected for the following 12 months.

(3)Payment rates for services rendered from July 1, 2003, and thereafter will be 100 percent of the modified price-based rate.

b.The Medicaid payment rate for special population nursing facilities will be updated annually without a quarterly adjustment.

c.The Medicaid payment rate for state-operated nursing facilities will be updated annually without a quarterly adjustment.

81.5(5) Accrual basis. Facilities not using the accrual basis of accounting shall adjust recorded amounts to the accrual basis. Records of cash receipts and disbursements shall be adjusted to reflect accruals of income and expense.

81.5(6) Census of Medicaid members. Census figures of Medicaid members shall be obtained on the last day of the month ending the reporting period.

81.5(7) Patient days. In determining inpatient days, a patient day is that period of service rendered a patient between the census-taking hours on two successive days, the day of discharge being counted only when the patient was admitted that same day.

81.5(8) Opinion of accountant. The department may require that an opinion of a certified public accountant or public accountant accompany the report when adjustments made to prior reports indicate disregard of the certification and reporting instructions.

81.5(9) Calculating patient days. When calculating patient days, facilities shall use an accumulation method.

a.Census information shall be based on a patient’s status at midnight at the end of each day.

b.When a recipient is on a reserve bed status and the department is paying on a per diem basis for the holding of a bed, or any day a bed is reserved for a public assistance or nonpublic assistance patient and a per diem rate for the bed is charged to any party, the reserved days shall be included in the total census figures for inpatient days.

81.5(10) Revenues. Revenues shall be reported as recorded in the general books and records. Expense recoveries credited to expense accounts shall not be reclassified in order to be reflected as revenues.

a.Routine daily services shall represent the established charge for daily care. Routine daily services include room, board, nursing services, therapies, and such services as supervision, feeding, pharmaceutical consulting, over-the-counter drugs, incontinence, and similar services, for which the associated costs are in nursing service. Routine daily services shall not include:

(1)Laboratory or diagnostic radiology services, unless the service is provided by facility staff using facility equipment, and

(2)Prescription (legend) drugs.

b.Revenue from ancillary services provided to patients shall be applied in reduction of the related expense.

c.Revenue from the sale of medical supplies, food or services to employees or nonresidents of the facility shall be applied in reduction of the related expense. Revenue from the sale to private pay residents of items or services that are included in the medical assistance per diem will not be offset.

d.Investment income adjustment is necessary only when interest expense is incurred, and only to the extent of the interest expense.

e.Laundry revenue shall be applied to laundry expense.

f.Accounts receivable charged off or provision for uncollectible accounts shall be reported as a deduction from gross revenue.

81.5(11) Limitation of expenses. Certain expenses that are not normally incurred in providing patient care shall be eliminated or limited according to the following:

a.Federal and state income taxes are not allowed as reimbursable costs.

b.Fees paid directors and nonworking officers’ salaries are not allowed as reimbursable costs.

c.Bad debts are not an allowable expense.

d.Charity allowances and courtesy allowances are not an allowable expense.

e.Personal travel and entertainment are not allowable as reimbursable costs. Certain expenses such as rental or depreciation of a vehicle and expenses of travel that include both business and personal costs shall be prorated. Amounts that appear to be excessive may be limited after consideration of the specific circumstances. Records shall be maintained to substantiate the indicated charges.

(1)Commuter travel by the owner(s), owner-administrator(s), administrator, nursing director or any other employee is not an allowable cost (from private residence to facility and return to residence).

(2)The expense of one car or one van or both designated for use in transporting patients shall be an allowable cost. All expenses shall be documented by a sales slip, invoice or other document setting forth the designated vehicle as well as the charges incurred for the expenses to be allowable.

(3)At the time of annual contract renewal with the Iowa department of transportation, each facility that supplies transportation services as defined in Iowa Code section 324A.1 shall provide current documentation of compliance with or exemption from public transit coordination requirements as found in Iowa Code section 324A.5 and 761—Chapter 910 of the Iowa department of transportation’s rules. Failure to cooperate in obtaining or in providing the required documentation of compliance or exemption after receipt from the Iowa department of transportation shall result in disallowance of vehicle costs and other costs associated with transporting residents.

(4)Expenses related to association business meetings, limited to individual members of the association who are members of a national affiliate, and expenses associated with workshops, symposiums, and meetings that provide administrators or department heads with hourly credits required to comply with continuing education requirements for licensing, are allowable expenses.

(5)Travel of an emergency nature required for supplies, repairs of machinery or equipment, or building is an allowable expense.

(6)Travel for which a patient must pay is not an allowable expense.

(7)Allowable expenses in subparagraphs (2) through (5) above are limited to 6 percent of total administrative expense.

f.Entertainment provided by the facility for participation of all residents who are physically and mentally able to participate is an allowable expense except that entertainment for which the patient is required to pay is not an allowable expense.

g.Loan acquisition fees and standby fees are not considered part of the current expense of patient care, but should be amortized over the life of the related loan.

h.A reasonable allowance of compensation for services of owners or immediate relatives is an allowable cost, provided the services are actually performed in a necessary function. For this purpose, the following persons are considered immediate relatives: husband and wife; natural parent, child and sibling; adopted child and adoptive parent; stepparent, stepchild, stepbrother, and stepsister; father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, and sister-in-law; grandparent and grandchild. Adequate time records shall be maintained. Adjustments may be necessary to provide compensation as an expense for nonsalaried working proprietors and partners. Members of religious orders serving under an agreement with their administrative office are allowed salaries paid persons performing comparable services. When maintenance is provided these persons by the facility, consideration shall be given to the value of these benefits and this amount shall be deducted from the amount otherwise allowed for a person not receiving maintenance.

(1)Compensation means the total benefit received by the owner or immediate relative for services rendered. Compensation includes all remuneration, paid currently or accrued, for managerial, administrative, professional and other services rendered during the period. Compensation includes all items that should be reflected on IRS Form W-2, Wage and Tax Statement, including but not limited to salaries, wages, and fringe benefits; the cost of assets and services received; and deferred compensation. Fringe benefits shall include but are not limited to costs of leave, employee insurance, pensions and unemployment plans. If the facility’s fiscal year end does not correlate to the period of the W-2, a reconciliation between the latest issued W-2 and current compensation shall be required to be disclosed to the department. Employer portions of payroll taxes associated with amounts of compensation that exceed the maximum allowed compensation shall be considered unallowable for reimbursement. All compensation paid to related parties, including payroll taxes, shall be required to be reported to the department with the submission of the financial and statistical report. If it is determined that there have been undisclosed related-party salaries, the cost report will be determined to have been submitted incomplete and the facility shall be subject to the penalties set forth in paragraph 81.5(3)“e.”

(2)Reasonableness requires that the compensation allowance be the same amount as would ordinarily be paid for comparable services by comparable institutions, and depends upon the facts and circumstances of each case.

(3)Necessary requires that the function be such that had the owner or immediate relative not rendered the services, the facility would have had to employ another person to perform the service, and be pertinent to the operation and sound conduct of the institution.

(4)The base maximum allowed compensation for an administrator who is involved in ownership of the facility or who is an immediate relative of an owner of the facility is $3,296 per month plus $35.16 per month per licensed bed capacity for each bed over 60, not to exceed $4,884 per month. An administrator is considered to be involved in ownership of a facility when the administrator has ownership interest of 5 percent or more.

On an annual basis, the maximum allowed compensation amounts for these administrators shall be increased or decreased by an annual inflation factor as specified by subrule 81.5(18).

(5)The maximum allowed compensation for an assistant administrator who is involved in ownership of the facility or who is an immediate relative of an owner of the facility in facilities having a licensed capacity of 151 or more beds is 60 percent of the amount allowed for the administrator. An assistant administrator is considered to be involved in ownership of a facility when the assistant administrator has ownership interest of 5 percent or more.

(6)The maximum allowed compensation for a director of nursing or any employee who is involved in ownership of the facility or who is an immediate relative of an owner of the facility is 60 percent of the amount allowed for the administrator. Persons involved in ownership or relatives providing professional services shall be limited to rates prevailing in the community not to exceed 60 percent of the allowable rate for the administrator on a semiannual basis. Records shall be maintained in the same manner for an employee involved in ownership or a relative as are maintained for any other employee of the facility. Ownership is defined as an interest of 5 percent or more.

(7)The maximum allowed compensation for anyone working for another entity (e.g., home office) that allocates cost to the nursing facility and is involved in ownership of the facility or allocating entity or who is an immediate relative of an owner of the facility or allocating entity is 60 percent of the amount allowed for the administrator. An employee working for another entity that allocates cost to the nursing facility is considered to be involved in ownership of a facility when that individual has ownership interest of 5 percent or more of the home office or the nursing facility.

(8)The maximum allowed compensation for employees as set forth in subparagraphs 81.5(11)“h”(4) through 81.5(11)“h”(7) shall be adjusted by the percentage of the average work week that the employee devoted to business activity at the nursing facility for the fiscal year of the financial and statistical report. The time devoted to the business shall be disclosed on the financial and statistical report and shall correspond to any amounts reported to the Medicare fiscal intermediary. In the case that an owner’s or immediate relative’s time is allocated to the facility from another entity (e.g., home office), the compensation limit shall be adjusted by the percentage of total costs of the entity allocated to the nursing facility. In no case shall the amount of salary for one employee allocated to multiple nursing facilities be more than the maximum allowed compensation for that employee had the salary been allocated to only one facility.

i.Management fees paid to a related party shall be limited on the same basis as the owner administrator’s salary, but shall have the amount paid the resident administrator deducted. When the parent company can separately identify accounting costs, the costs are allowed.

j.For financial and statistical reports received after March 18, 2020, the depreciation, as limited in this rule, may be included as an allowable patient cost.

(1)Limitation on calculation. Depreciation shall be calculated based on the tax cost using only the straight-line method of computation and recognizing the estimated useful life of the asset as defined in the most recent edition of the American Hospital Association’s Estimated Useful Lives of Depreciable Hospital Assets (2023 edition).

(2)Limitation—full depreciation. Once an asset is fully depreciated, no further depreciation shall be claimed on that asset.

(3)Change of ownership. Depreciation is further limited by the limitations in subrule 81.5(12).

k.Necessary and proper interest on both current and capital indebtedness is an allowable cost.

(1)Interest is the cost incurred for the use of borrowed funds. Interest on current indebtedness is the cost incurred for funds borrowed for a relatively short term. Interest on capital indebtedness is the cost incurred for funds borrowed for capital purposes.

(2)Necessary requires that the interest be incurred on a loan made to satisfy a financial need of the provider, be incurred on a loan made for a purpose reasonably related to patient care, and be reduced by investment income except where the income is from gifts and grants whether restricted or unrestricted, and that are held separate and not commingled with other funds.

(3)Proper requires that interest be incurred at a rate not in excess of what a prudent borrower would have had to pay in the money market on the date the loan was made, and be paid to a lender not related through control or ownership to the borrowing organization.

(4)Interest on loans is allowable as cost at a rate not in excess of the amount an investor could receive on funds invested in the locality on the date the loan was made.

(5)Interest is an allowable cost when the general fund of a provider borrows from a donor-restricted fund, a funded depreciation account of the provider, or the provider’s qualified pension fund, and pays interest to the fund, or when a provider operated by members of a religious order borrows from the order.

(6)When funded depreciation is used for purposes other than improvement, replacement or expansion of facilities or equipment related to patient care, allowable interest expense is reduced to adjust for offsets not made in prior years for earnings on funded depreciation. A similar treatment will be accorded deposits in the provider’s qualified pension fund where the deposits are used for other than the purpose for which the fund was established.

l.Costs applicable to supplies furnished by a related party or organization are a reimbursable cost when included at the cost to the related party or organization. The cost shall not exceed the price of comparable supplies that could be purchased elsewhere.

(1)Related means that the facility, to a significant extent, is associated with or has control of or is controlled by the organization furnishing the services, facilities, or supplies.

(2)Common ownership exists when an individual or individuals possess significant ownership or equity in the facility and the institution or organization serving the provider.

(3)Control exists where an individual or an organization has power, directly or indirectly, to significantly influence or direct the actions or policies of an organization or institution.

(4)When the facility demonstrates by convincing evidence that the supplying organization is a bona fide separate organization; that a substantial part of its business activity of the type carried on with the facility is transacted with others and there is an open competitive market for the type of services, facilities, or supplies furnished by the organization; that the services, facilities, or supplies are those that commonly are obtained by similar institutions from other organizations and are not a basic element of patient care ordinarily furnished directly to patients by the institutions; and that the charge to the facility is in line with the charge for the services, facilities, or supplies in the open market and no more than the charge made under comparable circumstances to others by the organization for the services, facilities, or supplies, the charges by the supplier shall be allowable costs.

m.For financial and statistical reports received after March 18, 2020, the following definitions, calculations, and limitations shall be used to determine allowable rent expense on a cost report.

(1)Landlord’s other expenses. Landlord’s other expenses are limited to amortization, mortgage interest, property taxes unless claimed as a lessee expense, utilities paid by the landlord unless claimed as a lessee expense, property insurance, and building maintenance and repairs.

(2)Reasonable rate of return. Reasonable rate of return means the historical cost of the facility in the hands of the owner when the facility first entered the Medicaid program multiplied by the 30-year Treasury bond rate as reported by the Federal Reserve Board at the date of lease inception.

(3)Nonrelated party leases. When the operator of a participating facility rents from a party that is not a related party, as defined in paragraph 81.5(11)“l,” the allowable cost report rental expense shall be the lesser of:

1.Lessor’s annual depreciation as identified in paragraph 81.5(11)“j” plus the landlord’s other expenses, plus a reasonable rate of return; or

2.Actual rent payments.

(4)Related party leases. When the operator of a participating facility rents from a related party, as defined in paragraph 81.5(11)“l,” the allowable cost report rental expense shall be the lesser of:

1.Lessor’s annual depreciation as identified in paragraph 81.5(11)“j” plus the landlord’s other expenses; or

2.Actual rent payments.

n.Reasonable legal, accounting, consulting and other professional fees, including association dues, are allowable costs if the fees are directly related to patient care. Legal, accounting, consulting and other professional fees, including association dues, described by the following are not considered to be patient-related and therefore are unallowable:

(1)Any fees or portion of fees used or designated for lobbying.

(2)Nonrefundable and unused retainers.

(3)Fees paid by the facility for the benefit of employees.

(4)Legal fees, expenses related to expert witnesses, accounting fees and other consulting fees incurred in an administrative or judicial proceeding. However, facilities may report the reasonable costs incurred in an administrative or judicial proceeding if all of the conditions below are met. Recognition of any costs will be in the fiscal period when a final determination in the administrative or judicial proceeding is made.

1.The costs have actually been incurred and paid,

2.The costs are reasonable expenditures for the services obtained,

3.The facility has made a good-faith effort to settle the disputed issue before the completion of the administrative or judicial proceeding, and

4.The facility prevails on the disputed issue.

o.The nursing facility quality assurance assessment paid pursuant to 441—Chapter 36 shall not be an allowable cost for cost reporting and audit purposes but shall be reimbursed pursuant to paragraph 81.5(21)“a.”

p.Prescription (legend) drug costs are excluded from services covered as part of the nursing facility per diem rate as set forth in paragraph 81.10(5)“d.” The department will provide direct payment for drugs covered pursuant to 441—subrule 78.1(2) to relieve the facility of payment responsibility. As Medicaid reimburses pharmacy providers only for the cost and dispensation of legend drugs included on the Medicaid preferred drug list, no drug costs will be recognized for other payor sources.

q.Inpatient therapy services provided by nursing facilities are included in the established rate as a direct care cost and subject to the normalization process and quarterly case-mix index adjustments.

(1)Under no circumstances shall therapies for Medicaid members residing in a nursing facility be billed to Medicaid through any provider other than the nursing facility. Therapy services for nursing facility residents that are reimbursed by other payment sources shall not be reimbursed by Medicaid.

(2)For purposes of determining allowable therapy costs, the department will adjust each provider’s reported cost of therapy services, including any employee benefits prorated based on total salaries and wages, to account for nonfacility patients including patients with costs paid by Medicare. Such adjustments will be applied to each cost report in order to remove reported costs attributable to outpatient therapy services reimbursed for non-inpatient services. When the costs of the services are not determinable, an adjustment shall be calculated based on an allocation of reported therapy revenues and shall be subject to field audit verification.

r.Penalties or fines imposed by federal, state or local agencies are not allowable expenses.

s.Penalties, fines or fees imposed for insufficient funds or delinquent payments are not allowable expenses.

t.Laboratory costs are excluded from services covered as part of the nursing facility per diem rate unless the service is provided by facility staff using facility equipment.

u.Diagnostic radiology costs are excluded from services covered as part of the nursing facility per diem rate unless the service is provided by facility staff using facility equipment.

81.5(12) Termination or change of owner.

a.A participating facility contemplating termination of participation or negotiating a change of ownership shall provide the department with at least 60 days’ prior notice. A transfer of ownership or operation terminates the participation agreement. A new owner or operator shall establish that the facility meets the conditions for participation and enter into a new agreement. The person responsible for transfer of ownership or for termination is responsible for submission of a final financial and statistical report through the date of the transfer. The new owner shall be responsible for all Medicaid debts incurred by the previous owner, including those incurred due to changes in rates, fines, penalties and quality assurance fees, from the first day of the quarter until the date the change occurs. No payment to the new owner will be made until formal notification is received. The following situations are defined as a transfer of ownership:

(1)In the case of a partnership that is a party to an agreement to participate in the medical assistance program, the removal, addition, or substitution of an individual for a partner in the association in the absence of an express statement to the contrary, dissolves the old partnership and creates a new partnership that is not a party to the previously executed agreement and a transfer of ownership has occurred.

(2)When a participating nursing facility is a sole proprietorship, a transfer of title and property to another party constitutes a change of ownership.

(3)When the facility is a corporation, neither a transfer of corporate stock nor a merger of one or more corporations with the participating corporation surviving is a transfer of ownership. A consolidation of two or more corporations resulting in the creation of a new corporate entity constitutes a change of ownership.

(4)When a participating facility is leased, a transfer of ownership is considered to have taken place. When the entire facility is leased, the total agreement with the lessor terminates. When only part of the facility is leased, the agreement remains in effect with respect to the unleased portion, but terminates with respect to the leased portion.

b.No increase in the value of property is allowed in determining the Medicaid rate for the new owner with any change of ownership (including lease agreements). When filing the first cost report, the new owner shall either continue the schedule of depreciation and interest established by the previous owner, or the new owner may choose to claim the actual rate of interest expense. The results of the actual rate of interest expense shall not be higher than would be allowed under the Medicare principles of reimbursement and shall be applied to the allowed depreciable value established by the previous owner, less any down payment made by the new owner.

c.Other acquisition costs of the new owner such as legal fees, accounting and administrative costs, travel costs and the costs of feasibility studies attributable to the negotiation or settlement of the sale or purchase of the property shall not be allowed.

d.In general, the provisions of Section 1861(v)(1)(0) of the Social Security Act (as amended to August 1, 2024) regarding payment allowed under Medicare principles of reimbursement at the time of a change of ownership shall be followed, except that no return on equity or recapture of depreciation provisions shall be employed.

e.A new owner or lessee wishing to claim a new rate of interest expense must submit documentation that verifies the amount of down payment made, the actual rate of interest, and the number of years required for repayment with the next annual cost report. In the absence of the necessary supportive documentation, interest and other property costs for all facilities that have changed or will change ownership shall continue at the rate allowed the previous owner.

81.5(13) Amended reports. The department, in its sole discretion, may reopen a review of a financial and statistical report at any time. No other entity or person has the right to request that the department or its contractor reopen a review of a financial and statistical report, or submit an amended financial and statistical report for review by the department, after the facility is notified of its per diem summary and adjustments following a review of a financial and statistical report. Nothing in this subrule relieves a facility of its obligation to immediately inform the department that the facility has retained Medicaid funds to which the facility is not entitled as a result of any cost report process. A facility shall notify the department when the facility determines that funds have been incorrectly paid or when an overpayment has been detected.

81.5(14) Payment to new facility. The payment to a new facility will be the sum of the patient-day-weighted median cost for the direct care and non-direct care components pursuant to paragraph 81.5(16)“c.” After the first full calendar quarter of operation, the patient-day-weighted median cost for the direct care component will be adjusted by the facility’s average Medicaid case-mix index pursuant to subrule 81.5(19). A financial and statistical report shall be submitted from the beginning day of operation to the end of the fiscal year. Following the completion of the new facility’s first fiscal year, rates will be established in accordance with subrule 81.5(16). Subsequent financial and statistical reports shall be submitted annually for a 12-month period ending with the facility’s fiscal year.

81.5(15) Payment to new owner. An existing facility with a new owner will continue to be reimbursed using the previous owner’s per diem rate adjusted quarterly for changes in the Medicaid average case-mix index. The facility shall submit a financial and statistical report for the period from beginning of actual operation under new ownership to the end of the facility’s fiscal year. Subsequent financial and statistical reports shall be submitted annually for a 12-month period ending with the facility’s fiscal year. The facility shall notify the department of the date the facility’s fiscal year will end.

81.5(16) Establishment of the direct care and non-direct care patient-day-weighted medians and modified price-based reimbursement rate. This subrule provides for the establishment of the modified price-based reimbursement rate.

a.Calculation of per diem cost. For purposes of calculating the non-state government owned nursing facility Medicaid reimbursement rate and the Medicare-certified hospital-based nursing facility Medicaid reimbursement rate, the costs will be divided into two components, the direct care component and non-direct care component as defined in rule 441—81.1(249A). Each nursing facility’s per diem allowable direct care and non-direct care cost shall be established. Effective July 1, 2001, and every second year thereafter, the per diem allowable cost will be determined by dividing total reported allowable costs by total inpatient days during the reporting period. On July 1, 2001; July 1, 2003; July 1, 2004; July 1, 2005; and every second year thereafter, total reported allowable costs will be adjusted using the inflation factor specified in subrule 81.5(18) from the midpoint of the cost report period to the beginning of the state fiscal year rate period.

(1)Non-state government owned nursing facilities. Effective December 1, 2009, patient days for purposes of the computation of administrative, environmental, and property expenses for non-state government owned nursing facilities will be inpatient days as determined in subrule 81.5(7) or 85 percent of the licensed capacity of the facility, whichever is greater. For the reimbursement period beginning July 1, 2023, and ending June 30, 2025, patient days for purposes of the computation of administrative, environmental, and property expenses for non-state government owned nursing facilities will be inpatient days as determined in subrule 81.5(7)) or 70 percent of the licensed capacity of the facility, whichever is greater. Patient days for purposes of the computation of all other expenses will be inpatient days as determined in subrule 81.5(7).

(2)Medicare-certified hospital-based nursing facilities. Patient days for purposes of the computation of all expenses shall be inpatient days as determined by subrule 81.5(7).

b.Cost normalization. The per diem allowable direct care costs are normalized by dividing a facility’s per diem direct care costs by the facility’s cost report period case-mix index as defined in rule 441—81.1(249A) and subrule 81.5(19).

c.Calculation of patient-day-weighted medians. For each of the rate components, a patient-day-weighted median will be established for both the non-state government owned nursing facilities and the Medicare-certified hospital-based nursing facilities, hereinafter referred to as the non-state government owned nursing facility patient-day-weighted medians and the Medicare-certified hospital-based nursing facility patient-day-weighted medians.

The per diem normalized direct care cost for each facility is arrayed from low to high to determine the direct care component patient-day-weighted median cost based on the number of patient days provided by facilities. The per diem non-direct care cost for each facility is also arrayed from low to high to determine the non-direct care component patient-day-weighted median cost based on the number of patient days provided by facilities. An array and patient-day-weighted median for each cost component is determined separately for both non-state government owned nursing facilities and the Medicare-certified hospital-based nursing facilities.

(1)For the fiscal period beginning July 1, 2001, and ending June 30, 2003, the non-state government owned nursing facility direct care and non-direct care patient-day-weighted medians and the Medicare-certified hospital-based nursing facility direct care and non-direct care patient-day-weighted medians will be calculated using the latest financial and statistical report with a fiscal year end of December 31, 2000, or earlier, inflated from the midpoint of the cost report period to July 1, 2001, using the inflation factor specified in subrule 81.5(18).

(2)Effective July 1, 2003, and each second year thereafter, the patient-day-weighted medians used in rate setting will be recalculated. The non-state government owned nursing facility direct care and non-direct care patient-day-weighted medians and the Medicare-certified hospital-based nursing facility direct care and non-direct care patient-day-weighted medians will be calculated using the latest completed cost report with a fiscal year end of the preceding December 31 or earlier. When patient-day-weighted medians are recalculated, inflation is applied from the midpoint of the cost report period to the first day of the state fiscal year rate period using the inflation factor specified in subrule 81.5(18).

(3)For the fiscal period beginning July 1, 2004, and ending June 30, 2005, the non-state-owned and Medicare-certified hospital-based nursing facility direct care and the non-direct care patient-day-weighted medians calculated July 1, 2003, will be inflated to July 1, 2004, using the inflation factor specified in subrule 81.5(18).

d.Excess payment allowance.

(1)For non-state government owned nursing facilities not located in a Metropolitan Statistical Area as defined by CMS, not including Medicare-certified hospital-based nursing facilities, the excess payment allowance is calculated as follows:

1.For the direct care component, subject to the limit provided below, the excess payment allowance is equal to the percentage specified in 441—subrule 79.1(2) times the difference (if greater than zero) of the following: the direct care non-state government owned nursing facility patient-day-weighted median times the percentage specified in 441—subrule 79.1(2) times the Medicaid average case-mix index pursuant to subrule 81.5(19), minus a provider’s allowable normalized per patient day direct care costs pursuant to 81.5(16)“b” times the Medicaid average case-mix index pursuant to subrule 81.5(19). In no case will the excess payment allowance exceed the percentage specified in 441—subrule 79.1(2) times the direct care non-state government owned nursing facility patient-day-weighted median.

2.For the non-direct care component, subject to the limit provided below, the excess payment allowance is equal to the percentage specified in 441—subrule 79.1(2) times the difference (if greater than zero) of the following: the non-direct care non-state government owned nursing facility patient-day-weighted median times the percentage specified in 441—subrule 79.1(2), minus a provider’s allowable per patient day non-direct care cost pursuant to paragraph 81.5(16)“a.” In no case will the excess payment allowance exceed the percentage specified in 441—subrule 79.1(2) times the non-direct care non-state government owned nursing facility patient-day-weighted median.

(2)For non-state government owned nursing facilities located in a Metropolitan Statistical Area as defined by CMS (not including Medicare-certified hospital-based nursing facilities), the excess payment allowance is calculated as follows:

1.For the direct care component, subject to the limit provided below, the excess payment allowance is equal to the percentage specified in 441—subrule 79.1(2) times the difference (if greater than zero) of the following: the direct care non-state government owned nursing facility patient-day-weighted median times the percentage specified in 441—subrule 79.1(2) times the wage index factor specified below times the Medicaid average case-mix index pursuant to subrule 81.5(19), minus a provider’s allowable normalized per patient day direct care costs pursuant to paragraph 81.5(16)“b” times the Medicaid average case-mix index pursuant to subrule 81.5(19). In no case will the excess payment allowance exceed the percentage specified in 441—subrule 79.1(2) times the direct care non-state government owned nursing facility patient-day-weighted median.

The wage index factor will be determined annually by calculating the average difference between the Iowa hospital-based rural wage index and all Iowa hospital-based Metropolitan Statistical Area wage indices as published by CMS each July. The geographic wage index adjustment will not exceed $8 per patient day.

A nursing facility may request an exception to application of the geographic wage index based upon a reasonable demonstration of wages, locations, and total cost. The nursing facility shall request the exception within 30 days of receipt of notification to the nursing facility of the new reimbursement rate using the department’s procedures for requesting exceptions at rule 441—1.8(17A,217).

2.For the non-direct care component, subject to the limit provided below, the excess payment allowance is equal to the percentage specified in 441—subrule 79.1(2) times the difference (if greater than zero) of the following: the non-direct care non-state government owned nursing facility patient-day-weighted median times the percentage specified in 441—subrule 79.1(2), minus a provider’s allowable per patient day non-direct care cost pursuant to paragraph 81.5(16)“a.” In no case will the excess payment allowance exceed the percentage specified in 441—subrule 79.1(2) times the non-direct care non-state government owned nursing facility patient-day-weighted median.

(3)For Medicare-certified hospital-based nursing facilities, the excess payment allowance is calculated as follows:

1.For the direct care component, subject to the limit provided below, the excess payment allowance is equal to the percentage specified in 441—subrule 79.1(2) times the difference (if greater than zero) of the following: the direct care Medicare-certified hospital-based nursing facility patient-day-weighted median times the percentage specified in 441—subrule 79.1(2) times the Medicaid average case-mix index pursuant to subrule 81.5(19), minus a provider’s normalized allowable per patient day direct care costs pursuant to paragraph 81.5(16)“b” times the Medicaid average case-mix index pursuant to subrule 81.5(19). In no case will the excess payment allowance exceed the percentage specified in 441—subrule 79.1(2) times the direct care Medicare-certified hospital-based nursing facility patient-day-weighted median.

2.For the non-direct care component, subject to the limit provided below, the excess payment allowance is equal to the percentage specified in 441—subrule 79.1(2) times the difference (if greater than zero) of the following: the non-direct care Medicare-certified hospital-based nursing facility patient-day-weighted median times the percentage specified in 441—subrule 79.1(2), minus a provider’s allowable per patient day non-direct care cost pursuant to paragraph 81.5(16)“a.” In no case will the excess payment allowance exceed the percentage specified in 441—subrule 79.1(2) times the non-direct care Medicare-certified hospital-based nursing facility patient-day-weighted median.

e.Reimbursement rate. The Medicaid reimbursement rate is based on allowable costs, updated July 1, 2001, and every second year thereafter, as specified in subparagraphs (1) and (2) below, plus a potential excess payment allowance determined by the methodology in paragraph “d,” not to exceed the rate component limits determined by the methodology in paragraph “f.”

(1)For non-state government owned nursing facilities and Medicare-certified hospital-based nursing facilities, direct care and non-direct care rate components are calculated as follows:

1.The direct care component is equal to the provider’s normalized allowable per patient day costs times the Medicaid average case-mix index pursuant to subrule 81.5(19), plus the allowed excess payment allowance as determined by the methodology in paragraph “d.”

2.The non-direct care component is equal to the provider’s allowable per patient day costs, plus the allowed excess payment allowance as determined by the methodology in paragraph “d” and the allowable capital cost per diem instant relief add-on as determined by the methodology in paragraph “h.”

(2)The reimbursement rate for state-operated nursing facilities and special population nursing facilities will be the facility’s average allowable per diem costs, adjusted for inflation pursuant to subrule 81.5(18), based on the most current financial and statistical report.

f.Notwithstanding paragraphs “d” and “e,” in no instance will a rate component exceed the rate component limit defined as follows:

(1)For non-state government owned nursing facilities not located in a Metropolitan Statistical Area (not including Medicare-certified hospital-based nursing facilities), the direct care and non-direct care rate component limits are calculated as follows:

1.The direct care rate component limit is the direct care non-state government owned nursing facility patient-day-weighted median times the percentage of the median specified in 441—subrule 79.1(2) times the Medicaid average case-mix index pursuant to subrule 81.5(19).

2.The non-direct care rate component limit is the non-direct care non-state government owned nursing facility patient-day-weighted median multiplied by the percentage of the median specified in 441—subrule 79.1(2) or is 120 percent of the median if the facility qualifies for the enhanced non-direct care rate component limit pursuant to paragraph “h.”

(2)For non-state government owned nursing facilities located in a Metropolitan Statistical Area (not including Medicare-certified hospital-based nursing facilities), the direct care and non-direct care rate component limits are calculated as follows:

1.The direct care rate component limit is the direct care non-state government owned nursing facility patient-day-weighted median times the percentage of the median specified in 441—subrule 79.1(2) times the wage factor specified in paragraph “d” times the Medicaid average case-mix index pursuant to subrule 81.5(19).

2.The non-direct care rate component limit is the non-direct care non-state government owned nursing facility patient-day-weighted median multiplied by the percentage of the median specified in 441—subrule 79.1(2) or is 120 percent of the median if the facility qualifies for the enhanced non-direct care rate component limit pursuant to paragraph “h.”

(3)For Medicare-certified hospital-based nursing facilities, the direct care and non-direct care rate component limits are calculated as follows:

1.The direct care rate component limit is the direct care Medicare-certified hospital-based nursing facility patient-day-weighted median times the percentage of the median specified in 441—subrule 79.1(2) times the Medicaid average case-mix index pursuant to subrule 81.5(19).

2.The non-direct care rate component limit is the non-direct care Medicare-certified hospital-based nursing facility patient-day-weighted median multiplied by the percentage of the median specified in 441—subrule 79.1(2) or is 120 percent of the median if the facility qualifies for the enhanced non-direct care rate component limit pursuant to paragraph “h.”

(4)For special population nursing facilities enrolled on or after June 1, 1993, the upper limit on their rate is equal to the sum of the following:

1.The direct care Medicare-certified hospital-based nursing facility patient-day-weighted median times the percentage of the median specified in 441—subrule 79.1(2).

2.The non-direct care Medicare-certified hospital-based nursing facility patient-day-weighted median multiplied by the percentage of the median specified in 441—subrule 79.1(2) or 120 percent of the median if the facility qualifies for the enhanced non-direct care rate component limit pursuant to paragraph “h.”

g.Pay-for-performance program. Additional reimbursement based on the nursing facility pay-for-performance program is available for non-state government owned nursing facilities as provided in this paragraph in state fiscal years for which funding is appropriated by the legislature. The pay-for-performance program provides additional reimbursement based upon a nursing facility’s achievement of multiple favorable outcomes as determined by established benchmarks. The reimbursement is issued as an add-on payment after the end of any state fiscal year (which is referred to in this paragraph as the “payment period”) for which there is funding appropriated by the legislature.

(1)Scope. Additional reimbursement for the nursing facility pay-for-performance program is not available to Medicare-certified hospital-based nursing facilities, state-operated nursing facilities, or special population nursing facilities. Therefore, data from these facility types will not be used when determining eligibility for or the amount of additional reimbursement based on the nursing facility pay-for-performance program.

(2)Benchmarks. The pay-for-performance benchmarks include characteristics in four domains: quality of life, quality of care, access, and efficiency. These characteristics are objective and measurable and when considered in combination with each other are deemed to have a correlation to a resident’s quality of life and care. While any single measure does not ensure the delivery of quality care, a nursing facility’s achievement of multiple measures suggests that quality is an essential element in the facility’s delivery of resident care.

(3)Definition of direct care. For the purposes of the nursing facility pay-for-performance program, “direct care staff” is defined to include registered nurses (RNs), licensed practical nurses (LPNs), certified nurse assistants (CNAs), rehabilitation nursing, and other contracted nursing services. “Direct care staff” does not include the director of nursing (DON) or minimum data set (MDS) coordinator.

(4)Qualifying for additional reimbursement. The department will annually award points based on the measures achieved in each of the four domains, as described in subparagraphs (5) through (8). The maximum available points are 100. To qualify for additional Medicaid reimbursement under the nursing facility pay-for-performance program, a facility must achieve a minimum score of 51 points. The relationship of the score achieved to additional payments is described in subparagraph (10). Payments are subject to reduction or forfeiture as described in subparagraphs (12) and (13).

(5)Domain 1: Quality of life.

Standard

Measurement Period

Value

Source

Subcategory: Person-Directed Care

Enhanced Dining A:

The facility makes available menu options and alternative selections for all meals.

Payment period

1 point

Self-certification

Enhanced Dining B:

The facility provides residents with access to food and beverages 24 hours per day and 7 days per week and empowers staff to honor resident choices.

Payment period

1 point

Self-certification

Enhanced Dining C:

The facility offers at least one meal per day for an extended period to give residents the choice of what time to eat.

Payment period

2 points

Self-certification

Resident Activities A:

The facility employs a certified activity coordinator for at least 38 minutes per week per licensed bed.

Payment period

1 point

Self-certification

Resident Activities B:

The facility either has activity staff that exceed the required minimum set by law or has direct care staff who are trained to plan and conduct activities and carry out both planned and spontaneous activities on a daily basis.

Payment period

1 point

Self-certification

Resident Activities C:

The facility’s residents report that activities meet their social, emotional and spiritual needs.

July through March of payment period

2 points

Self-certification

Resident Choice A:

The facility allows residents to set their own schedules, including what time to get up and what time to go to bed.

Payment period

1 point

Self-certification

Resident Choice B:

The facility allows residents to have a choice of whether to take a bath or shower and on which days and at what time the bath or shower will be taken.

Payment period

1 point

Self-certification

Consistent Staffing:

The facility has all direct care staff members caring for the same residents at least 70% of their shifts.

Payment period

3 points

Self-certification

National Accreditation:

The facility has CARF or another nationally recognized accreditation for the provision of person-directed care.

Payment period

13 points
NOTE: A facility that receives points for this measure does not receive points for any other measures in this subcategory.

Self-certification

Subcategory: Resident Satisfaction

Resident/Family Satisfaction Survey:

The facility administers an anonymous resident/family satisfaction survey annually. The survey tool must be developed, recognized, and standardized by an entity external to the facility. Results must be tabulated by an entity external to the facility.

To qualify for the measure, the facility must have a response rate of at least 35%. A summary report of the aggregate results and point scale must be made publicly available and be posted prominently along with the facility’s state survey results until the next satisfaction survey is completed.

Survey completed between October 1 and March 31 of the payment period

5 points

Nursing Facility Opinion Survey Transmittal, submitted by independent entity that compiled results

Long-Term Care Ombudsman:

The facility has resolved 70% or more of complaints received and investigated by the local or state ombudsman.

Calendar year ending December 31 of the payment period

5 points if resolution 70% to 74%

7 points if resolution 75% or greater

LTC ombudsman’s list of facilities meeting the standard

(6)Domain 2: Quality of care.

Standard

Measurement Period

Value

Source

Subcategory: Survey

Deficiency-Free Survey:

The facility is deficiency-free on the latest annual state and federal licensing and certification survey and any subsequent surveys, complaint investigations, or revisit investigations.

If a facility’s only scope and severity deficiencies are an A level pursuant to 42 CFR Part 483, Subparts B and C, as amended to August 1, 2024, the facility is deemed to have a deficiency-free survey for purposes of this measure. Surveys are considered complete when all appeal rights have been exhausted.

Calendar year ending December 31 of the payment period, including any subsequent surveys, revisit, or complaint investigations

10 points

DIAL list of facilities meeting the standard

Regulatory Compliance with Survey:

No on-site revisit to the facility is required for recertification surveys or for any substantiated complaint investigations during the measurement period.

Calendar year ending December 31 of the payment period, including any subsequent surveys, revisits, or complaint investigations

5 points. A facility that receives points for a deficiency-free survey does not receive points for this measure.

DIAL list of facilities meeting the standard

Subcategory: Staffing

Nursing Hours Provided:

The facility’s per-resident-day nursing hours are at or above one-half standard deviation above the mean of per-resident-day nursing hours for all facilities.

Nursing hours include those of RNs, LPNs, CNAs, rehabilitation nurses, and other contracted nursing services. Nursing hours will be normalized to remove variations in staff hours associated with different levels of resident case mix.

Facility fiscal year ending on or before December 31 of the payment period

5 points if case-mix adjusted nursing hours are above mean plus one-half standard deviation

10 points if case-mix adjusted nursing hours are greater than mean plus one standard deviation

Financial and Statistical Report, as analyzed by the department. The facility cost report period case-mix index shall be used to normalize nursing hours.

Employee Turnover:

The facility has overall employee turnover of 50% or less and CNA turnover of 55% or less.

Facility fiscal year ending on or before December 31 of the payment period

5 points if overall turnover is between 40% and 50% and CNA turnover is between 45% and 55%

10 points if overall turnover is less than or equal to 40% and CNA turnover is less than or equal to 45%

Financial and Statistical Report, as analyzed by the department

Staff Education, Training and Development:

The facility provides staff education, training, and development at 25% above the basic requirements for each position that requires continuing education. The number of hours for these programs must apply to at least 75% of all staff of the facility, based upon administrator or officer certification.

Calendar year ending December 31 of the payment period

5 points

Self-certification

Staff Satisfaction Survey:

The facility annually administers an anonymous staff satisfaction survey. The survey tool must be developed, recognized, and standardized by an entity external to the facility and must identify worker job classification. Results must be tabulated by an entity external to the facility.

To qualify for this measure, the facility must have a response rate of at least 35%. A summary report of the aggregate results and point scale must be made publicly available and be posted prominently along with the facility’s state survey results until the next satisfaction survey is completed.

Survey completed between October 1 and March 31 of the payment period

5 points

Nursing Facility Opinion Survey Transmittal, submitted by independent entity that compiled results

Subcategory: Nationally Reported Quality Measures

High-Risk Pressure Ulcer:

The facility has occurrences of high-risk pressure ulcers at rates one-half standard deviation or more below the mean percentage of occurrences for all facilities, based on MDS data as applied to the nationally reported quality measures.

12-month period ending September 30 of the payment period

3 points if one-half to one standard deviation below the mean percentage of occurrences

5 points if one standard deviation or more below the mean percentage of occurrences

Department report based on MDS data as reported by CMS

Physical Restraints:

The facility has a physical restraint rate of 0% based on MDS data as applied to the nationally reported quality measures.

12-month period ending September 30 of the payment period

5 points

Department report based on MDS data as reported by CMS

Chronic Care Pain:

The facility has occurrences of chronic care pain at rates one-half standard deviation or more below the mean rate of occurrences for all facilities based on MDS data as applied to the nationally reported quality measures.

12-month period ending September 30 of the payment period

3 points if one-half to one standard deviation below the mean rate of occurrences

5 points if one standard deviation or more below the mean rate of occurrences

Department report based on MDS data as reported by CMS

High Achievement of Nationally Reported Quality Measures:

The facility received at least 9 points from a combination of the measures listed in this subcategory.

12-month period ending September 30 of the payment period

2 points if the facility receives 9 to 12 points in the subcategory of nationally reported quality measures

4 points if the facility receives 13 to 15 points in this subcategory

Department report based on MDS data as reported by CMS

(7)Domain 3: Access.

Standard

Measurement Period

Value

Source

Special Licensure Classification:

The facility has a unit licensed for the care of residents with chronic confusion or a dementing illness (CCDI unit).

Status on December 31 of the payment period

4 points

DIAL list of facilities meeting the standard

High Medicaid Utilization:

The facility has Medicaid utilization at or above the statewide median plus 10%. Medicaid utilization is determined by dividing total nursing facility Medicaid days by total nursing facility patient days.

Facility fiscal year ending on or before December 31 of the payment period

3 points if Medicaid utilization is more than the median plus 10%

4 points if Medicaid utilization is more than the median plus 20%

Financial and Statistical Report, as analyzed by the department

(8)Domain 4: Efficiency.

Standard

Measurement Period

Value

Source

High Occupancy Rate:

The facility has an occupancy rate at or above 95%. “Occupancy rate” is defined as the percentage derived when dividing total patient days based on census logs by total bed days available based on the number of authorized licensed beds within the facility.

Facility fiscal year ending on or before December 31 of the payment period

4 points

Financial and Statistical Report, as analyzed by the department

Low Administrative Costs:

The facility’s percentage of administrative costs to total allowable costs is one-half standard deviation or more below the mean percentage of administrative costs for all Iowa facilities.

Facility fiscal year ending on or before December 31 of the payment period

3 points if administrative costs percentage is less than the mean less one-half standard deviation

4 points if administrative costs percentage is less than the mean less one standard deviation

Financial and Statistical Report, as analyzed by the department

(9)Source of measurements. Source reports are due to the department by May 1 of each year. For those measures whose source is self-certification, the data will be drawn from a report submitted by the facility to the department. The independent party that collects and compiles the results of the resident/family survey shall communicate the results to the department on the Nursing Facility Opinion Survey Transmittal. The department will request required source reports from the long-term care ombudsman and the department of inspections, appeals, and licensing.

(10)Calculation of potential add-on payment. The number of points awarded will be determined annually, for each state fiscal year for which funding is appropriated by the legislature. A determination is made on whether a facility qualifies for an add-on payment at the end of the payment period. Based upon the number of points awarded, a retroactive add-on payment is made effective beginning the first day of the payment period as follows, contingent upon legislative funding for the state fiscal year, and subject to subparagraph (11):

Score

Amount of Add-on Payment

0-50 points

No additional reimbursement

51-60 points

1 percent of the direct care plus nondirect care cost component patient-day-weighted medians, subject to reduction as provided in subparagraph (13)

61-70 points

2 percent of the direct care plus nondirect care cost component patient-day-weighted medians, subject to reduction as provided in subparagraph (13)

71-80 points

3 percent of the direct care plus nondirect care cost component patient-day-weighted medians, subject to reduction as provided in subparagraph (13)

81-90 points

4 percent of the direct care plus nondirect care cost component patient-day-weighted medians, subject to reduction as provided in subparagraph (13)

91-100 points

5 percent of the direct care plus nondirect care cost component patient-day-weighted medians, subject to reduction as provided in subparagraph (13)

(11)Monitoring for reduction or forfeiture of reimbursement. The department will request the department of inspections, appeals, and licensing to furnish by September 1, December 1, March 1, and August 1 of each year a list of nursing facilities subject to a reduction or forfeiture of the additional reimbursement pursuant to the criteria in subparagraph (12) or (13).

(12)Forfeiture of additional reimbursement. A nursing facility shall not be eligible for any additional reimbursement under this program if during the payment period the nursing facility is cited for a deficiency resulting in actual harm or immediate jeopardy pursuant to the federal certification guidelines at a scope and severity level of H or higher, regardless of the amount of fines assessed.

(13)Reduction of additional reimbursement. The additional reimbursement for the nursing facility pay-for-performance program calculated according to subparagraph (10) shall be subject to reduction based on survey compliance as follows:

1.The add-on payment shall be suspended for any month in which the nursing facility has received denial of payment for new admission status that was enforced by CMS.

2.A facility’s add-on payment shall be reduced by 25 percent for each citation received during the year for a deficiency resulting in actual harm at a scope and severity level of G pursuant to the federal certification guidelines.

3.If the facility fails to cure a cited level G deficiency within the time allowed by the department of inspections, appeals, and licensing, the add-on payment shall be forfeited, and the facility shall not receive any nursing facility pay-for-performance program payment for the payment period.

(14)Application of additional payments. The additional reimbursement for the nursing facility pay-for-performance program will be paid to qualifying facilities at the end of the state fiscal year. At the end of each state fiscal year, the department will:

1.Retroactively adjust each qualifying facility’s quarterly rates from the first day of the state fiscal year to include the amount of additional reimbursement for the nursing facility pay-for-performance program calculated according to paragraph 81.5(16)“g”; and

2.Reprice all facility claims with dates of service during the period in which an additional reimbursement for the nursing facility pay-for-performance program is effective to reflect the adjusted reimbursement rate.

(15)Use of additional payments. As a condition of eligibility for such payments, any additional payments received by a nursing facility for the pay-for-performance program must be:

1.Used to support direct care staff through increased wages, enhanced benefits, and expanded training opportunities; and

2.Used in a manner that improves and enhances quality of care for residents.

(16)Monitoring facility compliance on the use of payments. Each nursing facility shall complete the Nursing Facility Medicaid Enhanced Payment Report to report the use of any additional payments received for the nursing facility pay-for-performance program. The report is due to the department each year by May 1. Failure to submit the report by the due date shall result in disqualification for add-on payment for the next pay-for-performance payment period.

(17)Reporting results of the program. The department will publish the results of the nursing facility pay-for-performance program annually.

h.Capital cost per diem instant relief add-on and enhanced non-direct care rate component limit. Contingent upon approval from the CMS and to the extent that funding is appropriated by the Iowa general assembly, additional reimbursement is available for nursing facilities that have completed a complete replacement, new construction, or major renovations. Additional reimbursement under this paragraph is available for services rendered beginning on October 1, 2007, or beginning on the effective date of CMS approval if CMS approval is effective on a later date.

(1)Types of additional reimbursement. Two types of additional reimbursement are available:

1.The capital cost per diem instant relief add-on is an amount per patient day to be added to the non-direct care component of the reimbursement rate and is subject to the non-direct care rate component limit as determined in paragraph “f.”

2.The enhanced non-direct care rate component limit provides an increase in the percentage of the median that is applied when calculating the non-direct care rate component limit as defined in paragraph “f.” The percentage of the median is increased to 120 percent when the enhanced non-direct care rate component limit is granted.

(2)Eligible projects. To qualify for either the capital cost per diem instant relief add-on or the enhanced non-direct care rate component limit, a facility must have undertaken a complete replacement, new construction, or major renovations for the purpose of:

1.Rectification of a violation of Life Safety Code requirements; or

2.Development of home- and community-based waiver program services; or

3.Improving infection control by replacing or enhancing an HVAC system, as defined in Iowa Code section 105.2.

(3)Additional requirements for all requests. To qualify for additional reimbursement, a facility with an eligible project must also meet the following requirements:

1.The facility has Medicaid utilization at or above 40 percent. Medicaid patient day utilization for this purpose is calculated as total nursing facility Medicaid patient days divided by total patient days as reported on the facility’s most current financial and statistical report. Medicaid hospice patient days will be counted toward the total nursing facility Medicaid patient days.

2.The facility meets the accountability measure criteria set forth in paragraph “g,” subparagraph (1), deficiency-free survey, or subparagraph (2), regulatory compliance with survey, based on the most current information available when the request for additional reimbursement is submitted.

3.The facility has documented active participation in a quality of care program.

4.The facility has documented plans to facilitate person-directed care, dementia units, or specialty post-acute services.

(4)Additional requirements for waiver services. To qualify for additional reimbursement for the development of home- and community-based waiver services, the facility shall also meet the following requirements:

1.Services shall be provided in an underserved area, which may include a rural area.

2.Services shall be provided on the direct site of the facility but not as a nursing facility service.

3.Services shall meet all federal and state requirements for Medicaid reimbursement.

4.Services shall include one or more of the following: adult day care as defined by 441—subrule 78.37(1), consumer-directed attendant care as defined by 441—subrule 78.37(15) provided in an assisted living setting, day habilitation as defined by 441—subrule 78.41(14), home-delivered meals as defined by 441—subrule 78.37(8), emergency response system as defined by 441—subrule 78.37(2), and respite care as defined by 441—subrule 78.37(6).

(5)Submission of request. A facility shall submit a written request for the capital cost per diem instant relief add-on, the enhanced non-direct care rate component limit, or a preliminary evaluation of whether a project may qualify for additional reimbursement to the department. A qualifying facility may request one or both types of additional reimbursement.

1.A request for the capital cost per diem instant relief add-on may be submitted no earlier than 30 days before the complete replacement, new construction, or major renovations are placed in service.

2.A request for the enhanced non-direct care rate component limit may be submitted with a request for a capital cost per diem instant relief add-on or within 60 days after the release of a rate determination letter reflecting a change in the non-direct care rate component limit.

3.A request for a preliminary evaluation may be submitted when a facility is preparing a feasibility projection for a construction or renovation project. A preliminary evaluation does not guarantee approval of the capital cost per diem instant relief add-on or enhanced non-direct care rate component limit upon submission of a formal request.

(6)Content of request for add-on. A facility’s request for the capital cost per diem instant relief add-on shall include:

1.A description of the project for which the add-on is requested, including a list of goals for the project and a time line of the project that spans the life of the project.

2.Documentation that the facility meets the qualifications in subparagraphs (2) and (3) and, if applicable, in subparagraph (4).

3.The period during which the add-on is requested (no more than two years).

4.Whether the facility is also requesting the enhanced non-direct care rate component limit. (See subparagraph (7) for requirements.)

5.A copy of the facility’s most current depreciation schedule that clearly identifies the cost of the project for which the add-on is requested if assets placed in service by that project are included on the schedule. Any removal of assets shall be clearly identifiable either on the depreciation schedule or on a separate detailed schedule, and that schedule shall include the amount of depreciation expense for removed assets that is included in the current reimbursement rate.

6.If the cost of the project is not reported on the submitted depreciation schedule, a detailed schedule of the assets to be placed in service by the project, including:

●The estimated date the assets will be placed into service;

●The total estimated depreciable value of the assets;

●The estimated useful life of the assets based upon existing Medicaid and Medicare provisions; and

●The estimated annual depreciation expense of the assets using the straight-line method in accordance with generally accepted accounting principles.

7.The facility’s estimated annual licensed bed capacity and estimated annual total patient days. If this information is not provided, estimated annual total patient days will be determined using the most current submitted financial and statistical report.

8.If interest expense has been or will be incurred and is related to the project for which the add-on is requested, a copy of the general terms of the debt service and the estimated annual amount of interest expense shall be submitted.

9.If any debt service has been retired, a copy of the general terms of the debt service and the amount of interest expense for debt service retired that is included in the current reimbursement rate.

(7)Content of request for enhanced limit. A facility’s request for the enhanced non-direct care rate component limit shall include:

1.A description of the project for which the enhanced non-direct care rate component limit is requested, including a list of goals for the project and a time line of the project that spans the life of the project.

2.Documentation that the facility meets the qualifications in subparagraphs (2) and (3) and, if applicable, in subparagraph (4).

3.Identification of any period in which the capital cost per diem instant relief add-on was previously granted and the number of times the capital cost per diem instant relief add-on and the enhanced non-direct care rate component limit have previously been granted.

(8)Content of request for preliminary evaluation. A facility’s request for a preliminary evaluation of a proposed project shall include:

1.The estimated completion date of the project.

2.The estimated date when a formal request for an add-on or enhanced limit will be submitted.

3.For a preliminary evaluation for a capital cost per diem instant relief add-on, all information required in subparagraph (6).

4.For a preliminary evaluation for the enhanced non-direct care rate component limit, all information required in subparagraph (7).

(9)Calculation of capital cost per diem instant relief add-on. The capital cost per diem instant relief add-on is calculated by dividing the annual estimated property costs for the complete replacement, new construction, or major renovation project for which the add-on is granted by the facility’s estimated annual total patient days.

1.Effective December 1, 2009, total patient days will be determined using the most current submitted financial and statistical report or using the estimated total patient days as reported in the request for the add-on. For purposes of calculating the add-on, total patient days will be the greater of the estimated annual total patient days or 85 percent of the facility’s estimated licensed capacity. For the period beginning July 1, 2023, and ending June 30, 2025, patient days for purposes of the computation of administrative, environmental, and property expenses for non-state government-owned facilities will be inpatient days or the minimum occupancy of 70 percent of the licensed capacity of the facility, whichever is greater.

2.The annual estimated property costs for the project are calculated as the estimated annual depreciation expense for the cost of the project, plus estimated annual interest expense for the cost of the project, less the amount of depreciation expense for assets removed that is included in the current reimbursement rate and the amount of interest expense for debt service retired that is included in the current reimbursement rate.

3.Estimated amounts and actual amounts will be reconciled as described in subparagraph (12).

(10)Effective date of capital cost per diem instant relief add-on. Subject to available funding and previously approved requests for capital cost per diem instant relief add-ons and enhanced non-direct care rate component limits, a capital cost per diem instant relief add-on will be effective the first day of the calendar quarter following the placement in service of the assets associated with the add-on and receipt of all required information. The capital cost per diem instant relief add-on will be added to the non-direct care component of the reimbursement rate, not to exceed the non-direct care rate component limit as determined in paragraph “f.”

(11)Term of capital cost per diem instant relief add-on. The period for which a facility may be granted the capital cost per diem instant relief add-on shall not exceed two years. The capital cost per diem instant relief add-on shall terminate at the time of the subsequent biennial rebasing. If the facility’s submitted annual financial and statistical report used in the subsequent biennial rebasing does not include 12 months of property costs for the assets with which the capital cost per diem instant relief add-on is associated, including interest expense, if applicable, the facility may submit a new request for the capital cost per diem instant relief add-on.

(12)Reconciliation of capital cost per diem instant relief add-on. During the period in which the capital cost per diem instant relief add-on is granted, the department will recalculate the amount of the add-on based on actual allowable costs and patient days reported on the facility’s submitted annual financial and statistical report. A separate reconciliation will be performed for each cost report period in which the capital cost per diem instant relief add-on was paid. The facility shall submit with the annual financial and statistical report a separate schedule reporting total patient days per calendar quarter and a current depreciation schedule identifying the assets related to the add-on.

1.For purposes of recalculating the capital cost per diem instant relief add-on, total patient days will be based on the greater of the number of actual patient days during the period in which the add-on was paid or 85 percent of the facility’s actual licensed bed capacity during the period in which the add-on was paid. For the period beginning July 1, 2023, and ending June 30, 2025, patient days for purposes of the computation of administrative, environmental, and property expenses for non-state government owned nursing facilities will be inpatient days or the minimum occupancy of 70 percent of the licensed capacity of the facility, whichever is greater.

2.The recalculated capital cost per diem instant relief add-on will be added to the non-direct care component of the reimbursement rate for the relevant period, not to exceed the non-direct care rate component limit as determined in paragraph “f.” The facility’s quarterly rates for the relevant period will be retroactively adjusted to reflect the recalculated non-direct care component of the reimbursement rate. All claims with dates of service during the period the capital cost per diem instant relief add-on is paid will be repriced to reflect the recalculated capital cost per diem instant relief add-on.

(13)Effective date of enhanced non-direct care rate component limit. Subject to available funding and previously approved requests for capital cost per diem instant relief add-ons and enhanced non-direct care rate component limits, an enhanced non-direct care rate component limit will be effective:

1.With a capital cost per diem instant relief add-on (if requested at the same time); or

2.Retroactive to the first day of the quarter in which the revised non-direct care rate component limit amount is effective. All claims with dates of service from the effective date will be repriced.

(14)Term of enhanced non-direct care rate component limit. The period for which a facility may be granted an enhanced non-direct care rate component limit without reapplication shall not exceed two years. The total period for which a facility may be granted enhanced non-direct care rate component limits shall not exceed ten years. If the amount of the non-direct care rate component limit is revised during the period for which a facility is granted the enhanced limit, the approval will be terminated effective the first day of the quarter in which the revised non-direct care rate component limit is effective. The facility may submit a new request for the enhanced non-direct care rate component limit.

(15)Ongoing conditions. Any capital cost per diem instant relief add-on or enhanced non-direct care rate component limit granted by the department is temporary. Additional reimbursement shall be immediately terminated if:

1.The facility does not continue to meet all of the initial qualifications for additional reimbursement; or

2.The facility does not make reasonable progress on any plans required for initial qualification; or

3.The facility’s medical assistance program or Medicare certification is revoked. A facility whose certification is revoked is not eligible to submit a subsequent request for a capital cost per diem instant relief add-on or the enhanced non-direct care rate component limit.

(16)Change of ownership. Following a change in nursing facility ownership, any capital cost per diem instant relief add-on or enhanced non-direct care rate component limit that was granted before the change in ownership will continue under the new owner. Future reimbursement rates will be determined pursuant to subrules 81.5(15) and 81.5(16).

i.Quality incentive payment program (QIPP). The QIPP add-on rate will be made to a qualified non-state government-owned nursing facility (NSGO nursing facility) to promote, maintain, and improve resident quality of care and health outcomes.

(1)An NSGO nursing facility qualifies for participation in the QIPP if all the following conditions are met:

1.The NSGO nursing facility has executed a participation agreement with the department.

2.The NSGO nursing facility has provided proof that the entity holds the NSGO nursing facility’s license and has complete operational responsibility for the NSGO nursing facility.

3.The NSGO nursing facility has filed a certification of eligibility application for the QIPP add-on rate program with the department and has received approval from the department for participation in the program.

4.The NSGO nursing facility is in compliance with all care criteria requirements.

5.The non-state government entity (NSGE) has executed a nursing facility provider contract with an NSGO nursing facility.

6.The NSGE has provided and identified the source of state share dollars for the intergovernmental transfer (IGT).

7.The NSGO nursing facility has provided proof of ownership, if applicable, as the licensed operator of the NSGO nursing facility.

8.The NSGO nursing facility has provided to the department an executed management agreement between the NSGE and the NSGO nursing facility manager if applicable.

(2)If at any time a provider is determined not eligible due to not meeting survey standards, the provider will be disqualified for the remainder of the year.

(3)An NSGO nursing facility will qualify for participation in the QIPP if all the following quality measures are met:

Quality Measures

Metrics

Tracking/Scoring

Data Resource

Staffing

Metric 1: Nursing facility maintains an additional four or more hours of registered nurse (RN) coverage per day beyond the CMS minimum standard (8 hrs/day). Does not include managerial hours.
Metric 2: Nursing facility’s per-resident day certified nursing assistants (CNAs), rehabilitation aid, and other contracted aid services are at or above one-half standard deviation above the statewide mean of per-resident-day CNA hours. CNA hours include those of CNAs, rehabilitation aid, and other contracted aide services. CNA hours will be normalized to remove variations in staff hours associated with different levels of resident case mix.
Metric 3: Nursing facility’s per-resident day total nursing hours are at or above one-half standard deviation above the statewide mean of per-resident-day total nursing hours. Nursing hours include those of RNs and licensed practical nurses (LPNs) including restorative nurses. Nursing hours will be normalized to remove variations in staff hours associated with different levels of resident case mix.

Staffing metrics 1, 2, and 3 must be met for facility to be eligible for per diem rate add-on payment.

Payroll-based journal (PBJ) or cost reports

Infection Control

Metric 1: Nursing facility has an infection control program that includes antibiotic stewardship. The program incorporates policies and training as well as monitoring, documenting, and providing staff with feedback.
Metric 2: Percentage of residents with urinary tract infections (UTIs) at rates one-half standard deviation or more below the mean percentage of occurrences for all facilities, based on minimum data set (MDS) data as applied to the nationally reported quality measures.
Metric 3: Percentage of residents with up-to-date pneumonia vaccine measured against a fixed benchmark that is set as the most recently published national average for the related MDS quality metric.

Infection control metrics 1, 2, and 3 must be met for facility to be eligible for per diem rate add-on payment.

Nursing facility will be required to provide its infection control policy and procedure. In addition, facilities will need to provide information regarding training, monitoring, documentation and monitoring of required elements to meet this metric on a periodic basis
CASPER Report
MDS Assessment
Care Compare

Quality Measures

Metric 1: Percentage of high-risk residents with pressure ulcers (for longer-term stay residents) are at rates one-half standard deviation or more below the mean percentage of occurrences for all facilities, based on MDS data as applied to the nationally reported quality measures.
Metric 2: Percentage of residents who had a fall with major injury (for longer-term stay residents) are at rates one-half standard deviation or more below the mean percentage of occurrences for all facilities, based on MDS data as applied to the nationally reported quality measures.
Metric 3: Percentage of residents who received antipsychotic medications are at rates one-half standard deviation or more below the mean percentage of occurrences for all facilities, based on MDS data as applied to the nationally reported quality measures.
Metric 4: Percentage of residents who required increased activities of daily living (ADL) assistance (for longer-term stay residents) are at rates one-half standard deviation or more below the mean percentage of occurrences for all facilities, based on MDS data as applied to the nationally reported quality measures.

Quality measures metrics 1, 2, 3, and 4 must be met for the facility to be eligible for per diem rate add-on payment.

CASPER Report
MDS Assessment
Care Compare

State Survey Results

Number of deficiencies is at or below the state of Iowa average number of nursing facility deficiencies AND the facility has no deficiencies with a scope of F, H, I, J, K, or L.

State survey results must be met for the facility to be eligible for per diem rate add-on payment.

Department of inspections, appeals, and licensing (DIAL) surveys

Quality Assurance Performance Improvement (QAPI) Report

Nursing facility must submit QAPI reports on quarterly basis.

QAPI results must be submitted for the facility to be eligible for per diem rate add-on payment.

QAPI reports

(4)A provider must submit the Intent to Participate Agreement on or before September 30 each year and include all necessary documentation related to the quality measures.

1.Upon receipt of the participation agreement, the department will complete a determination of eligibility based on the care criteria defined above.

2.Providers will be notified of their eligibility annually within 60 days of the agreement due date.

(5)The nursing facility QIPP add-on rate provided to a participating NSGO nursing facility under the QIPP will not exceed Medicare payment principles pursuant to 42 CFR 447.272 (as amended to August 1, 2024) and will be calculated pursuant to 42 CFR 438.6 (as amended to August 1, 2024). The QIPP add-on rate will be calculated and paid as follows:

1.The methodology utilized to calculate the upper payment limit will be based on the data available during the calculation period.

2.The eligible amount used in determining the QIPP add-on rate will be the difference between the state Medicaid payment and the Medicare upper payment limit as determined, on an annual basis, using all Medicaid claims, including fee-for-service (FFS) and Medicaid managed care claims.

3.The difference calculated under numbered paragraph “2” will be divided by total patient days pursuant to subrule 81.5(7).

4.The QIPP add-on rate will be paid prospectively.

(6)A participating NSGO nursing facility shall notify the department of any change of ownership that may affect the participating NSGO nursing facility’s continued eligibility for the QIPP a minimum of 30 days prior to such change.

1.If a participating NSGO nursing facility changes ownership to a privately owned entity, on or after the first day of the QIPP add-on rate calculation period, the privately owned provider is no longer eligible for the QIPP add-on rate.

2.A participating facility must meet the CMS and department requirements to be classified as an NSGO nursing facility. All changes of ownership must be a fair market value transaction.

3.If it is determined that a provider is not a qualified NSGO nursing facility per CMS and the department, the provider shall repay all QIPP add-on payments to the department.

(7)Providers that do not meet eligibility requirements above will be notified of the metrics that were not met.

(8)A participating NSGO nursing facility shall secure allowable intergovernmental transfer funds from a participating NSGE to provide the state share amount. The process for the intergovernmental transfer shall comply with the following:

1.The department, or the department’s designee, will notify the participating NSGO nursing facility of the state share amount to be transferred in the form of an intergovernmental transfer for purposes of seeking federal financial participation for the QIPP add-on rate, within 15 business days after the end of each month. The participating NSGO shall have until the end of the month to remit payment of the state share amount in the form of an intergovernmental transfer to the department or the department’s designee.

2.If there is any outstanding intergovernmental transfer amount at the end of the payment period, the provider will not be able to participate in the QIPP the following year.

81.5(17) Cost report documentation. All nursing facilities, except the Iowa Veterans Home, shall submit an annual cost report based on the closing date of the facility’s fiscal year that incorporates documentation as set forth below. The Iowa Veterans Home shall submit semiannual cost reports based on the closing date of the facility’s fiscal year and the midpoint of the facility’s fiscal year that incorporate documentation as set forth below. The documentation incorporated in all cost reports shall include all of the following information:

a.Information on staffing costs, including the number of hours of the following provided per resident per day by all the following: nursing services provided by registered nurses, licensed practical nurses, certified nurse aides, restorative aides, certified medication aides, and contracted nursing services; other care services; administrative functions; housekeeping and maintenance; and dietary services.

b.The starting and average hourly wage for each class of employees for the period of the report.

c.An itemization of expenses attributable to the home or principal office or headquarters of the nursing facility included in the administrative cost line item.

81.5(18) Inflation factor. The department will consider an inflation factor in determining the reimbursement rate. The inflation factor will be based on the CMS Total Skilled Nursing Facility (CMS/SNF) Market Basket Index published by Data Resources, Inc. The CMS/SNF index listed in the latest available quarterly publication prior to the July 1 rate setting will be used to determine the inflation factor.

81.5(19) Case-mix index calculation.

a.The RUG-III Version 5.12b, 34 group, index maximizer model will be used as the resident classification system to determine all case-mix indices, using data from the minimum data set (MDS) submitted by each facility pursuant to subrule 81.12(9). Standard Version 5.12b case-mix indices developed by CMS will be the basis for calculating the average case-mix index and will be used to adjust the direct care costs in the determination of the direct care patient-day-weighted median and the reimbursement rate pursuant to subrule 81.5(16).

b.Each resident in the facility on the last day of each calendar quarter with a completed and submitted assessment will be assigned a RUG-III 34 group calculated on the resident’s most current assessment available on the last day of each calendar quarter. This RUG-III group will be translated to the appropriate case-mix index referenced in paragraph “a.” From the individual resident case-mix indices, two average case-mix indices for each Medicaid nursing facility will be determined four times per year based on the last day of each calendar quarter.

The facilitywide average case-mix index is the simple average, carried to four decimal places, of all resident case-mix indices. The Medicaid average case-mix index is the simple average, carried to four decimal places, of all indices for residents where Medicaid is known to be the per diem payor source on the last day of the calendar quarter. Assessments that cannot be classified to a RUG-III group due to errors will be excluded from both average case-mix index calculations.

81.5(20) Medicare crossover claims for nursing facility services.

a.Definitions. For purposes of this subrule:

“Crossover claim” means a claim for Medicaid payment for Medicare-covered nursing facility services rendered to a Medicare beneficiary who is also eligible for Medicaid. Crossover claims include claims for services rendered to beneficiaries who are eligible for Medicaid in any category, including but not limited to qualified Medicare beneficiaries and beneficiaries who are eligible for full Medicaid coverage.

“Medicaid-allowed amount” means the Medicaid reimbursement rate for the services rendered (including any portion to be paid by the Medicaid beneficiary as client participation) multiplied by the number of Medicaid units of service included in a crossover claim, as determined under state and federal law and policies.

“Medicaid reimbursement” includes any amount to be paid by the Medicaid beneficiary as Medicaid client participation and any amount to be paid by the department after application of any applicable Medicaid client participation.

“Medicare payment amount” means the Medicare reimbursement rate for the services rendered multiplied by the number of Medicare units of service included in a crossover claim, excluding any Medicare coinsurance or deductible amounts to be paid by the Medicare beneficiary.

b.Crossover claims. Crossover claims for services covered under Medicare Part A and under Medicaid are reimbursed as set out in this paragraph.

(1)If the Medicare payment amount for a crossover claim exceeds or equals the Medicaid-allowed amount for that claim, Medicaid reimbursement for the crossover claim will be zero.

(2)If the Medicaid-allowed amount for a crossover claim exceeds the Medicare payment amount for that claim, Medicaid reimbursement for the crossover claim is the lesser of:

1.The Medicaid-allowed amount minus the Medicare payment amount; or

2.The Medicare coinsurance and deductible amounts applicable to the claim.

81.5(21) Nursing facility quality assurance payments.

a.Quality assurance assessment pass-through. Effective with the implementation of the quality assurance assessment paid pursuant to 441—Chapter 36, a quality assurance assessment pass-through will be added to the Medicaid per diem reimbursement rate as otherwise calculated pursuant to this rule. The quality assurance assessment pass-through will equal the per-patient-day assessment determined pursuant to 441—subrule 36.6(2).

b.Quality assurance assessment rate add-on. Effective with the implementation of the quality assurance assessment paid pursuant to 441—Chapter 36, a quality assurance add-on of $37 per patient day will be added to the Medicaid per diem reimbursement rate as otherwise calculated pursuant to this rule.

c.Use of the pass-through and add-on. As a condition for receipt of the pass-through and add-on, each nursing facility shall submit information to the department on the Nursing Facility Medicaid Enhanced Payment Report demonstrating compliance by the nursing facility with the requirements for use of the pass-through and add-on. 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:

(1)No less than 35 percent of the difference will be used to increase compensation and costs of employment for direct care workers determined pursuant to Iowa Code section 249L.4.

(2)No less than 60 percent of the difference will be used to increase compensation and costs of employment for all nursing facility staff, with increases in compensation and costs of employment determined pursuant to Iowa Code section 249L.4.

d.Effective date. Until federal financial participation to match money collected from the quality assurance assessment pursuant to 441—Chapter 36 has been approved by CMS, none of the nursing facility rate-setting methodologies of this subrule will become effective.

e.End date. If CMS determines that federal financial participation to match money collected from the quality assurance assessment pursuant to 441—Chapter 36 is unavailable for any period, or if the department no longer has the authority to collect the assessment, then beginning on the effective date that such federal financial participation is not available or authority to collect the assessment is rescinded, none of the nursing facility rate-setting methodologies of this subrule will be effective. If the period for which federal match money is unavailable or the authority to collect the assessment is rescinded includes a retroactive period, the department will:

(1)Recalculate Medicaid rates in effect during that period without the rate-setting methodologies of this subrule;

(2)Recompute Medicaid payments due based on the recalculated Medicaid rates;

(3)Recoup any previous overpayments; and

(4)Determine for each nursing facility the amount of quality assurance assessment collected during that period and refund that amount to the facility.

This rule is intended to implement Iowa Code sections 249A.4 and 249A.16 and chapters 249K and 249L.

441—81.6(249A) Continued review.

81.6(1) Level of care. The department will review Medicaid members’ need for continued care in nursing facilities, pursuant to the standards and subject to the appeals process in subrule 81.2(1). For all members enrolled with a managed care organization, the managed care organization shall review a Medicaid member’s need for continued care in a nursing facility at least annually. The managed care organization must submit documentation to the department for all reviews that indicate a change in the member’s level of care. The department will make a final determination for any reviews that indicate a change in the level of care.

81.6(2) PASRR. As a condition of payment for nursing facility care under the Medicaid program when there is a significant change in a resident’s condition, the nursing facility shall, within 24 hours, initiate a PASRR review by the department’s contractor for PASRR evaluations. For purposes of this subrule, “significant change in a resident’s condition” means any admission or readmission to the facility immediately following an inpatient psychiatric hospitalization or any change that is likely to impact the resident’s treatment needs related to a mental illness or intellectual disability. The evaluation shall determine:

a.Whether nursing facility care or skilled nursing care is medically necessary and appropriate for the resident under 441—subrules 79.9(1) and 79.9(2);

b.Whether nursing facility services continue to be appropriate for the resident, as opposed to care in a more specialized facility or in a community-based setting; and

c.Whether the resident needs specialized services for mental illness or intellectual disability, as described in paragraph 81.2(3)“b.”

This rule is intended to implement Iowa Code sections 249A.2(1), 249A.3(3), and 249A.4.

441—81.7(249A) Records.

81.7(1) Content. The facility shall as a minimum maintain the following records:

a.All records required by the department and the department of inspections, appeals, and licensing.

b.Records of all treatments, drugs, and services for which vendors’ payments have been made or are to be made under the medical assistance program, including the authority for and the date of administration of the treatment, drugs, or services.

c.Documentation in each resident’s records that will enable the department to verify that each charge is due and proper prior to payment.

d.Financial records maintained in the standard, specified form including the facility’s most recent audited cost report.

e.All other records as may be found necessary by the department in determining compliance with any federal or state law or rule or regulation promulgated by the United States Department of Health and Human Services or by the department.

f.Census records to include the date, number of residents at the beginning of each day, names of residents admitted, and names of residents discharged.

(1)Census information shall be provided for all residents of the facility.

(2)Census figures for each type of care shall be totaled monthly to indicate the number admitted, the number discharged, and the number of patient days.

(3)Failure to maintain acceptable census records shall result in the per diem rate being computed on the basis of 100 percent occupancy and a request for refunds covering indicated recipients of nursing care that have not been properly accounted for.

g.Resident accounts.

h.In-service education program records.

i.Inspection reports pertaining to conformity with federal, state and local laws.

j.Residents’ personal records.

k.Residents’ medical records.

l.Disaster preparedness reports.

81.7(2) Retention. Records identified in subrule 81.7(1) shall be retained in the facility for a minimum of five years or until an audit is performed on those records, whichever is longer.

81.7(3) Change of owner. All records shall be retained within the facility upon change of ownership.

This rule is intended to implement Iowa Code sections 249A.2(6) and 249A.3(2)“a.”

441—81.8(249A) Payment procedures.

81.8(1) Method of payment. Except for Medicaid accountability measures payment established in paragraph 81.5(16)“g,” facilities will be reimbursed under a modified price-based vendor payment program. A per diem rate will be established based on information submitted according to rule 441—81.5(249A). The per diem rate will include an amount for Medicaid accountability measures.

81.8(2) Authorization of payment. The department will authorize payment for care in a facility. The authorization shall be obtained prior to admission of the resident, whenever possible. For a nursing facility to be eligible for Medicaid payment for a resident, the facility must, when applicable, exhaust all Medicare benefits.

81.8(3) Periods authorized for payment.

a.Payment will be made on a per diem basis for the portion of the month the resident is in the facility.

b.Payment will be authorized as long as the resident is certified as needing care in a nursing facility.

c.Payment will be approved for the day of admission but not the day of discharge or death.

d.Payment will be approved for periods the resident is absent overnight for purpose of visitation or vacation. The facility will be paid to hold the bed for a period not to exceed 18 days in any calendar year. Additional days shall be based upon a recommendation by the resident’s physician in the plan of care that additional days would be rehabilitative.

e.Payment will be approved for a period not to exceed 10 days in any calendar month when the resident is absent due to hospitalization. Medicaid payment to the facility may not be initiated while a resident is on reserve bed days unless the person was residing in the facility as a private pay resident prior to the hospitalization and returns to the facility as a resident.

f.Payment for periods when residents are absent for a visit, vacation, or hospitalization will be made at zero percent of the nursing facility’s rate, except for special population facilities and state-operated nursing facilities, which will be paid for such periods at 42 percent of the facility’s rate.

g.Payment for residents determined by utilization review to require the residential level of care will be made at the maximum state supplementary assistance rate. This rate is effective as of the date of final notice by utilization review that the lower level of care is required.

h.Ventilator patients.

(1)Definition. For purposes of this paragraph only, “ventilator patients” means Medicaid-eligible patients who, as determined by the quality improvement organization, require a ventilator at least six hours every day, are inappropriate for home care, and have medical needs that require skilled care.

(2)Reimbursement. In-state nursing facilities will receive reimbursement for care of ventilator patients equal to the sum of the Medicare-certified hospital-based nursing facility rate plus the Medicare-certified hospital-based nursing facility non-direct care rate component as defined in subparagraph 81.5(16)“f”(3). Facilities may continue to receive this reimbursement at this rate for 30 days after a ventilator patient is weaned from a ventilator if, during the 30 days, the patient continues to reside in the facility and continues to meet skilled care criteria.

i.Payment for residents of a special population facility licensed by the department of inspections, appeals, and licensing as an intermediate care facility for persons with mental illness will be made only when the resident is aged 65 or over. If a resident under the age of 65 is admitted with a payment source other than Medicaid, the facility shall notify the resident, or when applicable the resident’s guardian or legal representative, that the department may neither make payment to the facility nor make payment for any other services rendered by any provider while the person resides in the facility, until the resident attains the age of 65.

j.Nonpayment for provider-preventable conditions. Reimbursement will not be made for patient days attributable to preventable conditions identified pursuant to this rule that develop in a nursing facility. Any patient days attributable to a provider-preventable condition must be billed as noncovered days. A provider-preventable condition is one in which any of the following occur:

(1)The wrong surgical or other invasive procedure is performed on a resident; or

(2)A surgical or other invasive procedure is performed on the wrong body part; or

(3)A surgical or other invasive procedure is performed on the wrong resident.

81.8(4) Supplementation. Only the amount of client participation may be billed to the resident for the cost of care, and the facility must accept the combination of client participation and payment made through the department as payment in full for the care of a resident. No additional charges shall be made to residents or family members for any supplies or services required in the facility-developed plan of care for the resident.

Residents may choose to spend their personal funds on items of personal care such as professional beauty or barber services, but the facility shall not require this expenditure and shall not routinely obligate residents to any use of their personal funds.

a.Supplies or services that the facility shall provide:

(1)Nursing services, social work services, activity programs, individual and group therapy, rehabilitation or habilitation programs provided by facility staff in order to carry out the plan of care for the resident.

(2)Services related to the nutrition, comfort, cleanliness and grooming of a resident as required under state licensure and Medicaid survey regulations.

(3)Medical equipment and supplies including wheelchairs except for customized wheelchairs for which separate payment may be made pursuant to 441—paragraph 78.10(2)“d,” medical supplies except for those listed in 441—paragraph 78.10(4)“b,” oxygen except under circumstances specified in 441—paragraph 78.10(2)“a,” and other items required in the facility-developed plan of care.

(4)Nonprescription drugs ordered by the physician.

(5)Fees charged by medical professionals for services requested by the facility that do not meet criteria for direct Medicaid payment.

b.The facility shall arrange for nonemergency transportation for members to receive necessary medical services outside the facility.

(1)If a family member, friend, or volunteer is not available to provide the transportation at no charge, the facility shall arrange and pay for the medically necessary transportation within 30 miles of the facility (one way).

(2)For medically necessary transportation beyond 30 miles from the facility (one way), when no family member, friend, or volunteer is available to provide the transportation at no charge, the facility shall arrange for transportation through the broker designated by the department, with the cost to be paid by the broker pursuant to rule 441—78.13(249A).

c.The department will provide direct payment to relieve the facility of payment responsibility for certain medical equipment and services that meet the Medicare definition of medical necessity and are provided by providers enrolled in the Medicaid programs including:

(1)Physician services.

(2)Ambulance services.

(3)Hospital services.

(4)Hearing aids, braces and prosthetic devices.

(5)Customized wheelchairs for which separate payment may be made pursuant to 441—subparagraph 78.10(2)“a”(4).

d.Other supplies or services for which direct Medicaid payment may be available include:

(1)Drugs covered pursuant to 441—subrule 78.1(2).

(2)Dental services.

(3)Optician and optometrist services.

(4)Repair of medical equipment and appliances that belong to the resident.

(5)Transportation to receive medical services beyond 30 miles from the facility (one way), through the broker designated by the department pursuant to a contract between the department and the broker.

(6)Other medical services specified in 441—Chapter 78.

e.The following supplementation is permitted:

(1)The resident, the resident’s family, or friends may pay to hold the resident’s bed in cases where a resident who is not discharged from the facility is absent overnight. When the resident is discharged, the facility may handle the holding of the bed in the same manner as for a private paying resident.

(2)Payments made by the resident’s family toward cost of care of the resident shall not be considered as supplementation so long as the payments are included in client participation and are not over and above the payment made by the state for care of the resident.

(3)If a physician does not order a nonprescription drug by brand name, the facility may offer a generic. If a resident or family member requests a brand name, the resident or family member may pay for the brand-name nonprescription drug.

(4)Supplementation for provision of a private room not otherwise covered under the medical assistance program, subject to the following conditions, requirements, and limitations:

1.Supplementation for provision of a private room is not permitted for any time period during which the private room is therapeutically required pursuant to 42 CFR 483.10 (as amended to August 1, 2024).

2.Supplementation for provision of a private room is not permitted for a calendar month if no room other than the private room was available as of the first day of the month or as of the resident’s subsequent initial occupation of the private room.

3.Supplementation for provision of a private room is not permitted for a calendar month if the facility’s occupancy rate was less than 50 percent as of the first day of the month or as of the resident’s subsequent initial occupation of the private room.

4.Supplementation for provision of a private room is not permitted if the nursing facility only provides one type of room or all private rooms.

5.If a nursing facility provides for supplementation for provision of a private room, the facility may base the supplementation amount on the difference between the amount paid for a room covered under the medical assistance program and the private pay rate for the private room identified for supplementation. However, the total payment for the private room from all sources for a calendar month shall not be greater than the aggregate average private room rate during that month for the type of rooms covered under the medical assistance program for which the resident would be eligible.

6.If a nursing facility provides for supplementation for provision of a private room, the facility shall notify all residents, prospective residents, and their legal representatives in accordance with Iowa Code section 249A.4(10)“b”(1).

7.For a resident for whom the nursing facility receives supplementation, the nursing facility shall indicate in the resident’s record the information set forth in Iowa Code section 249A.4(10)“b”(2).

f.Any medical equipment, supplies, appliances, or devices, personal care items, drugs, or other items of personal property that are paid for directly by the Medicaid program or are paid for by the resident or the resident’s family, on a nonrental basis, are the personal property of the resident.

g.The facility shall not charge a resident for days that are not covered under Medicaid due to a provider-preventable condition pursuant to paragraph 81.8(3)“j” and shall not discharge a resident due to nonpayment for such days.

This rule is intended to implement Iowa Code section 249A.4.

441—81.9(249A) Billing procedures. Claims for service must be sent to the department after the month of service and within 365 days of the date of service. Claims must be submitted electronically through the department’s electronic clearinghouse. A remittance advice of the claims paid may be obtained through the Iowa Medicaid portal access (IMPA) system. Adjustments to submitted claims may be made electronically as provided for by the department. A request for an adjustment to a paid claim must be received by the department within one year from the date the claim was paid in accordance with rule 441—80.4(249A).

This rule is intended to implement Iowa Code sections 249A.2(6) and 249A.3(2)“a.”

441—81.10(249A) Closing of facility. When a facility is planning on closing, the department and the department’s contracted managed care organizations with which the facility is enrolled shall be notified at least 60 days in advance of the closing. Plans for the transfer of residents receiving medical assistance shall be approved by the resident’s managed care organization or by the department for residents not enrolled with a managed care organization.

This rule is intended to implement Iowa Code sections 249A.2(6) and 249A.3(2)“a.”

441—81.11(249A) Conditions of participation for nursing facilities. All nursing facilities shall enter into a contractual agreement with the department that sets forth the terms under which they will participate in the program.

81.11(1) Procedures for establishing health care facilities as Medicaid facilities. All survey procedures and certification process shall be in accordance with department of health and human services publication “State Operations Manual” (as amended to August 1, 2024).

81.11(2) Medicaid provider agreements.

a.The health care facility shall be recommended for certification by the department of inspections, appeals, and licensing for participation as a nursing facility before a provider agreement may be issued. All survey procedures and certification process shall be in accordance with department of health and human services publication “Providers Certification State Operations Manual” as amended to August 1, 2024. The effective date of a provider agreement may not be earlier than the date of certification.

b.When it becomes necessary for the department to cancel or refuse to renew a Title XIX provider agreement, federal financial participation may continue for 30 days beyond the date of cancellation, if the extension is necessary to ensure the orderly transfer of residents.

81.11(3) Distinct part requirement. All facilities that provide nursing facility care and also provide other types of care shall set aside a distinct or identifiable part for the provision of the nursing facility care.

a.The distinct part shall meet the following conditions:

(1)The distinct part shall meet all requirements for a nursing facility.

(2)The distinct part shall be identifiable as a unit such as a designated group of rooms, an entire ward or contiguous wards, wings, floor, or building. It shall consist of all beds and related facilities in the unit for whom payment is being made for nursing facility services. It shall be clearly identified and licensed by the department of inspections, appeals, and licensing.

(3)The appropriate personnel shall be assigned to the identifiable unit and shall work there regularly. Immediate supervision of staff shall be provided in the unit at all times by qualified personnel as required for licensure.

(4)The distinct part may share such central services and facilities as management services, dietary services, building maintenance and laundry with other units.

(5)When members of the staff share time between units of the facility, written records shall be maintained of the time assigned to each unit.

b.Hospitals participating as nursing facilities shall meet all of the same conditions applicable to freestanding nursing facilities.

c.Nothing herein shall be construed as requiring transfer of a resident within or between facilities when in the opinion of the attending physician the transfer might be harmful to the physical or mental health of the resident. The opinion of the physician shall be recorded on the resident’s medical chart and stands as a continuing order unless the circumstances requiring the exception change.

81.11(4) Civil rights. The nursing facility shall comply with Title VI of the Civil Rights Act of 1964 (as amended to August 1, 2024) in all areas of administration including admissions, records, services and physical facilities, room assignments and transfers, attending physicians’ privileges and referrals. Written statements of compliance shall be available to residents, employees, attending physicians and other members of the public.

81.11(5) Resident rights. The resident has a right to a dignified existence, self-determination and communication with and access to persons and services inside and outside the facility. A facility shall protect and promote the rights of each resident in accordance with 42 CFR 483.10 (as amended to August 1, 2024).

81.11(6) Admission, transfer and discharge rights.

a.Definition. Transfer and discharge includes movement of a resident to a bed outside of the certified facility whether that bed is in the same physical plant or not. Transfer and discharge does not refer to movement of a resident to a bed within the same certified facility.

b.Transfer or discharge requirements. The facility shall permit each resident to remain in the facility, and not transfer or discharge the resident, in accordance with 42 CFR 483.15 (as amended to August 1, 2024).

81.11(7) Resident behavior and facility practices.

a.Restraints. The resident has the right to be free from any physical or chemical restraints imposed for purposes of discipline or convenience and not required to treat the resident’s medical symptoms.

b.Abuse. The resident has the right to be free from verbal, sexual, physical, or mental abuse, corporal punishment, and involuntary seclusion.

c.Staff treatment of residents. The facility shall develop and implement written policies and procedures that prohibit mistreatment, neglect, and abuse of residents and misappropriation of resident property.

(1)Facility staff shall not use verbal, mental, sexual, or physical abuse, including corporal punishment, or involuntary seclusion of residents. The facility shall not employ persons who have been found guilty by a court of law of abusing, neglecting or mistreating residents or who have had a finding entered into the state nurse aide registry concerning abuse, neglect, mistreatment of residents or misappropriation of their property.

The facility shall report any knowledge it has of actions by a court of law against an employee, which would indicate unfitness for service as a nurse aide or other facility staff to the state nurse aide registry or licensing authorities.

(2)The facility shall ensure that all alleged violations involving mistreatment, neglect or abuse including injuries of unknown source and misappropriation of resident property, are reported immediately to the administrator of the facility or to other officials (including the department of inspections, appeals, and licensing) in accordance with state law through established procedures.

(3)The facility shall have evidence that all alleged violations are thoroughly investigated and shall prevent further potential abuse while the investigation is in progress.

(4)The results of all investigations conducted by facility staff shall be reported to the administrator or the administrator’s designated representative or to other officials (including the department of inspections, appeals, and licensing) in accordance with state law within five working days of the incident and if the alleged violation is verified, take appropriate corrective action.

81.11(8) Quality of life. A facility shall care for its residents in a manner and in an environment that promotes maintenance or enhancement of each resident’s quality of life in accordance with 42 CFR 483.10 (as amended to August 1, 2024).

a.Activities. The facility shall provide for an ongoing program of activities designed to meet, based on the comprehensive assessment, the interests and the physical, mental, and psychosocial well-being of each resident in accordance with 42 CFR 483.24(c) (as amended to August 1, 2024).

b.Social services.

(1)The facility shall provide medically related social services to attain or maintain the highest practicable physical, mental, or psychosocial well-being of each resident.

(2)A facility with more than 120 beds shall employ a qualified social worker on a full-time basis in accordance with 42 CFR 483.70(p) (as amended to August 1, 2024).

c.Environment. The facility shall provide a safe, clean, comfortable and homelike environment in accordance with 42 CFR 483.10(i) (as amended to August 1, 2024).

81.11(9) Resident assessment. The facility shall conduct initially and periodically a comprehensive, accurate, standardized, reproducible assessment of each resident’s functional ability in accordance with 42 CFR 483.20(a) through (j) (as amended to August 1, 2024).

a.Use of independent assessors. If the department or the department of inspections, appeals, and licensing determines, under a survey or otherwise, that there has been a knowing and willful certification of false statements in a resident assessment, the department or the department of inspections, appeals, and licensing may require that resident assessments under this paragraph be conducted and certified by individuals who are independent of the facility and who are approved by the department or the department of inspections, appeals, and licensing for a period specified by the agency.

b.Comprehensive care plans. The facility shall develop a comprehensive care plan for each resident in accordance with 42 CFR 483.21(b) (as amended to August 1, 2024).

c.Discharge summary. When the facility anticipates discharges, a resident shall have a discharge summary in accordance with 42 CFR 483.21(c)(2) (as amended to August 1, 2024).

d.Preadmission resident assessment. The facility shall conduct prior to admission a resident assessment of all persons seeking nursing facility placement. The assessment information gathered shall be similar to the data in the minimum data set (MDS) resident assessment tool.

81.11(10) Quality of care. Each resident shall receive and the facility shall provide the necessary care and services to attain or maintain the highest practicable physical, mental and psychosocial well-being, in accordance with the comprehensive assessment and plan of care. A facility shall ensure that residents receive treatment in accordance with 42 CFR 483.24 and 483.25 (as amended to August 1, 2024).

a.Behavioral health services. Based on the comprehensive assessment of a resident, the facility shall ensure that residents receive and the facility must provide the necessary behavioral health care andservicesto attain or maintain the highest practicable physical, mental, and psychosocial well-being in accordance with 42 CFR 483.40 (as amended to August 1, 2024).

b.Unnecessary drugs. Each resident’s drug regimen shall be free from unnecessary drugs in accordance with 42 CFR 483.45(d) and (e) (as amended to August 1, 2024).

c.Medication errors. The facility shall ensure that it meets the standards set forth in 42 CFR 483.45(f) (amended to August 1, 2024).

81.11(11) Nursing services. In accordance with 42 CFR 483.35 (as amended to August 1, 2024), the facility shall have sufficient nursing staff to provide nursing and related services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident, as determined by resident assessments and individual plans of care.

81.11(12) Dietary services. In accordance with 42 CFR 483.60 (as amended to August 1, 2024), the facility shall provide each resident with a nourishing, palatable, well-balanced diet that meets the daily nutritional and special dietary needs of each resident.

81.11(13) Physician services. In accordance with 42 CFR 483.30 (as amended to August 1, 2024), a physician shall personally approve in writing a recommendation that an individual be admitted to a facility. Each resident shall remain under the care of a physician.

81.11(14) Specialized services. When indicated, specialized services shall be provided to residents as follows:

a.Specialized rehabilitative services. Specialized rehabilitative services shall be provided by qualified personnel under the written order of a physician in accordance with 42 CFR 483.65 (as amended to August 1, 2024).

b.Specialized services for mental illness. “Specialized services for mental illness” means services provided in response to an exacerbation of a resident’s mental illness that:

(1)Are beyond the normal scope and intensity of nursing facility responsibility;

(2)Involve treatment other than routine nursing care, supportive therapies such as activity therapy, and supportive counseling by nursing facility staff;

(3)Are provided through a professionally developed plan of care with specific goals and interventions;

(4)May be provided only by a specialized licensed or certified practitioner;

(5)Are expected to result in specific, identified improvements in the resident’s psychiatric status to the level before the exacerbation of the resident’s mental illness; and

(6)May include:

1.Acute inpatient psychiatric treatment. When inpatient psychiatric treatment may be prevented through specialized services provided in the nursing facility, services provided in the nursing facility are preferred.

2.Initial psychiatric evaluation to determine a resident’s diagnosis and to develop a plan of care.

3.Follow-up psychiatric services by a psychiatrist to evaluate resident response to psychotropic medications, to modify medication orders and to evaluate the need for ancillary therapy services.

4.Psychological testing required for a specific differential diagnosis that will result in the adoption of appropriate treatment services.

5.Individual or group psychotherapy as part of a plan of care addressing specific symptoms.

6.Any clinically appropriate service that is available for which the member meets eligibility criteria.

c.Specialized services for intellectual disability. “Specialized services for intellectual disability” means services that:

(1)Are beyond the normal scope and intensity of nursing facility responsibility;

(2)Involve treatment other than routine nursing care, supportive therapies such as activity therapy, and supportive counseling by nursing facility staff;

(3)Are provided through a professionally developed plan of care with specific goals and interventions;

(4)Must be supervised by a qualified intellectual disability professional; and

(5)May include:

1.A functional assessment of maladaptive behaviors.

2.Development and implementation of a behavioral support plan.

3.Community living skills training for members who desire to live in a community setting and for whom community living is appropriate as determined by the Level II evaluation. Training may include adaptive behavior skills, communication skills, social skills, personal care skills, and self-advocacy skills.

81.11(15) Dental services. In accordance with 42 CFR 483.55 (as amended to August 1, 2024), the facility shall assist residents in obtaining routine and 24-hour emergency dental care.

81.11(16) Pharmacy services. In accordance with 42 CFR 483.45 (as amended to August 1, 2024), the facility shall provide routine and emergency drugs and biologicals to its residents or obtain them under an agreement. The nursing facility may permit a certified medication aide to administer drugs, but only under the general supervision of a licensed nurse.

81.11(17) Infection control. In accordance with 42 CFR 483.80 (as amended to August 1, 2024), the facility shall establish and maintain an infection control program designed to provide a safe, sanitary, and comfortable environment in which residents reside and to help prevent the development and transmission of disease and infection.

81.11(18) Physical environment. In accordance with 42 CFR 483.90 (as amended to August 1, 2024), the facility shall be designed, constructed, equipped and maintained to protect the health and safety of residents, personnel and the public.

81.11(19) Administration. In accordance with 42 CFR 483.70(a) through (d) (as amended to August 1, 2024), a facility shall be administered in a manner that enables it to use its resources effectively and efficiently to attain or maintain the highest practicable physical, mental and psychosocial well-being of each resident.

a.Required training of nurse aides.

(1)Definitions.

“Licensed health professional” means a physician; physician assistant; nurse practitioner; physical, speech or occupational therapist; registered professional nurse; licensed practical nurse; or licensed or certified social worker.

“Nurse aide” means any person providing nursing or nursing-related services to residents in a facility who is not a licensed health professional, a registered dietitian, or someone who volunteers to provide these services without pay.

(2)General rule. A facility shall not use any person working in the facility as a nurse aide for more than four months, on a permanent basis in accordance with the exceptions and provisions specified in 42 CFR 483.25(d) (as amended to August 1, 2024).

b.Proficiency of nurse aides. The facility shall ensure that nurse aides are able to demonstrate competency in skills and technique necessary to care for residents’ needs, as identified through resident assessments, and described in the plan of care.

c.Staff qualifications. Staff qualifications must be met in accordance with 42 CFR 483.70(f) (as amended to August 1, 2024).

d.Use of outside resources. If the facility does not employ a qualified professional person to furnish a specific service to be provided by the facility, the facility shall have that service furnished to residents by a person or agency outside the facility under an arrangement described in Section 1861(w) of the Omnibus Budget Reconciliation Act of 1987 or an agreement described in 42 CFR 483.70(g) (as amended to August 1, 2024).

e.Medical director. The facility shall designate a physician to serve as medical director in accordance with 42 CFR 483.70(h) (as amended to August 1, 2024).

f.Laboratory, radiology, and other diagnostic services. The facility shall provide or obtain clinical laboratory, radiology, and other diagnostic services to meet the needs of its residents in accordance with 42 CFR 483.50 (as amended to August 1, 2024).

g.Clinical records. The facility shall maintain clinical records on each resident in accordance with 42 CFR 483.70(i) (as amended to August 1, 2024).

h.Disaster and emergency preparedness.

(1)The facility shall have detailed written plans and procedures to meet all potential emergencies and disasters, such as fire, severe weather, and missing residents.

(2)The facility shall train all employees in emergency procedures when they begin to work in the facility, periodically review the procedures with existing staff, and carry out staff drills using those procedures.

i.Transfer agreement. The facility shall have in effect a written transfer agreement with one or more hospitals approved for participation under the Medicare and Medicaid programs in accordance with 42 CFR 483.70(j) (as amended to August 1, 2024).

j.Quality assessment and assurance. A facility shall maintain a quality assessment and assurance committee in accordance with 42 CFR 483.75(g) through (i) (as amended to August 1, 2024).

k.Disclosure of ownership.

(1)The facility shall comply with the disclosure requirements of 42 CFR 420.206 and 455.104 (as amended to August 1, 2024).

(2)The facility shall provide written notice to the department of inspections, appeals, and licensure at the time of change, if a change occurs in:

1.Persons with an ownership or control interest.

2.The officers, directors, agents, or managing employees.

3.The corporation, association, or other company responsible for the management of the facility.

4.The facility’s administrator or director of nursing.

(3)The notice specified in subparagraph (2) above shall include the identity of each new individual or company.

441—81.12(249A) Audits.

81.12(1) Audit of financial and statistical report. Authorized representatives of the department or the U.S. Department of Health and Human Services shall have the right, upon proper identification, to audit, using generally accepted auditing procedures, the general financial records of a facility to determine if expenses reported on the Financial and Statistical Report are reasonable and proper according to the rules set forth in rule 441—81.5(249A). The aforementioned audits may be done either on the basis of an on-site visit to the facility, their central accounting office, or office(s) of their agent(s).

a.When a proper per diem rate cannot be determined, through generally accepted and customary auditing procedures, the auditor shall examine and adjust the report to arrive at what appears to be an acceptable rate and shall recommend to the department that the indicated per diem should be reduced to 75 percent of the established payment rate for the ensuing six-month period and if the situation is not remedied on the subsequent Financial and Statistical Report, the health facility shall be suspended and eventually canceled from the nursing facility program, or

b.When a health facility continues to include as an item of cost an item or items that had in a prior audit been removed by an adjustment in the total audited costs, the auditor shall recommend to the department that the per diem be reduced to 75 percent of the current payment rate for the ensuing six-month period. The department may, after considering the seriousness of the exception, make the reduction.

81.12(2) Audit of proper billing and handling of patient funds.

a.The department; the department’s contracted managed care organizations; field auditors of the department of inspections, appeals, and licensing; and representatives of the U.S. Department of Health and Human Services, upon proper identification, have the right to audit billings to the department and receipts of client participation, to ensure the facility is not receiving payment in excess of the contractual agreement and that all other aspects of the contractual agreement are being followed, as deemed necessary.

b.The department; the department’s contracted managed care organizations; field auditors of the department of inspections, appeals, and licensing; and representatives of the U.S. Department of Health and Human Services, upon proper identification, have the right to audit records of the facility to determine proper handling of patient funds in compliance with subrule 81.3(3).

c.The auditor shall recommend and the department shall request repayment by the facility to either the department or the resident(s) involved, any sums inappropriately billed to the department or collected from the resident.

d.The facility shall have 60 days to review the audit and repay the requested funds or present supporting documentation indicating that the requested refund amount, or part thereof, is not justified.

e.When the facility fails to comply with paragraph “d,” the requested refunds may be withheld from future payments to the facility. The withholding shall not be more than 25 percent of the average of the last six monthly payments to the facility. The withholding shall continue until the entire requested refund amount is recovered. If in the event the audit results indicate significant problems, the audit results may be referred to the attorney general’s office for whatever action may be deemed appropriate.

f.When exceptions are taken during the scope of an audit that are similar in nature to the exceptions taken in a prior audit, the auditor shall recommend and the department may, after considering the seriousness of the exceptions, reduce payment to the facility to 75 percent of the current payment rate.

This rule is intended to implement Iowa Code sections 249A.2, 249A.3(2)“a,” and 249A.4.

441—81.13(249A) Nurse aide requirements and training and testing programs.

81.13(1) Deemed meeting of requirements. A nurse aide is deemed to satisfy the requirement of completing a nurse aide training and competency evaluation approved by the department of inspections, appeals, and licensing if:

a.The nurse aide successfully completed a nurse aide training and competency evaluation program before July 1, 1989, and

(1)At least 60 clock hours were substituted for 75 clock hours, and the person has made up at least the difference in the number of clock hours in the program the person completed and 75 clock hours in supervised practical nurse aide training or in regular in-service nurse aide education, or

(2)The person was found to be competent (whether or not by the state) after completion of a nurse aide training of at least 100 clock hours’ duration, or

(3)The person can demonstrate that the person served as a nurse aide at one or more facilities of the same employer in Iowa for at least 24 consecutive months before December 19, 1989, or

(4)The person completed, before July 1, 1989, a nurse aide training and competency evaluation program that the department of inspections, appeals, and licensing determines would have met the requirements for approval at the time it was offered; or

b.The person is a veteran, an active duty service member, or a member of the reserve forces, who has:

(1)Successfully completed a U.S. military training program that includes a curriculum comparable to the nurse aide training program required by this rule and has documented successful completion of that program with either a diploma, certifications, or Form DD 214 showing completion of hospital corpsman or medical service specialist or equivalent training, and

(2)Provided documentation showing that the person has 75 clock hours of practical experience in a nurse aide role, which may include classroom instruction, prior equivalent experience, or a combination of the two, and

(3)Successfully completed the nurse aide training and competency examination.

81.13(2) State review and approval of nurse aide training and competency evaluation programs or competency evaluation programs.

a.The department of inspections, appeals, and licensing will, in the course of all surveys, determine whether the nurse aide training and evaluation requirements of paragraph 81.11(19)“e” and subrule 81.14(1) are met.

b.Requirements for approval of programs.

(1)Before the department of inspections, appeals, and licensing approves a nurse aide training and competency evaluation program or competency evaluation program, the department of inspections, appeals, and licensing will determine whether:

1.A nurse aide training and competency evaluation program meets the course requirements of 81.14(3).

2.A nurse aide competency evaluation program meets the requirements of 81.14(4).

(2)Except as provided by paragraph 81.14(2)“f,” the department of inspections, appeals, and licensing will not approve a nurse aide training and competency evaluation program or competency evaluation program offered by or in a facility that, in the previous two years:

1.Has operated under a nurse staffing waiver for a period in excess of 48 hours per week; or

2.Has been subject to an extended or partial extended survey; or

3.Has been assessed a civil money penalty of not less than $5,000; or

4.Has operated under temporary management appointed to oversee the operation of the facility and to ensure the health and safety of the facility’s residents; or

5.Pursuant to state action, was closed or had its residents transferred; or

6.Has been terminated from participation in the Medicaid or Medicare program; or

7.Has been denied payment.

c.Application process. Applications shall be submitted to the department of inspections, appeals, and licensing before a new program begins and every two years thereafter on a form prescribed by the department. The department of inspections, appeals, and licensing will, within 90 days of the date of a request or receipt of additional information from the requester:

(1)Advise the requester whether or not the program has been approved; or

(2)Request additional information from the requesting entity.

d.Duration of approval. The department of inspections, appeals, and licensing will not grant approval of a nurse aide training and competency evaluation program for a period longer than two years. A program shall notify the department of inspections, appeals, and licensing and the department of inspections, appeals, and licensing will review that program when there are substantive changes made to that program within the two-year period.

e.Withdrawal of approval. The department of inspection, appeals, and licensing will follow the provision of 42 CFR 483.151(e) (as amended to August 1, 2024) regarding withdrawals of approvals.

f.An exception to subparagraph 81.14(2)“b”(2) may be granted by the department of inspections, appeals, and licensing for 75-hour nurse aide training courses offered in (but not by) a facility under the following conditions:

(1)The facility has submitted a Nurse Aide Education Program Waiver Request, to the department of inspections, appeals, and licensing to request a waiver for each 75-hour nurse aide training course to be offered in (but not by) the facility.

(2)The 75-hour nurse aide training is offered in a facility by an approved NATCEP.

(3)No other NATCEP is offered within ten minutes’ travel from the facility, unless the facility can demonstrate the distance or program would create a hardship for program participants.

(4)The facility is in substantial compliance with the federal requirements related to nursing care and services.

(5)The facility is not a poor performing facility.

(6)Employees of the facility do not function as instructors for the program unless specifically approved by the department of inspections, appeals, and licensing.

(7)The NATCEP sponsoring the 75-hour nursing aide training course is responsible for program administration and for ensuring that program requirements are met.

(8)The NATCEP has submitted an evaluation to the department of inspections, appeals, and licensing indicating that an adequate teaching and learning environment exists for conducting the course.

(9)The NATCEP has developed policies for communicating and resolving problems encountered during the course, including notice by the facility to the program instructor and students on how to contact the department of inspections, appeals, and licensing to register any concerns encountered during the course.

(10)The NATCEP shall require the program instructor and students to complete an evaluation of the course. The instructor shall return the completed evaluations to the NATCEP that shall return the evaluations to department of inspections, appeals, and licensing.

81.13(3) Requirements for approval of a nurse aide training and competency evaluation program. The department has designated the department of inspections, appeals, and licensing to approve required nurse aide training and competency evaluation programs. Policies and procedures governing approval of the programs are set forth in 42 CFR 483.152 (as amended to August 1, 2024).

a.If a person who is not employed, or does not have an offer to be employed, as a nurse aide becomes employed by, or receives an offer of employment from, a facility no later than 12 months after completing a nurse aide training and competency evaluation program or competency evaluation program, the facility shall reimburse the nurse aide for costs incurred in completing the program or competency evaluation on a pro rata basis during the period in which the person is employed as a nurse aide. The formula for paying the nurse aides on a pro rata basis shall be as follows:

(1)Add all costs incurred by the nurse aide for the course, books, and competency evaluations.

(2)Divide the total arrived at in subparagraph (1) above by 12 to prorate the costs over a one-year period and establish a monthly rate.

(3)The nurse aide shall be reimbursed the monthly rate each month the nurse aide works at the facility until one year from the time the nurse aide completed the course.

b.Setting and equipment. The classroom shall have appropriate equipment, be of adequate size, and not interfere with resident activities.

c.Records and reports. Nurse aide education programs approved by the department of inspections, appeals, and licensing shall:

(1)Notify the department of inspections, appeals, and licensing:

1.Of dates of classroom and clinical sessions as well as location of classrooms and clinical practice sites before each course begins and if the course is canceled.

2.When a facility or other training entity will no longer be offering nurse aide training courses.

3.Whenever the person coordinating the training program is hired or terminates employment.

(2)Keep a list of faculty members and their qualifications available for department review.

(3)Provide each nurse aide a record of skills for which the nurse aide has been found competent during the course and which may be performed before completion of the competency evaluation.

(4)Complete a lesson plan for each unit that includes behavioral objectives, a topic outline and student activities and experiences.

(5)Provide the student, within 30 days of the last class period, evidence of having successfully completed the course.

81.13(4) Nurse aide competency evaluation. Nurse aid competency evaluation program shall be administered in accordance with 42 CFR 483.154 (as amended to August 1, 2024).

a.Successful completion of the competency evaluation program.

(1)A score of 70 percent or above is passing for both the written or oral and skills demonstration parts of the test.

(2)A record of successful completion of the competency evaluation shall be included in the nurse aide registry within 30 days of the date the person is found to be competent.

(3)The competency testing entity shall inform the nurse aide of the test score within 30 calendar days of the completion of the test and shall inform the nurse aide registry of the nurse aide’s scores within 20 calendar days after the test is administered.

b.Unsuccessful completion of the competency evaluation program.

(1)If the person does not complete the evaluation satisfactorily, the person shall be advised in writing within ten working days after the test is scored:

1.Of the areas that the person did not pass.

2.That the person has three opportunities to take the evaluation.

(2)Each person shall have three opportunities to pass each part of the test. If one part of the test is failed, only that part need be taken a second or third time. If either part of the test is failed three times, the 75-hour course shall be taken or retaken before the test can be taken again.

c.Storage of evaluation instrument. The person responsible for administering a competency evaluation shall provide secure storage of the evaluation instruments when they are not being administered or processed.

d.Application process. Entities wishing to secure approval for a competency evaluation program shall submit a copy of the evaluation plan and procedures to the department of inspections, appeals, and licensing. The department of inspections, appeals, and licensing shall notify the applicant of its decision within 90 days of receipt of the application. The notification shall include the reason for not giving approval if approval is denied and the applicable rule citation.

81.13(5) Registry of nurse aides.

a.Establishment of registry. The department of inspections, appeals, and licensing shall establish and maintain a registry of nurse aides in accordance with 42 CFR 483.156 (as amended to August 1, 2024). In addition, the registry shall contain a record of known convictions by a court of law of a person convicted of abuse, neglect, mistreatment, or misappropriation of resident property.

b.Placement of names on nurse aide registry. The facility shall ensure that the name of each person employed as a nurse aide in a Medicare- or Medicaid-certified nursing facility in Iowa is submitted to the registry.

(1)Persons employed as nurse aides shall complete the Nurse Aide Registry Application within the first 30 days of employment. This form shall be submitted to the department of inspections, appeals, and licensing. The application may be obtained by telephone or by electronic request from the nurse aide registry.

(2)A nurse aide who is not employed may apply for inclusion on the registry by submitting a copy of completed application to the nurse aide registry.

(3)When the registry has received a signed application and entered the required training and testing information on the registry, an electronic notification will be sent to the nurse aide that includes the registry ID number for the nurse aide to use when accessing the online registry. A nurse aide may obtain a copy of the information on the registry by accessing the information on the registry database.

81.13(6) Hearing. When there is an allegation of abuse against a nurse aide, the department of inspections, appeals, and licensing will investigate that allegation. When the investigation makes a finding of an act of abuse, the nurse aide named will be notified of this finding and the right to a hearing. The nurse aide shall have 30 days to request a hearing. The request shall be in writing and shall be sent to the department of inspections, appeals, and licensing. The hearing shall be held pursuant to 481—Chapter 10. After 30 days, if the nurse aide fails to appeal, or when all appeals are exhausted, the nurse aide registry will include a notation that the nurse aide has a founded abuse report on record if the final decision indicates the nurse aide performed an abusive act.

81.13(7) Appeals. Adverse decisions made by the department of inspections, appeals, and licensing in administering these rules may be appealed pursuant to 481—Chapter 10.

This rule is intended to implement Iowa Code section 249A.4.

441—81.14(249A) Sanctions.

81.14(1) Penalty for falsification of a resident assessment. An individual, who willfully and knowingly certifies a material and false statement in a resident assessment, is subject to a civil money penalty in accordance with 42 CFR 483.20(j) (as amended to August 1, 2024).

a.Factors determining the size of fine. In determining the monetary amount of the penalty, the director of the department of inspections, appeals, and licensing or the director’s designee may consider evidence of the circumstances surrounding the violation, including but not limited to the following factors:

(1)The number of assessments willingly and knowingly falsified.

(2)The history of the individual relative to previous assessment falsifications.

(3)The intent of the individual who falsifies an assessment or causes an assessment to be falsified.

(4)The areas of assessment falsified or caused to be falsified and the potential for harm to the resident.

(5)The relationship of the falsification of assessment to falsification of other records at the time of the visit.

b.Notification of a fine imposed for falsification of assessments or causing another individual to falsify an assessment shall be served upon the individual personally or by certified mail.

c.Appeals of fines. Notice of intent to formally contest the fine shall be given to the department of inspections, appeals, and licensing in writing and be postmarked within 20 working days after receipt of the notification of the fine. An administrative hearing will be conducted pursuant to Iowa Code chapter 17A and 481—Chapter 10. An individual who has exhausted all administrative remedies and is aggrieved by the final action of the department of inspections, appeals, and licensing may petition for judicial review in the manner provided by Iowa Code chapter 17A.

81.14(2) Use of independent assessors. If the department of inspections, appeals, and licensing determines that there has been a knowing and willful certification of false assessments, or the causation of knowing and willful false assessments, the department of inspections, appeals, and licensing may require that resident assessments be conducted and certified by individuals independent of the facility and who are approved by the state.

a.Criteria used to determine the need for independent assessors shall include:

(1)The involvement of facility management in the falsification of or causing resident assessments to be falsified.

(2)The facility’s response to the falsification of or causing resident assessments to be falsified.

(3)The method used to prepare facility staff to do resident assessments.

(4)The number of individuals involved in the falsification.

(5)The number of falsified resident assessments.

(6)The extent of harm to residents caused by the falsifications.

b.The department of inspections, appeals, and licensing will specify the length of time that these independent assessments will be conducted and when they will begin. This determination will be based on the extent of assessments and reassessments needed and the plan submitted by the facility to ensure falsifications will not occur in the future.

c.The individuals or agency chosen by the facility to conduct the independent assessments shall be approved by the department of inspections, appeals, and licensing before conducting any assessments. The approval will be based on the ability of the individual or agency to conduct resident assessments in accordance with the applicable rules. Any costs incurred shall be the responsibility of the facility.

d.Notice of the requirement to obtain independent assessments will be in writing and sent to the facility by certified mail or personal service. The notice shall include the date independent assessors are to begin assessments, information on how independent assessors are to be approved and the anticipated length of time independent assessors will be needed.

e.Criteria for removal of the requirement for independent assessors.

(1)Independent assessors shall be utilized until all residents assessed by the disciplines involved have been reassessed by the independent assessor.

(2)The facility shall submit a plan to the department of inspections, appeals, and licensing for completing its own assessments.

(3)The department of inspections, appeals, and licensing will evaluate the facility’s proposal for ensuring assessments will not be falsified in the future.

f.Appeal procedures.

(1)A written notice to appeal shall be postmarked or personally served to the department of inspections, appeals, and licensing within five working days after receipt of the notice requiring independent assessors.

(2)An evidentiary hearing shall be held pursuant to 481—Chapter 10 no later than 15 working days after receipt of the appeal.

(3)The written decision shall be rendered no later than ten working days after the hearing.

(4)The decision rendered is a proposed decision that may be appealed to the director of the department of inspections, appeals, and licensing pursuant to 481—Chapter 50.

(5)A notice of appeal stays the effective date of the requirement for independent assessments pending a final agency decision.

(6)Final agency action may be appealed pursuant to Iowa Code chapter 17A.

81.14(3) Penalty for notification of time or date of survey. Any individual who notifies, or causes to be notified, a nursing facility of the time or date on which a survey is scheduled to be conducted shall be subject to a fine not to exceed $2,000.

This rule is intended to implement Iowa Code section 249A.4.

441—81.15(249A) Out-of-state facilities. Payment will be made for care in out-of-state nursing facilities. For members enrolled with a managed care organization, authorization for admission must be obtained from the managed care organization prior to admission. Out-of-state facilities shall abide by the same policies as in-state facilities with the following exceptions:

81.15(1) Except for Medicare-certified hospital-based nursing facilities and special population nursing facilities, out-of-state providers shall be reimbursed at the same nursing facility rate they would receive from the Medicaid program in their state of residence or an amount equal to the sum of the Iowa non-state government owned nursing facility direct care rate component limit pursuant to subparagraph 81.5(16)“f”(1) plus the non-direct care rate limit pursuant to subparagraph 81.5(16)“f”(1), whichever is lower.

a.Medicare-certified hospital-based nursing facilities providing skilled care in other states shall be reimbursed at an amount equal to the sum of the Iowa Medicare-certified hospital-based nursing facility direct care rate component limit pursuant to subparagraph 81.5(16)“f”(3) plus the non-direct care rate component limit pursuant to subparagraph 81.5(16)“f”(3) if one of the following criteria is met:

(1)The placement is recommended because moving the resident back to Iowa would endanger the resident’s health, because services are not readily available in Iowa, or because the out-of-state placement is cost-effective.

(2)The placement is temporary until services are available to the resident in Iowa or until the program of treatment is completed.

b.Special population nursing facilities shall be reimbursed at the same nursing facility rate they would receive from Medicaid in their state of residence or, if not participating in the Medicaid program in their state, they shall be reimbursed pursuant to subparagraph 81.5(16)“e”(2), if one of the following criteria is met:

(1)The placement is recommended because moving the resident back to Iowa would endanger the resident’s health, because services are not readily available in Iowa, or because the out-of-state placement is cost-effective.

(2)The placement is temporary until services are available to the resident in Iowa or until the program of treatment is completed.

81.15(2) Out-of-state facilities shall not submit financial and statistical reports as required in rule 441—81.5(249A).

81.15(3) Payment for periods when residents are absent for visitation or hospitalization will be made to out-of-state facilities at zero percent of the rate paid to the facility by the Iowa Medicaid program.

This rule is intended to implement Iowa Code section 249A.4.

441—81.16(249A) Outpatient services. Medicaid outpatient services provided by certified skilled nursing facilities are defined in the same way as the Medicare program.

This rule is intended to implement Iowa Code section 249A.4 and 1991 Iowa Acts, chapter 267, section 132(1)“i.”

441—81.17(249A) Rates for Medicaid eligibles.

81.17(1) Maximum client participation. A nursing facility may not charge more client participation for Medicaid-eligible clients as determined in rule 441—75.16(249A) than the maximum monthly allowable payment for their facility as determined according to 441—subrule 79.1(9) or rule 441—81.5(249A). When the department makes a retroactive increase in the maximum daily rate, the nursing facility can charge the client the increased amount for the retroactive period.

81.17(2) Beginning date of payment. When a resident becomes eligible for Medicaid payments for facility care, the facility shall accept Medicaid rates effective when the resident’s Medicaid eligibility begins. A nursing facility is required to refund any payment received from a resident or family member for any period of time during which the resident is determined to be eligible for Medicaid.

Any refund owing shall be made no later than 15 days after the nursing facility first receives Medicaid payment for the resident for any period of time. Facilities may deduct the resident’s client participation for the month from a refund of the amount paid for a month of Medicaid eligibility.

The beginning and renewal date of eligibility and resident client participation amounts may be obtained through the Iowa Medicaid portal access (IMPA) system. When the beginning Medicaid eligibility date is a future month, the facility shall accept the Medicaid rate effective the first of that future month.

This rule is intended to implement Iowa Code section 249A.4.

441—81.18(249A) State-funded personal needs supplement. A Medicaid member living in a nursing facility who has countable income for purposes of rule 441—75.16(249A) of less than $50 per month shall receive a state-funded payment from the department for the difference between that countable income and $50 if the legislature has appropriated funding specifically for this purpose. This payment shall not be considered a benefit under Title XIX of the Social Security Act (as amended to August 1, 2024).

This rule is intended to implement Iowa Code section 249A.30A.

441—81.19(249A) Enforcement of compliance. Enforcement of compliance with this chapter shall occur in accordance with 42 CFR 488 (as amended to August 1, 2024).

441—81.20(249A) Appeal of a determination of noncompliance.

81.20(1) A facility may request a hearing on a determination of noncompliance leading to an enforcement remedy. The affected nursing facility, or its legal representative or other authorized official, shall file the request for hearing in writing to the department of inspections, appeals, and licensing within 60 days from receipt of the notice of the proposed denial, termination, or nonrenewal of participation, or imposition of a civil money penalty or other remedies.

a.A request for a hearing shall be made in writing to the department of inspections, appeals, and licensing within 60 days from receipt of the notice.

b.Hearings shall be conducted pursuant to 481—Chapter 10 and rule 481—50.6(10A), with an administrative law judge appointed as the presiding officer and with the department of inspections, appeals, and licensing as the final decision maker, with subject matter jurisdiction.

81.20(2) A facility may not appeal the choice of remedy, including the factors considered by the department of inspection, appeals, and licensing in selecting the remedy.

81.20(3) A facility may not challenge the level of noncompliance found by the department of inspections, appeals, and licensing, except that in the case of a civil money penalty, a facility may challenge the level of noncompliance found by the department of inspections, appeals, and licensing only if a successful challenge on this issue would affect the range of civil money penalty amounts that the department could collect.

81.20(4) Except when a civil remedy penalty is imposed, the imposition of a remedy shall not be stayed pending an appeal hearing.

441—81.21(249A) Civil money penalties—when penalty is collected. The collection of civil money penalties is made as provided in rule 441—81.24(249A).

441—81.22(249A) Civil money penalties—settlement authority. The department of inspections, appeals, and licensing has the authority to settle cases at any time before an evidentiary hearing.

441—81.23(249A) Civil money penalties—deduction of penalty from amount owed.

81.23(1) The amount of the penalty, when determined, may be deducted from any sum then or later owing by the department to the facility.

81.23(2) Interest of 10 percent per year is assessed on the unpaid balance of the penalty, beginning on the due date.

441—81.24(249A) Use of penalties collected by the department. Civil money penalties collected by the department will be applied to the protection of the health or property of residents of facilities that the department of inspections, appeals, and licensing finds deficient. Funds may be used for:

1.Time-limited expenses incurred in the process of relocating residents to home- and community-based settings or other facilities when a facility is closed or downsized pursuant to an agreement with the department;

2.Recovery of state costs related to the operation of a facility pending correction of deficiencies or closure;

3.Support and protection of residents of a facility that closes;

4.Funding of projects to improve the quality of life and quality of care of nursing facility residents through quality improvement initiative grants awarded pursuant to 441—Chapter 166;

5.Projects that support resident and family councils and other consumer involvement in ensuring quality care in facilities; and

6.Reasonable expenses incurred by the department to administer, monitor, or evaluate the effectiveness of grants utilizing civil money penalty funds.

These rules are intended to implement Iowa Code section 249A.4.

[Filed 4/25/25, effective 7/1/25]

[Published 5/14/25]

EDITOR’S NOTE: For replacement pages for IAC, see IAC Supplement 5/14/25.

Human Services Department

Official Document

  • Nursing facilities, ch 81
  • Published on 5/14/2025
  • 91 Views
  • Adopted and Filed

The official published PDF of this document is available from the Iowa General Assembly’s Administrative Rules page.

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View the Iowa Administrative Bulletin for 5/14/2025.

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Related Notices

Administrative Rule References

The following administrative rule references were added to this document. You may click a reference to view related notices.

Rule 441-1.8 Rule 441-36.6(2) Rule 441-75.16 Rule 441-78.1(2) Rule 441-78.10(2) Rule 441-78.10(2)"a" Rule 441-78.10(4)"b" Rule 441-78.13 Rule 441-78.37(1) Rule 441-78.37(15) Rule 441-78.37(2) Rule 441-78.37(6) Rule 441-78.37(8) Rule 441-78.41(14) Rule 441-79.1(2) Rule 441-79.1(9) Rule 441-79.9 Rule 441-79.9(1) Rule 441-79.9(2) Rule 441-80.4 Rule 441-81.1 Rule 441-81.10 Rule 441-81.10(5)"d" Rule 441-81.11 Rule 441-81.11(19)"e" Rule 441-81.12 Rule 441-81.12(1) Rule 441-81.12(14)"b" Rule 441-81.12(14)"c" Rule 441-81.12(19)"o" Rule 441-81.12(5) Rule 441-81.12(6)"c" Rule 441-81.12(9) Rule 441-81.13 Rule 441-81.13(3) Rule 441-81.14 Rule 441-81.14(1) Rule 441-81.14(2)"b" Rule 441-81.14(2)"f" Rule 441-81.14(3) Rule 441-81.14(4) Rule 441-81.15 Rule 441-81.16 Rule 441-81.17 Rule 441-81.18 Rule 441-81.19 Rule 441-81.2 Rule 441-81.2(1) Rule 441-81.2(1)"b" Rule 441-81.2(3) Rule 441-81.2(3)"a" Rule 441-81.2(3)"b" Rule 441-81.20 Rule 441-81.21 Rule 441-81.22 Rule 441-81.23 Rule 441-81.24 Rule 441-81.3 Rule 441-81.3(3) Rule 441-81.4 Rule 441-81.5 Rule 441-81.5(11) Rule 441-81.5(12) Rule 441-81.5(15) Rule 441-81.5(16) Rule 441-81.5(16)"a" Rule 441-81.5(16)"b" Rule 441-81.5(16)"c" Rule 441-81.5(16)"d" Rule 441-81.5(16)"e" Rule 441-81.5(16)"f" Rule 441-81.5(16)"g" Rule 441-81.5(18) Rule 441-81.5(19) Rule 441-81.5(2) Rule 441-81.5(21)"a" Rule 441-81.5(3)"e" Rule 441-81.5(7) Rule 441-81.6 Rule 441-81.6(11) Rule 441-81.6(11)"h" Rule 441-81.6(16)"e" Rule 441-81.7 Rule 441-81.7(1) Rule 441-81.8 Rule 441-81.8(3)"j" Rule 441-81.9 Rule 481-50.6

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