Quality Assurance Assessment Fee (QAAF) and NF Rate Increase for Iowa Medicaid Providers; Also Virtual Town Hall

Mary Madison, RN, RAC-CT, CDP
Clinical Consultant – Briggs Healthcare


DATE: February 17, 2023

TO: Iowa Medicaid-Enrolled Long-Term Services and Supports (LTSS), Nursing Facilities (NF), Skilled Nursing Facilities (SNF)

APPLIES TO: Managed Care (MC), Fee-for-Service (FFS)

FROM: Iowa Department of Health and Human Services (HHS), Iowa Medicaid RE: Quality Assurance Assessment Fee (QAAF) and NF Rate Increase

EFFECTIVE: April 1, 2023

HHS has proposed changes to the QAAF and the inflation factor currently used to calculate NF rates. These changes will be implemented with the April 1, 2023, rates. The changes to the QAAF are expected to generate additional funding for the NF rates. To remain budget-neutral to the state, HHS must inflate the base per diem rates. The total amount of add-on increases will be shared once all the calculations have been finalized. All proposed changes require the Centers for Medicare and Medicaid Services (CMS) approval. HHS will submit a state plan amendment, assessment fee model, and other supporting documentation to CMS demonstrating the proposed changes meet all applicable federal requirements for the changes in the assessment and the increase in base rate inflation.

Changes to the QAAF

Effective April 1, 2023, all NF and SNF providers, including non-state government-owned (NSGO) providers, will receive an increased add-on per day (currently $15.00). All NF and SNF providers, excluding NSGOs, will also have a change in the pass-through amounts added to rates and the amount remitted back to the state. Providers meeting one of the following criteria will receive the waiver pass-through amount:

• 46 or fewer beds, effective June 1, 2022                                                                                                                    • 19,000 or more annual Medicaid days, based on cost report information received on or before June 1, 2022                                                                                                                                                                      • Continuing care retirement community (CCRC) effective June 1, 2022

Pass-through amounts effective for the period beginning July 1, 2023, will be evaluated using the waiver class criteria available as of June 1, 2023. Any changes to a facility’s waiver class criteria that impact the pass-through amount will be communicated in the rate notification letter for July 1, 2023. Iowa Medicaid utilizes cost reports submitted by June 1 annually to obtain actual bed counts (46 or fewer beds) and Medicaid days. Iowa Medicaid uses information from the Iowa Insurance Division to identify CCRC facilities.

The QAAF payments for the quarter ending June 30, 2023, are due to HHS by July 31, 2023. If the correct amount is not paid, a penalty of 1.5 percent will be applied to the difference.

Changes to Base Rates

The per diem rates effective April 1, 2023, are based on cost reports submitted by NF for fiscal year ending during calendar year 2018. Estimated payments to NF cannot exceed amounts appropriated by the legislature. The inflation factor will be changed to ensure that the amounts estimated using 2018 cost information include amounts generated by the changes in the QAAF. Currently, costs are inflated from the mid-point of the cost report to January 1, 2019. The proposed inflation will increase base rates.

The next rebase is effective July 1, 2023. The appropriated amounts are being discussed in the current legislative session and HHS will issue additional information upon enactment.

HHS will host a virtual town hall to discuss the QAAF and rate changes on Tuesday, February 28, 2023, at 10:00 AM.  Click here to join the Zoom session.

If you have questions, please contact Iowa Medicaid Provider Services at 1-800-338-7909 or imeproviderservices@dhs.state.ia.us.