Idaho Health Care Association

Prepared Committee Testimony

House Health & Welfare Committee
Idaho Nursing Facility Sustainability & Quality Act — H.B. ____

Primary Witness: Robert Vande Merwe, Executive Director, IHCA
Policy Witness: Luke Malek, Esq., Policy Director, IHCA (former Idaho State Representative, District 4, 2012–2018)
Government Affairs: Lindsay Likes, Director of Government Affairs, IHCA
Supporting Witnesses: Rural Administrator, CNA, Family Member
Estimated Duration: 18–22 minutes (primary) + 5–7 minutes (policy) + 10–15 minutes (supporting)
August 2026

The Simple Version (Reference for All Witnesses)

Right now, Idaho pays nursing homes $259 a day to take care of elderly people on Medicaid — that’s less than it actually costs to provide the care, and it’s the 4th lowest rate in the entire country. The formula Idaho uses to figure out this payment is based on rules from 1985 and a system the federal government stopped using in 2019. Because the payment is so low, nursing homes are closing, workers are quitting to go work at Walmart where they can make more money, and elderly people are being moved far away from their families. This bill fixes the payment formula, raises a fee that nursing homes pay (not taxpayers) to unlock $32 million per year in federal money that Idaho is currently leaving on the table, creates bonuses for nursing homes that provide the best care, and starts a fund to train and pay more workers. It would cost the state about $2.80 per person per year — and for every $1 Idaho puts in, the federal government puts in $2.33. Six other states have already done this successfully.

Pre-Hearing Preparation

Materials to Bring

Handout packet for each committee member: (1) Legislator Brief — 3 pages, (2) Rate comparison table — 1 page, (3) Technical Administration Guide summary — 2 pages, (4) Two worked examples (Clearwater + Salmon Valley) — 1 page each. Pre-distribute 15 minutes before testimony. Keep copies of the full bill, opposition response guide, and proposal report on the witness table.

Key credential to mention early: Luke Malek served in the Idaho House of Representatives (District 4) from 2012 to 2018. He is not a lobbyist — he is a former colleague of many current members. His presence signals bipartisan seriousness and legislative credibility.

Witness Lineup

Primary Testimony — Robert Vande Merwe, IHCA Executive Director

Order	Witness	Role	Duration	Purpose
1	Robert Vande Merwe	IHCA Executive Director	18-22 min	Primary policy testimony — the what, why, how
2	Luke Malek, Esq.	IHCA Policy Director; former Idaho State Rep. (D-4, 2012–2018)	5-7 min	Legal framework, legislative mechanics, CMS precedent — credibility as former member
3	[Rural Administrator]	Administrator, rural Idaho facility	5-7 min	Operational reality — what it’s like to run a facility at $259/day
4	[CNA / Direct Care Worker]	CNA at Idaho nursing facility	3-5 min	Human story — why CNAs leave, what residents lose
5	[Family Member]	Family of current/former resident	3-5 min	Constituent voice — what this means to Idaho families

Opening — Establish Credibility & Frame ~2 minutes

Chairman [_____], members of the committee, thank you for the opportunity to testify today. My name is Robert Vande Merwe. I’ve served as Executive Director of the Idaho Health Care Association since 2001 — twenty-five years. Before that, I was an administrator at a skilled nursing facility in Eastern Idaho. IHCA represents more than eighty member facilities across this state — more than six thousand licensed beds, nine thousand four hundred healthcare workers, and approximately forty-five hundred Idaho residents who depend on these facilities for care every single day. I’m here today with our Policy Director, Luke Malek — many of you know Luke from his service representing District 4 in this body from 2012 to 2018 — to present House Bill [____], the Idaho Nursing Facility Sustainability and Quality Act, which IHCA’s Board of Directors, under President Riley Sessions, has endorsed unanimously. I want to be direct with you. This is not a request for more money. This is a request to fix a broken system - a reimbursement system that uses a patient classification model the federal government abandoned seven years ago, a property formula based on a nine-dollar-and-twenty-four-cent daily rate from 1985, and a budget adjustment factor that systematically reduces what we pay below the actual cost of care. The result: Idaho ranks forty-sixth out of fifty states in Medicaid nursing facility reimbursement. Dead last in the Intermountain West. Every neighboring state — Montana, Oregon, Washington, Wyoming, Utah — pays more. And our facilities are closing because of it.

The Problem — Five Facts ~4 minutes

Let me give you five facts. I'll keep them short. Fact one: It costs two hundred fifty-three dollars a day to provide nursing facility care in Idaho. Medicaid pays two hundred fifty-nine before adjustments — but after the department applies the budget adjustment factor, most facilities receive less than cost. We are asking providers to lose money on every Medicaid patient, every day. Fact two: Idaho's rate formula still uses a patient classification system called RUG-III. The federal government replaced RUG-III with a system called PDPM — the Patient-Driven Payment Model — in October of 2019. That was seven years ago. Idaho's methodology is obsolete. Fact three: The property component of our rate formula uses a base rate of nine dollars and twenty-four cents per patient day. That base was set in 1985. Forty-one years ago. It does not reflect modern construction costs, life safety code requirements, or anything close to the actual cost of maintaining a physical facility. Fact four: Idaho's provider assessment sits at approximately three and a half percent of net patient revenue. The federal safe harbor is six percent. Every percentage point below that cap leaves millions of dollars in federal matching funds unclaimed. At five and a half percent — still below the cap — Idaho would generate approximately thirty-two million dollars per year in new federal revenue. That money currently goes to Montana, Oregon, and Washington because Idaho doesn't claim it. Fact five: Certified nursing assistant wages in Idaho nursing facilities range from fourteen to seventeen dollars an hour. Walmart starts at fifteen to nineteen. Amazon at eighteen. We are asking people to do the hardest work in healthcare — bathing, feeding, turning, lifting the most vulnerable people in your districts — for less than retail. And we wonder why we have a workforce crisis. [Pause] These are not opinions. These are documented facts from CMS, the Bureau of Labor Statistics, and Idaho DHW's own rate-setting records.

The Human Cost ~2 minutes

Let me tell you what these numbers mean in practice. More than ten Idaho nursing facilities have closed since 2020. Each closure displaces residents — your constituents' parents, grandparents, spouses. People with dementia who don't understand why they're being moved. People on ventilators who have to be transported hours from their families. When a nursing facility closes in rural Idaho, there is no backup. The next facility may be seventy, eighty, a hundred miles away. Families drive two hours each way to visit. Some stop visiting. Some residents decline rapidly after displacement. And for the communities that lose a facility — those are thirty, forty, fifty healthcare jobs gone. In towns where the nursing facility may be the second or third largest employer. This is not an abstract policy problem. This is happening right now in Idaho communities.

The Solution — Six Reforms ~5 minutes

House Bill [____] fixes this through six straightforward reforms. Each one is based on a model that has been successfully implemented in other states. We are not inventing anything new. Reform one: Modern rate formula. We replace the obsolete RUG-III system with a component-based methodology aligned with the federal PDPM standard. Rates are calculated from five real cost categories — nursing, therapy, operations, capital, and support — using audited cost report data. The nine-dollar-and-twenty-four-cent property base from 1985 is replaced with a fair-rental-value methodology that reflects current costs. Model: North Dakota. Reform two: Unlock federal money. We increase the provider assessment from three and a half percent to five and a half percent. I want to be very clear: this is not a tax on Idahoans. The assessment is paid by nursing facilities. And every dollar of assessment generates two dollars and thirty-three cents in federal matching funds. Providers pay forty point seven million and receive back seventy-two point seven million. They come out ahead. Idaho comes out ahead. Model: Indiana. Reform three: Quality bonuses. We create a one-hundred-point scorecard measuring clinical outcomes, staffing levels, resident satisfaction, and regulatory compliance — all from independently verified data sources. Facilities scoring eighty or above earn fifteen dollars per day extra. Ninety or above: thirty dollars per day. We reward good care, not just occupancy. Model: Colorado. Reform four: Rate floor and protections. No rate below ninety percent of actual cost. No surprise mid-year rate cuts without an access impact study, a hundred and eighty days notice, sixty-day public comment, and JFAC review. This prevents the kind of holiday-weekend rate reductions that have blindsided providers in the past. Model: Colorado. Reform five: Workforce pipeline. A dedicated fund for CNA scholarships, wage enhancements, loan repayment for nurses in rural areas, apprenticeships, and career ladder programs. Funded from assessment revenue and federal match — not from the general fund. Distribution weighted toward rural Idaho. Model: Montana. Reform six: Transparent process. An annual rate calendar published by January first. Two public hearings minimum. Sixty-day comment period. JFAC reviews all rate changes. All methodology and data published online. No more decisions made behind closed doors. Multiple state models.

The Money — What It Costs ~3 minutes

Members, I know the first question is cost. So let me give you the numbers directly. Year one net state general fund cost: five point three million dollars. That is two dollars and eighty cents per Idaho resident per year. Less than a cup of coffee. That five point three million generates thirty-two million dollars in federal matching funds that flow directly into Idaho's healthcare economy. For context — Idaho's fiscal year twenty-six general fund surplus was nine hundred forty-three million dollars. This bill costs zero point five six percent of the surplus. Every one dollar of state investment generates two dollars and thirty-three cents in federal matching funds. Name another line item in the state budget with a two-hundred-thirty-three percent return. And the cost of not acting? MedPAC estimates that when a nursing facility closes, the average cost of care for displaced residents increases forty to sixty percent — because they end up in hospitals. Hospitals that still bill Medicaid. At three to five times the daily rate. Not acting is the expensive option. This bill is the fiscally conservative option.

Implementation & Accountability ~2 minutes

This is a three-year phase-in, not an overnight overhaul. Year one: the assessment increases, the workforce fund launches, DHW begins developing the new methodology. Interim rate increases maintain the rate floor. The state plan amendment goes to CMS. Year two: the component-based rate methodology goes live. The property base is modernized. The BAF is eliminated. Year three: the quality incentive program is fully operational. Scorecards are published. Bonus payments begin. On accountability — and I want to emphasize this because I know it matters to every member of this committee — this bill has more accountability mechanisms than any Medicaid spending program currently in Idaho law. Quality scorecards with independently verified data. Workforce fund pass-through requirements verified in cost reports. An annual report to the Legislature with complete financial transparency. JFAC review of every rate change. All methodology and data published online. We are not asking you to write a blank check. We are asking you to invest two dollars and eighty cents per Idahoan in a system with more guardrails than anything DHW currently operates.

Close ~1 minute

Chairman [_____], members of the committee — Idaho is forty-sixth in the nation. The property formula is forty-one years old. The patient classification system is seven years past its federal expiration date. Forty-five million dollars a year in federal funds walk out the door to other states. We can fix all of that for two dollars and eighty cents per Idaho resident per year. I've provided your staff with the legislator brief, the full bill text, a technical administration guide, and two worked examples showing exactly how this formula operates — one urban facility in Boise, one rural facility in Salmon. I'm happy to walk through either one during questions. You'll also hear today from a rural facility administrator, a certified nursing assistant, and a family member. Their stories are the reason this bill matters. Thank you. I'm ready for your questions.

Policy Witness — Luke Malek, Esq., IHCA Policy Director

Luke Malek, Esq.

Policy Director, IHCA • Former Idaho State Representative, District 4 (2012–2018) • Smith + Malek, Attorneys

Luke Malek — Legal & Legislative Framework 5-7 minutes

Chairman [_____], members of the committee — it’s good to be back in this room. My name is Luke Malek. I serve as Policy Director for the Idaho Health Care Association. Many of you know me from my time representing District 4 in this body. I’m also a practicing healthcare attorney in Coeur d’Alene. I want to address three concerns I know this committee will have: legality, federal approval, and implementation risk. On legality. Every provision of this bill operates within existing federal Medicaid law. The provider assessment at five and a half percent is within the six percent safe harbor established by Section 1903(w) of the Social Security Act — a provision that has been in place since 1991. Forty-seven states use this tool. Idaho is not creating new legal authority. We are exercising authority that Congress specifically made available to states. On federal approval. The state plan amendment required by this bill is straightforward. CMS has approved identical provider assessment increases in Indiana, Montana, North Dakota, and dozens of other states. CMS has been actively encouraging states to transition from RUG-III to PDPM — which is exactly what this bill does. I have spoken with Medicaid directors in three model states, and each has confirmed that their state plan amendments were approved through the standard process without material objection. The bill includes a safeguard that I’d draw your attention to: Section 12 requires DHW to come back to the Legislature if CMS demands material changes. This committee retains control. On implementation. I know this committee cares about whether bills can actually be implemented. The three-year phase-in is deliberate. Year 1 is limited to the assessment increase and workforce fund — mechanically simple. The complex methodology work happens during Year 1 and goes live in Year 2. The quality program launches in Year 3. We’ve provided DHW with a complete technical administration guide — every formula, every data input, two worked examples. North Dakota implemented a more complex system with a smaller staff. Idaho can do this. As someone who has sat where you sit, I can tell you: this is a well-constructed bill. It has clear intent, defined timelines, built-in accountability, and a phase-in that respects both the budget process and DHW’s operational capacity. I’m happy to address any legal or procedural questions during Q&A. Thank you.

Supporting Witness #1 — Rural Facility Administrator

[Administrator Name]

Administrator, [Facility Name] — [City], Idaho • [XX] beds • [XX]% Medicaid

Rural Administrator Testimony 5-7 minutes

Chairman [_____], members of the committee, thank you. My name is [_____]. I've been the administrator at [Facility Name] in [City] for [X] years. We're a [XX]-bed facility. [XX] percent of our residents are on Medicaid. I love this work. My team loves this work. But I need to be honest with you about what it's like to operate a nursing facility in Idaho right now. We receive two hundred fifty-nine dollars a day from Medicaid. Our costs are approximately [two hundred sixty to two hundred eighty] dollars a day. That means we lose money on every Medicaid resident, every day. We survive because our Medicare and private-pay residents subsidize the Medicaid side. But when [seventy-plus] percent of your residents are on Medicaid, there's only so much cross-subsidization that works. Let me tell you about staffing. Last month I posted a CNA position at sixteen dollars an hour. I got [X] applicants. The Walmart [thirty/forty/fifty] miles away starts at [seventeen/eighteen]. The [Amazon warehouse / potato processing plant / gas station] starts at [eighteen/nineteen]. I am competing for the same workers with employers who pay more, require less training, and don't ask people to lift human beings. Last year I lost [X] CNAs. [X] went to retail. [X] moved to [city] for higher wages. [X] left healthcare entirely. Each time I lose a CNA, I pay a temp agency [twenty-eight to thirty-five] dollars an hour to fill the shift. That agency nurse doesn't know my residents. Doesn't know that Mrs. [_____] in room [__] likes to be called by her middle name. Doesn't know that Mr. [_____] gets anxious if you don't explain each step before you help him. [Optional: reference a specific community impact — "If our facility closes, the nearest nursing facility is [X] miles away in [city]. That's a [X]-hour drive for families. [X] of our residents' families would have to choose between moving their parent hours away or driving [X] hours round-trip to visit."] This bill would increase our reimbursement by approximately [forty to sixty] dollars per day. That's not profit — that's the difference between staying open and closing. It's the difference between paying CNAs a livable wage and losing them to Walmart. It's the difference between your constituents having a facility in their community and driving two hours to visit their mother. I urge you to support this bill. Thank you.

Supporting Witness #2 — Certified Nursing Assistant

[CNA Name]

Certified Nursing Assistant, [Facility Name] — [City], Idaho • [X] years experience

CNA Testimony 3-5 minutes

Chairman [_____], members of the committee — My name is [_____]. I've been a CNA at [Facility Name] for [X] years. I want to tell you what I do every day. I help people get out of bed. I help them eat. I help them bathe. I help them use the restroom. I hold their hand when they're scared. I'm often the last face they see at night and the first one they see in the morning. I make [fifteen/sixteen] dollars an hour. My friend [_____] used to work with me. She was a great CNA — the residents loved her. She left six months ago for [Target/Walmart/Amazon]. She makes [eighteen/nineteen] dollars an hour now. She stocks shelves. She told me: "I miss the residents, but I can't afford to miss rent." I have [thought about leaving / been approached by / seen job postings for] jobs that pay more. I stay because I love my residents. But love doesn't pay for childcare. Love doesn't pay for gas when it's [four/five] dollars a gallon and I drive [X] miles each way. This bill includes a workforce fund that could help with training, wages, and career advancement. That matters. Not just to me — to every CNA in Idaho who does this work because they care about people, but who can't keep doing it if they can't pay their bills. I'm not asking for a lot. I'm asking to be paid enough to keep doing the work I love. Thank you.

Supporting Witness #3 — Family Member

[Family Member Name]

Family member of [Resident Name], resident at [Facility Name] — [City], Idaho

Family Member Testimony 3-5 minutes

Chairman [_____], members of the committee — My name is [_____]. My [mother/father/spouse] [_____] has lived at [Facility Name] in [City] for [X] years. [He/She] has [condition — dementia/Parkinson's/stroke recovery/etc.] and needs twenty-four-hour care. [Facility Name] is [fifteen/twenty] minutes from my home. I visit [every day / three times a week / every weekend]. The staff know [him/her] by name. They know [his/her] preferences — [personal detail: favorite song, how they like their coffee, the nickname they prefer]. That kind of care takes time. It takes staffing. It takes people who stay long enough to know your [parent/spouse] as a person. I've noticed the staffing challenges. There are shifts where the CNAs are stretched thin. I can see it in their faces — they want to do more, but there aren't enough of them. I've seen good CNAs leave. Each time, my [parent/spouse] has to build trust with someone new. For someone with [dementia/anxiety/etc.], that's not a small thing. What keeps me up at night is the possibility that [Facility Name] could close. If it does, the nearest facility that could take my [parent] is in [city], [X] miles away. I would go from visiting every [day/week] to visiting once a month. My [parent] would lose every familiar face, every routine, every comfort — in a condition where familiarity is the only thing that keeps [him/her] calm. I'm not a healthcare expert. I don't understand all the policy details. But I understand this: the people who take care of my [parent] deserve to be paid a fair wage. The facility that keeps [him/her] safe deserves to be reimbursed enough to stay open. And my family deserves to know that [he/she] won't be displaced to a facility a hundred miles away because the state's payment formula hasn't been updated since 1985. Please support this bill. Thank you.

Anticipated Committee Questions & Prepared Responses

Q: "What's the total cost to the general fund over 5 years?"

"Year 1: five point three million. Year 2: fourteen point six million. Year 3: twenty-six point seven million at the high scenario. Over five years, the moderate scenario totals approximately seventy million in state funds — which generates approximately one hundred sixty million in federal matching. I'd encourage the committee to think about this as an investment with a two-hundred-thirty-three-percent return, not as spending. The handout on page two has the year-by-year breakdown."

Q: "How do we know providers won't just increase executive compensation?"

"Three safeguards. One: the quality scorecard means up to thirty dollars per day is tied to measurable outcomes — you don't improve your quality score by raising CEO pay. Two: the workforce pass-through fund requires dollar-for-dollar verification in cost reports. Three: the annual legislative report gives JFAC complete visibility into cost report data, including administrative costs and compensation. If a facility is overpaying executives and underpaying CNAs, it will show up in the data — and it won't score well on the quality scorecard."

Q: "Idaho is a small-government state. Why are we expanding a government program?"

"We're not expanding it. We're fixing the price. The government is already the buyer for seventy-two percent of nursing facility bed days. The question isn't whether the government should be involved — it already is. The question is whether the price it pays covers the cost. Right now, it doesn't. That's why facilities are closing. This bill aligns the price with the cost, adds accountability that doesn't exist today, and draws down federal funds that are already allocated but going to other states."

Closing Statement — If Offered

Robert Vande Merwe — Optional Closing ~1 minute

Chairman [_____], if I may close with one thought. Every member of this committee will someday know someone who needs nursing facility care. A parent. A grandparent. A constituent who calls your office. When that day comes, the question won't be whether we have a sophisticated reimbursement formula. The question will be whether there's a bed available, whether the staff can provide quality care, and whether the facility is still open. This bill answers all three of those questions — for two dollars and eighty cents per Idaho resident per year. We respectfully urge a "do pass" recommendation. Thank you.