$259
Idaho Medicaid
Rate/Day
10+
Facilities
Closed Since '20
In Plain English
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.
The Problem
Idaho's Medicaid nursing facility reimbursement system uses a patient classification model abandoned by CMS in 2019 and a property base rate from 1985 ($9.24/day). After application of the budget adjustment factor, Medicaid pays less than the cost of care. Idaho ranks 46th nationally — lowest in the Intermountain West. Every neighboring state (MT $314, OR $322, WA $356) pays more. Result: 10+ facility closures since 2020, severe CNA workforce crisis (wages $14-17/hr vs. Walmart $15-19/hr), and $45M+/year in unclaimed federal matching funds.
The Solution — Six Reforms
1. Modern Rate Formula
Replace obsolete RUG-III with 5-component PDPM-aligned methodology. Eliminate $9.24 property base and BAF. Model: North Dakota
2. Unlock Federal Funds
Provider assessment from ~3.5% → 5.5% (below 6% federal safe harbor). Not a tax on Idahoans — facilities pay, get back more through federal match. Model: Indiana
3. Quality Incentives
100-point scorecard: clinical outcomes, staffing, satisfaction, compliance. Score 80+ = $15/day bonus. 90+ = $30/day. Model: Colorado
4. Rate Floor + Protections
No rate below 90% of cost. No mid-year cuts without access study, 180-day notice, public comment, and JFAC review. Model: Colorado
5. Workforce Pipeline
Dedicated fund: CNA scholarships, wage pass-throughs, nurse loan repayment, rural weighting. Funded by assessment + federal match. Model: Montana
6. Transparency
Annual rate calendar, 2 public hearings, 60-day comment, JFAC reviews all changes, all data published online. Multiple states
Fiscal Impact — Best ROI in the State Budget
Federal Return on State Investment
$2.33 federal per $1 state
233% return — leverages Idaho's ~70% FMAP | Year 1 net state cost: $5.3M = $2.80 per Idaho resident
| Metric | FY 2028 (Year 1) | FY 2029 (Year 2) | FY 2030 (Year 3) |
|---|
| Provider Assessment Revenue | $40.7M | $41.5M | $42.3M |
| Federal Match Generated | $32.0M | $54.0M | $82.0M |
| Net State General Fund | $5.3M | $14.6M | $26.7M |
| Cost Per Idaho Resident/Year | $2.80 | $7.68 | $14.05 |
| Jobs Supported/Preserved | ~500 | ~1,200 | ~2,000 |
Context: FY26 general fund surplus: $943M. Year 1 cost = 0.56% of surplus. Year 1 alone prevents an estimated $45M+ in federal funds from going to other states.
Alignment with Governor's Priorities
💼
Jobs & Economy
Preserves 9,400+ healthcare jobs. Creates ~2,000 new positions. Strongest impact in rural Idaho where nursing facilities are major employers.
💰
Fiscal Responsibility
233% federal ROI. Prevents costlier hospital placements. Assessment is not a taxpayer cost. More accountability than current system.
🏔️
Rural Idaho
5% rural rate adjustment. Workforce fund weighted to shortage areas. Rate floor protects small facilities. Prevents rural closures.
⭐
Quality & Accountability
100-point quality scorecard. Outcome-based bonuses. All data externally verified. Annual legislative reporting. JFAC oversight.
🏥
Healthcare Access
Rate floor prevents closures. Hold-harmless during transition. No resident displacement. Access maintained statewide.
🎓
Workforce Development
CNA scholarships. Nurse loan repayment. Apprenticeships. Career ladder CNA→LPN→RN. Funded by assessment, not general fund.
Implementation — 3-Year Phase-In (No Overnight Disruption)
Year 1 (FY 2028)
- Assessment increases to 5.5%
- Workforce fund launches
- State plan amendment submitted to CMS
- DHW develops new methodology
- Interim rate increases to maintain rate floor
- Hold-harmless: no facility gets a rate cut
Years 2-3 (FY 2029-30)
- Component-based rates go live (Year 2)
- Property base modernized, BAF eliminated
- Quality scorecard published (Year 3)
- Quality incentive payments begin
- Annual rate calendar and hearings
- Full JFAC reporting cycle established
Political Landscape
✅ Supporting Forces
- IHCA — 80+ facilities, unanimous board endorsement
- AHCA — National affiliate, technical support
- AARP Idaho — Likely support (resident access)
- Idaho Hospital Association — Likely support (reduces ED boarding)
- Rural legislators — Facility closures disproportionately affect rural districts
- Community organizations — Facility = major employer in small towns
- CMS — Has encouraged states to move from RUG-III to PDPM
⚠️ Potential Opposition
- Idaho Freedom Foundation — "government spending" framing (rebuttal: not a tax, 233% ROI)
- Fiscal hawks on JFAC — Cost concern (rebuttal: $2.80/resident, 0.56% of surplus)
- DHW — Implementation complexity (rebuttal: 3-year phase-in, complete tech guide, 6 states did it)
- HCBS advocates — Competing priorities (rebuttal: different funding stream, different population)
- Anti-tax caucus — Assessment = "tax" framing (rebuttal: 47 states, providers pay, net positive return)
Talking Points for the Governor
If asked "Why should Idaho do this?":
"Idaho is 46th in the nation. Our nursing facility rate formula uses a property base from 1985 and a patient classification system the federal government abandoned 7 years ago. We're leaving $45 million a year in federal funds on the table while facilities close and CNAs leave for Walmart. This bill fixes the formula, unlocks federal revenue, and adds more accountability than any Medicaid program in state law — for $2.80 per Idaho resident."
If asked "What's the cost?":
"$5.3 million net state cost in Year 1 — less than 1% of our $943 million surplus. That $5.3 million generates $32 million in federal funds. Every dollar we invest returns $2.33 from Washington. There's no better ROI in the state budget."
If asked "Is this a tax increase?":
"No. Zero taxpayer dollars. The provider assessment is paid by nursing facilities and returned to them — plus $2.33 in federal matching — through higher reimbursement rates. 47 states use this mechanism. We're catching up, not breaking new ground."
What the Governor's Office Needs to Know
| Item | Status |
|---|
| Bill text | Complete draft — 18 sections, ready for Legislative Services review |
| Fiscal note | Complete — 3-year breakdown included in bill |
| Technical guide | Complete — 14-step algorithm, 2 worked examples, quality rubric |
| Legislator brief | Complete — 3-page plain-language handout |
| Opposition analysis | Complete — 15 objections with data-backed rebuttals |
| Committee testimony | Prepared — 4 witnesses (IHCA, rural admin, CNA, family member) |
| IHCA endorsement | Unanimous board resolution |
| State plan amendment | Outline complete — standard CMS process, 47 state precedents |
| Model state contacts | Available — ND, CO, IN, MT, OR, WA program directors with phone numbers |
Ask
IHCA respectfully requests:
- Governor's support for the Idaho Nursing Facility Sustainability & Quality Act during the 2027 session
- Direction to DHW to cooperate with methodology development and state plan amendment preparation during the pre-session period
- Budget inclusion of the implementation appropriation in the Governor's FY 2028 budget recommendation
Contact:
Robert Vande Merwe, Executive Director • Luke Malek, Policy Director
Lindsay Likes, Director of Government Affairs, Engagement & Partnerships
Idaho Health Care Association • 13945 W. Wainwright Drive, Suite 101, Boise, ID 83713 • (208) 343-9735
Materials: Complete bill, proposal, technical guide, and supporting documents available at medicaid-panel-study.vercel.app