A comprehensive reform proposal for Idaho's Medicaid skilled nursing facility reimbursement program. Designed to be handed directly to legislators and the Idaho Department of Health & Welfare.
Prepared by Idaho Health Care Association (IHCA) — Robert Vande Merwe, Executive Director | August 2026
Target: 2027 Idaho Legislative Session
Idaho's average Medicaid SNF per diem of $258.78 covers only 63–70% of actual cost of care — a structural deficit of $111–$151 per resident per day. The state compounded this with rate cuts in September 2025 and July 2026, both timed to holiday weekends. Meanwhile, every neighboring state pays significantly more:
This proposal recommends six reforms. Net cost to Idaho's general fund: as low as $5.3 million/year — less than $3 per Idaho resident — because Idaho's 70.01% FMAP generates $2.33 in federal funds for every $1 the state invests.
Property rental rate formula (Idaho Code §56-108) uses a base of $9.24 per patient day — set in 1985 and never updated. An age-degradation factor reduces this by 2.5% per year: a 30-year-old facility gets just $2.31/day for property costs.
Case-mix system: Still uses RUG-III — which CMS abandoned for Medicare in 2019, seven years ago. No PDPM, no RUG-IV.
No mandatory rebasing. Rates drift from actual costs indefinitely.
Idaho's SNF Assessment Act (Title 56, Ch. 15) authorizes a provider assessment up to the 6% federal safe harbor. Idaho currently collects only ~3–4% — leaving approximately $45+ million in federal matching funds on the table every year.
Idaho's FMAP: 70.01% — higher than Oregon (61.77%), Washington (50%), North Dakota (54.23%), and Montana (65.99%). Idaho gets MORE federal match per dollar than all its neighbors.
September 2025: Rate cut announced over Labor Day weekend — legislature not in session.
July 2026: Additional cut effective over July 4th weekend — again during recess.
Combined impact: ~$15–20 million annual reduction from pre-cut baseline. No access impact study was conducted. No public comment period. No legislative review.
This pattern may violate 42 USC §1396a(a)(30)(A) — the federal equal access provision requiring rates "sufficient to enlist enough providers."
CNA vacancy rates: 15–25% statewide
CNA starting wages in NFs: $14–17/hour
Walmart/Amazon in Idaho: $15–19/hour
Annual CNA turnover: 50–80%
You cannot staff a nursing home when the facility across the street pays more to stock shelves. This is a reimbursement problem, not a labor market problem.
Each reform includes the specific Idaho Code sections to amend, the model state program to reference, and the contact office at the model state for verification.
Replace the outdated cost-based/RUG-III methodology with a four-component rate:
Total target rate: $290–350/day (still 40% below Oregon and North Dakota)
Mandatory annual rebasing using cost reports no older than 24 months.
Idaho's SNF Assessment Act (Ch. 15) already authorizes up to 6%. Current collection is ~3–4%. Increase to 5.5% (0.5% buffer below safe harbor).
| Total NF net patient revenue (est.) | $518 million |
| Current assessment (~3.9%) | $20 million |
| New assessment at 5.5% | $28.5 million |
| Federal match at 70.01% FMAP | $66.5 million |
| Total program value | $95.0 million |
| Net new federal funds | $19.8 million |
Fund allocation: 60% rate floor support ($17.1M) | 25% quality incentives ($7.1M) | 15% workforce development ($4.3M)
Transform Idaho's existing NFQPP into a meaningful quality incentive with transparent, measurable criteria:
Payment tiers: Platinum (85–100 pts) = $25–30/day | Gold (70–84) = $18–24 | Silver (55–69) = $10–17 | Bronze (40–54) = $5–9 | Below 40 = $0
Definition: The Medicaid per diem shall not be less than 90% of documented cost of care (audited cost report, inflation-adjusted to rate date).
Absolute minimum: $240/day (93% of current avg), adjusted annually by CPI-Medical.
Rate cut protections:
15% of enhanced assessment ($4.3M state) + federal match = $14.3M total annual fund.
Mandatory annual calendar:
Establish Nursing Facility Rate Advisory Committee — NF operators, direct care workers, resident advocates, IHCA, LeadingAge Idaho, DHW, rural NF representative. Quarterly meetings, published recommendations.
Idaho's 70.01% FMAP = $2.33 federal for every $1 state. This is the most efficient healthcare investment Idaho can make.
| Metric | Moderate (+20%) | Robust (+33%) | Full Parity |
|---|---|---|---|
| Target avg rate | $310/day | $345/day | $390/day (WA level) |
| Total spending increase | $45.9M | $77.2M | $117.5M |
| State GF share of increase | $13.8M | $23.1M | $35.2M |
| Provider assessment offset | −$8.5M | −$8.5M | −$8.5M |
| Net state GF cost | $5.3M | $14.6M | $26.7M |
| Per Idaho resident/year | $2.80 | $7.70 | $14.00 |
| Federal funds generated | $32.1M | $54.1M | $82.3M |
The Moderate scenario costs Idaho's general fund $5.3 million per year — and generates $32.1 million in new federal funds.
Introduce Idaho NF Sustainability & Quality Act. Enact assessment enhancement + rate floor + process reforms. Emergency rate stabilization: restore pre-September 2025 rates. Appropriate $2M for actuarial contract + IT.
Contract actuarial firm (Myers & Stauffer/Milliman) for PDPM calibration study. Establish Rate Advisory Committee. Workforce Fund operational — first CNA cohort funded. Quarterly assessment collection begins.
50/50 blend: half new PDPM methodology + half legacy cost-based (Indiana model). Quality Scorecard dry run — scoring with education, no payment impact. Monitor distributional impacts.
Full PDPM component rates. Rate enhancement above budget-neutral (20–33% increase). Quality bonuses active ($15–30/day). Workforce Fund at full operation. Rate floor enforced.
Annual rebasing. Quality Scorecard refinement. JFAC annual rate adequacy report. Biannual PDPM calibration review. Ongoing neighboring-state comparison.
Every reform in this proposal is modeled on a real program in a real state. Here are the contacts.
| Section | Current | Proposed Change |
|---|---|---|
| §56-101 | RUG-III definitions | Add PDPM, component rate, GAWI, rate floor definitions |
| §56-108 | $9.24 property base (1985) | Repeal. Replace with §56-108A component methodology |
| New §56-108A | — | Four-component PDPM rate methodology |
| New §56-108B | — | Mandatory annual rebasing requirement |
| New §56-108C | — | Rate floor at 90% of cost + cut protections |
| §56-1504(3) | Assessment fund uses (VBP) | Add workforce fund, set allocation percentages |
| §56-1505(2) | Assessment rate (uncapped below 6%) | Specify minimum 5.5% of net patient revenue |
| §56-1505(3) | Annual collection | Quarterly collection |
| Ch. 22 | SPA legislative approval | Add JFAC review for rate cuts >2% |
Bureau of Long Term Care: Chris.Barrott@dhw.idaho.gov
Regional offices: Region I (208-769-1567), Region II (208-334-0940), Region III (208-455-7150), Region IV (208-334-0940), Region V (208-736-3024), Region VI (208-239-6260), Region VII (208-528-5750)
Idaho's 70+ nursing facilities employ 8,000+ workers and serve 4,500+ Medicaid residents daily. This is critical healthcare infrastructure that cannot be replaced once lost.
For $5.3 million in state general fund — less than $3 per Idaho resident per year — we can generate $32 million in federal funds, stabilize every nursing home in the state, and build the best Medicaid SNF program in the Mountain West.
Every dollar Idaho invests generates $2.33 from the federal government. No other investment in Idaho has that return.
Prepared by Idaho Health Care Association (IHCA) | August 2026 | All data cited with primary sources
Contact: Robert Vande Merwe, Executive Director • Luke Malek, Policy Director • (208) 343-9735