IDAHO HEALTH CARE ASSOCIATION
Robert Vande Merwe, Executive Director • Riley Sessions, President • Endorsed by IHCA Board of Directors
Representing 80+ member facilities, 6,200+ licensed beds, 9,400+ healthcare workers, and 4,500+ residents across Idaho
13945 W. Wainwright Drive, Suite 101, Boise, ID 83713 • (208) 343-9735
$259
Idaho Medicaid
Rate/Day
$2.33
Federal $$
Per $1 State
The Simple Version
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.
Why This Bill Exists
Idaho's nursing facilities are in a slow-motion crisis. The Medicaid reimbursement system — the primary revenue source for 72% of nursing facility bed days — is built on formulas that are decades out of date and systematically underpay the actual cost of caring for Idaho's most vulnerable residents.
The core problem: It costs $253/day to provide nursing facility care in Idaho. Medicaid pays $259/day before adjustments — but after the state applies the Budget Adjustment Factor (BAF), most facilities receive less than what it actually costs. Idaho ranks 46th out of 50 states in Medicaid nursing facility reimbursement. Every neighboring state pays more.
Five Facts Every Legislator Should Know
- The property formula uses a $9.24/day base from 1985. That's 41 years old. It doesn't reflect modern construction costs, equipment needs, or building code requirements.
- Idaho still uses a patient classification system (RUG-III) that the federal government abandoned in 2019. CMS replaced it with PDPM seven years ago. Idaho's methodology is obsolete.
- The provider assessment is at ~3.5%. The federal cap is 6%. Every percentage point below the cap leaves millions in federal matching funds unclaimed. At 5.5%, Idaho would generate approximately $32 million in new federal revenue annually.
- CNA wages ($14-17/hr) can't compete with Walmart ($15-19/hr). Nursing facilities can't recruit or retain the people who provide hands-on care to your constituents' parents and grandparents.
- 10+ Idaho nursing facilities have closed since 2020. Each closure displaces vulnerable residents — often to more expensive settings — and removes healthcare jobs from the community.
| State | Medicaid Rate/Day | Methodology | Assessment Rate |
|---|
| Washington | $356 | PDPM-aligned | 6.0% |
| Oregon | $322 | Cost-based | 6.0% |
| Montana | $314 | Cost-based + workforce | 6.0% |
| North Dakota | $586 | PDPM-aligned | 5.5% |
| Idaho | $259 | RUG-III (abandoned by CMS 2019) | ~3.5% |
What This Bill Does — Six Reforms
This legislation modernizes Idaho's Medicaid nursing facility system through six straightforward reforms. Each one is based on proven models from other states.
How It Works — Three-Year Phase-In
This is not an overnight overhaul. The bill phases in over three years, giving DHW, providers, and the budget process time to adjust. No facility gets a rate cut during transition.
Year 1 (FY 2028): Assessment increases to 5.5%. Workforce fund launches. DHW begins developing new methodology. Interim rate increases maintain rate floor. State plan amendment submitted to CMS.
Year 2 (FY 2029): Component-based rate methodology takes effect. Property base modernized. BAF eliminated. First annual rate calendar published.
Year 3 (FY 2030): Quality incentive program fully operational. Scorecards published. Bonus payments begin. Full system operational.
Who Benefits
🏠 Your Constituents
- Seniors keep nursing facility beds in their community — fewer closures
- Better staffing means better care and safety
- More CNA jobs in rural Idaho
- Quality transparency — families see which facilities excel
- Parents and grandparents aren't displaced to facilities hours away
🏥 Providers
- Rates that actually cover the cost of care
- Predictable rate calendar — no surprise cuts
- Quality bonuses reward investment in staff and outcomes
- Level playing field — same methodology for everyone
- Modern formula that keeps pace with costs
🏛️ The State
- $2.33 federal match on every $1 — best ROI in the state budget
- Fewer facility closures = fewer costly emergency placements
- Workforce fund addresses labor shortage without general fund
- Quality program reduces costly hospitalizations
- Idaho stops being 46th — competitive with neighbors
What It Costs — And What Idaho Gets Back
The bottom line: The Moderate scenario costs the state general fund approximately $5.3 million per year — that's about $2.80 per Idaho resident per year. That $5.3 million generates $32+ million in federal funds that flow directly into Idaho's healthcare economy.
$2.80
Cost Per Idaho
Resident/Year
6:1
Federal Return
Per State Dollar
The provider assessment is paid by nursing facilities, not taxpayers. And every dollar of assessment revenue draws $2.33 in federal matching funds. This is money that currently goes to other states because Idaho doesn't claim it.
If We Act vs. If We Don't
✅ If Idaho Acts
- $32M+ federal funds flow into Idaho annually
- Facility closures slow or stop
- CNAs trained and retained in Idaho communities
- Quality improves — measurable, transparent
- Idaho moves from 46th toward regional average
- Rural communities keep their care infrastructure
- $2.80/resident/year investment
❌ If Idaho Doesn't Act
- $45M+/year in federal funds continues going to other states
- More facility closures — especially rural
- CNAs leave for higher-paying retail jobs
- Displaced residents go to costlier hospital settings
- Idaho remains 46th — dead last in the region
- Communities lose healthcare jobs and infrastructure
- Costs increase as crisis deepens
Common Questions
Q: Does this raise taxes on Idahoans?
No. The provider assessment is paid by nursing facilities, not individual taxpayers. And every dollar generates $2.33 in federal funds. This mechanism is used by 47 states — Idaho is leaving money on the table by keeping the rate so low.
Q: Why should the state spend more on nursing facility rates?
Because not spending is more expensive. When nursing facilities close, Medicaid residents must be placed elsewhere — often in hospital settings that cost 40-60% more per day. Prevention is cheaper than crisis. And with Idaho's 70% FMAP, the state gets $2.33 back for every $1 invested.
Q: What's the Budget Adjustment Factor (BAF)?
The BAF is a mathematical multiplier Idaho applies after calculating what a facility's rate should be. It systematically reduces the calculated rate below costs. It does not account for labor inflation, supply chain costs, insurance increases, technology mandates, or capital needs. It's the mechanism that keeps Idaho at 46th.
Q: Has any other state done this successfully?
Yes. North Dakota adopted a PDPM-aligned methodology ($586/day). Colorado passed HB23-1228 with a quality incentive program. Indiana runs a 5.5% assessment. Montana created a workforce fund. Idaho can call any of these states — contact information is included in the full proposal.
Q: Won't providers just pocket the extra money?
No. The bill includes three safeguards: (1) a quality incentive program that ties bonuses to measurable outcomes, (2) workforce fund pass-through requirements that must be verified through cost reports, and (3) annual reporting to the Legislature with full transparency on spending and outcomes.
Q: What happens if CMS doesn't approve the state plan amendment?
The bill requires DHW to come back to the Legislature before agreeing to material CMS modifications. But provider assessments within the 6% safe harbor are routine — CMS approves them regularly. 47 states use this tool. Idaho is not breaking new ground.
Full Resources Available:
• Complete 30+ page professional proposal with data, model state contacts, and legal framework
• 50-state rate comparison data with sources
• Visual infographics for committee presentations
• Draft bill text ready for Legislative Services Office review
All materials: medicaid-panel-study.vercel.app