(Des Moines, Iowa) – An advocate for seniors is calling on the state auditor’s office to investigate the state’s failure to collect $10.7 million in fees owed by corporate nursing home owners. The auditor’s office says it has reported a state agency’s failure to collect the fees but has no enforcement authority. The Iowa Capital Dispatch reported last week that 49 Iowa nursing homes owe Iowa taxpayers more than $10.7 million in unpaid fees that are past due and which the state has so far failed to collect.
According to documents obtained through the state’s Open Records Law, one for-profit company based in West Des Moines operates 18 care facilities that collectively owe the state $3.6 million in unpaid fees. The company’s top two executives, meanwhile, have made $293,000 in political donations to Statehouse leaders, the governor and industry lobbyists.
The fees the state imposes on nursing homes, called Quality Assurance Assessment fees, are a mechanism that has been used since 2009 to artificially inflate the facilities’ cost of doing business. That increased expense enables the facilities to draw down more money in Medicaid reimbursement for resident care. Often, the increased Medicaid payments more than offset the cost of the fees paid to the state, resulting in a net gain for the homes.
By law, the care facilities are supposed to use that additional money to increase the compensation of front-line caregivers — which is why the fees are called Quality Assurance Assessment fees. It’s a circular, but legal, method of increasing the revenue collected by nursing homes and has been approved by the federal government in Iowa and other states.
However, not all Iowa homes are paying the fees and of those that do, up to 18% of them have failed to meet all of the legal requirements for spending their additional Medicaid revenue on pay increases for front-line caregivers. Two Iowa nursing home companies that have filed for bankruptcy in recent years did so while owing the state a combined total of $5 million in unpaid QAA fees. Some of those unpaid fees date back to at least 2019, according to court records.
John Hale, a consultant and advocate for Iowa seniors, says it appears to him that “taxpayers are getting taken to the cleaners” by nursing home companies. ” Hale said an investigation by the Iowa Auditor of State is warranted, in part to make sure nursing facilities that claim to be increasing staff pay are doing so.
In a written statement, Auditor of State Rob Sand said his office has publicly reported DHHS’ failure “to collect these fees as required by law. However, the auditor’s office isn’t an enforcement agency. We have no legal authority to force DHHS to collect the fees or impose penalties on the facilities that don’t pay them.”
The company that appears to owe taxpayers the most is Accura Healthcare of West Des Moines. Eighteen of the for-profit company’s Iowa care facilities are currently on payment plans with the state, and they now owe a combined $3,644,432.97, according to DHHS. Campaign finance records show that since 2015, Accura Healthcare’s CEO, Ted LeNeave, has personally donated more than $239,000 to GOP campaigns in Iowa and to the political action committee of the industry’s main lobbying organization. That total includes $54,500 LeNeave donated directly to Gov. Kim Reynolds’ campaigns, plus $76,000 LeNeave donated to Iowa Senate Majority Leader Jack Whitver of Grimes.
Since 2021, the president of Accura Healthcare, Lisa Toti, has made $36,000 in political donations in Iowa, including $16,000 contributed to Reynolds’ campaign committees.
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