Proposed legislationhealthcareThe agenda

CARE Act

Clinics, Ambulances, Rural Hospitals and Emergency Care

An Act relating to health care access, including medical assistance payments to rural health care providers, the rural health care workforce, and emergency medical services as an essential service, making appropriations, and including effective date and applicability provisions.

Page one

The short version

What's broken, what the bill does, and what it costs, in plain English. If you read one thing, read this.

When my son Asher got sick in the middle of the night, we rushed him to Monroe County Hospital in Albia. The doctor on staff knew at once and called for a life flight. That's what a hospital close to home is worth.

Two clinics our families used closed this year: MercyOne's in Ottumwa, just outside our district, on February 27, 2026, and River Hills' in Centerville on July 31, 2026.

Across Iowa, hospitals mostly stayed open, but many stopped delivering babies. Of the 65 counties with hospital maternity care in 2010, 20 no longer had it in 2024.

Most Medicaid money runs through private managed-care companies, and Iowa law sets no lasting floor on what they pay a rural hospital. If a contractor didn't pay a farmer for grain within thirty days, we'd call that theft. I'd prefer we get rid of privatized Medicaid, but rural hospitals can't wait.

The CARE Act (Clinics, Ambulances, Rural Hospitals and Emergency Care) makes any for-profit or nonprofit plan the state hires pay rural hospitals and clinics at least the state's own Medicaid rate. They pay or deny every clean claim within thirty days, or owe interest. They report rural denials quarterly, and an outside reviewer checks a sample.

It pays nurses and doctors to plant roots here, with $6,000,000 for rural practice awards, plus rural training rotations.

It makes EMS an essential service, with standing state funding. The state sends each county one hundred thousand dollars a year to make sure an ambulance comes when someone dials 911, and each county reports where one doesn't. The duty reaches as far as that money. Up to five million dollars more a year trains and keeps rural crews, because more than 70 percent of Iowa's EMS services rely at least partly on volunteers. Counties keep their EMS levy vote.

My opponent, Representative Austin Harris, managed HF 2635, a ban on prior authorization for cancer screenings, Medicaid included, that passed 94-1 and 44-0. Good work, but it sets no payment floor.

I won't tell you this bill would have saved either clinic. Both were already owed cost-based Medicaid rates. Since Iowa added extra Medicaid payments to hospitals in 2023, most rural hospitals report Medicaid covering their costs. Starting in 2028, federal law cuts those payments back a step each year, down to a cap. The floor belongs in law first.

As written, year one costs the state $29.6 million to $33.4 million; under Pay As You Go, only the awards and training are sure to be paid then. After that, the floor and EMS money cost $21.6 million to $25.4 million a year, more as hospital payments shrink. The awards and training need renewing.

That's the whole bill in brief. The rest of this page is the detail behind it, for anyone who wants to dig in.

See where it goes

Where the money goes

How to read this Money starts on the left and flows right along the streams; the moving dots show which way. A thicker stream carries more. Point at or tap a box or a stream to see the amounts.

The first view is the bill's first year. The awards and training money is for that year only, and lawmakers should renew it. The payment floor and both kinds of EMS money are funded every year without a new vote, so the later views carry them. Federal law cuts the extra hospital payments back a step at a time, and as they shrink the floor costs more, which the third view shows. The last view is a later year if nonprofit plans take over from the private companies: the floor binds whoever runs managed care, so the money is the same. Floor amounts are model ranges.

The same numbers, side by side

Doctors and nurses
Ambulance crews
Payment floor

As written, first year

Incentive program, statewideState general fund to Incentive program, statewide
$7,985,911
New rural awardsState general fund to Rural doctor and nurse awards
$6,000,000
Rural training grantsState general fund to Rural training rotations
$2,000,000
Rural EMS workforce grantsState general fund to Rural EMS crews
$5,000,000
Essential service grants to every countyState general fund to County ambulance coverage
$9,900,000
State share of the payment floorState general fund to Managed-care companies
$6.7 million to $10.5 million
Federal share of the payment floorFederal Medicaid match to Managed-care companies
$16.0 million to $22.1 million
Payment floor, paid to rural hospitalsManaged-care companies to Rural hospitals
$23.7 million to $31.3 million

Each year after

Incentive program, statewideState general fund to Incentive program, statewide
$7,985,911
Rural EMS workforce grantsState general fund to Rural EMS crews
$5,000,000
Essential service grants to every countyState general fund to County ambulance coverage
$9,900,000
State share of the payment floorState general fund to Managed-care companies
$6.7 million to $10.5 million
Federal share of the payment floorFederal Medicaid match to Managed-care companies
$16.0 million to $22.1 million
Payment floor, paid to rural hospitalsManaged-care companies to Rural hospitals
$23.7 million to $31.3 million

Once extra hospital payments are cut back

Incentive program, statewideState general fund to Incentive program, statewide
$7,985,911
Rural EMS workforce grantsState general fund to Rural EMS crews
$5,000,000
Essential service grants to every countyState general fund to County ambulance coverage
$9,900,000
State share of the payment floorState general fund to Managed-care companies
$16.1 million to $29.0 million
Federal share of the payment floorFederal Medicaid match to Managed-care companies
$38.3 million to $61.7 million
Payment floor, paid to rural hospitalsManaged-care companies to Rural hospitals
$56.2 million to $88.1 million

Each year after, if nonprofit plans replace the companies

Incentive program, statewideState general fund to Incentive program, statewide
$7,985,911
Rural EMS workforce grantsState general fund to Rural EMS crews
$5,000,000
Essential service grants to every countyState general fund to County ambulance coverage
$9,900,000
State share of the payment floorState general fund to Nonprofit managed-care plans
$6.7 million to $10.5 million
Federal share of the payment floorFederal Medicaid match to Nonprofit managed-care plans
$16.0 million to $22.1 million
Payment floor, paid to rural hospitalsNonprofit managed-care plans to Rural hospitals
$23.7 million to $31.3 million

The analysis

What it costs, and what we don't know yet

For anyone who wants the costs and the tradeoffs. Every figure is a range where the future is uncertain, and every one links back to where it came from.

The math

What it costs and who pays

Doctors and nurses

Incentive program, statewide
$7,985,911

Ambulance crews

Rural EMS workforce grants
$5,000,000
Essential service grants to every county
$9,900,000

Payment floor

State share of the payment floor
$6.7 million to $10.5 million
Federal share of the payment floor
$16.0 million to $22.1 million
Payment floor, paid to rural hospitals
$23.7 million to $31.3 million

Each year after, if nonprofit plans replace the companies, stream by stream. Each bar starts at zero, and they all share one scale. A pale band is a range; the analysis below says how it was built.

All of the bill's money comes from the state general fund. Some of it is for one year and some of it continues every year.

For one year, the fiscal year that begins July 1, 2027: $6,000,000 for rural awards in the health care professional incentive program and $2,000,000 for rural training rotations. These are one-year appropriations, so after the first year that money stops unless lawmakers renew it in a later budget. The awards pay out over five years, so if lawmakers want the program to keep signing people up, they have to keep funding it. They should. Iowa has the second fewest OB-GYNs for its number of women of any state, which is why maternity care is on the priority list. Three groups get equal priority for awards from the rural money, none ranked above the others: obstetricians and family doctors who provide maternity care, registered nurses, nurse practitioners and physician assistants who provide maternity or emergency care, and people who finished one of the bill's rural rotations.

Each year, with no new vote: the payment floor; up to five million dollars a year in rural EMS workforce grants; and an essential service grant of one hundred thousand dollars to each county for ambulance coverage, $9,900,000 a year in all. The EMS amounts are set in the bill and don't grow unless lawmakers raise them. Unlike the awards and training, the EMS money is permanent, because the bill makes EMS an essential service, and an essential service shouldn't depend on a budget vote each spring.

The payment floor has no fixed price. Nobody publishes what each managed-care company pays each rural hospital, so the estimate is built from what hospitals report to Medicare about their own Medicaid payments and costs. With today's extra hospital payments in place, the floor would add an estimated $23.7 million to $31.3 million in Medicaid payments to rural hospitals in its first year. The state's share of that is $6.7 million to $10.5 million, and federal Medicaid pays $16.0 million to $22.1 million. That puts the bill's first year at $29.6 million to $33.4 million in state money. After that, the floor and the EMS money continue without a new vote, so the bill as written costs the state $21.6 million to $25.4 million a year. If lawmakers renew the awards and training money at the same amounts, a later year costs what the first year does. The floor figures are priced for the first year. Later years move with hospital costs.

That first-year figure is what the bill's own text would cost. Under the Pay As You Go Act's schedule, only the one-year awards and training money, $6,000,000 and $2,000,000, is paid in the budget year that starts July 2027. The payment floor, the EMS workforce grants and the county grants start in July 2028, as far as the data center payments set aside for them, and voucher savings the school bills don't use, reach. They can't start sooner: data centers make their first payments in January 2029, for power bought in 2028. The deadlines, interest and reports aren't spending, so they start in July 2027, either way. Standing money means no yearly vote. It still has to clear the scorecard every year, and in a year the savings fall short, the scorecard trims it. A floor below the state's own rate needs federal approval first, so in a year the scorecard trims it, the floor may not apply at all until that approval comes. If the scorecard trims the floor's appropriation in a year, the bill lowers the floor for that year so its state cost stays within the money appropriated, rather than pushing the cost onto the rest of the Medicaid budget.

If the extra hospital payments end, rural hospitals fall back toward where they stood before those payments began, and the floor does more of the work: an estimated $56.2 million to $88.1 million a year, $16.1 million to $29.0 million of it state money. The bill's first year would then cost the state $39.0 million to $51.9 million, and each year after that $31.0 million to $43.9 million for the floor and the EMS money, plus whatever lawmakers renew. The payments don't have to end for the cost to rise. Starting in 2028, federal law begins cutting those payments back, a step each year, down to a federal cap, and as they shrink the floor's cost moves from the first estimate toward this one.

The companies pay the late-payment interest from their own money, and the bill keeps it out of the rates the state pays them. Rural health clinics and community health centers add no rate cost, because state law already guarantees them cost-based rates. Not counted: the cost of the quarterly reports and the yearly independent review, and any change in how many people use rural hospitals.

What it costs a county to make sure an ambulance comes when someone dials 911 isn't known. Nobody publishes which parts of Iowa have no ambulance service ready to respond, or what covering those areas would cost. The county grant is a choice about what the state should put in, not an estimate of that cost. The bill makes each county file a yearly statement naming who covers each part of the county and where nobody does, and makes the state report the gaps and the cost of closing them, so lawmakers can size the grant to the need. Until then, the bill itself keeps the duty from forcing a property tax increase: a county doesn't have to spend more on it than the state sends unless the county chooses to. The bill also says its grants don't count, under Iowa's unfunded mandate law, Code chapter 25B, as the state agreeing to pay a set share of the cost, which could otherwise be read to bind counties past the money. Counties that want more can still ask their voters for an EMS levy under Code section 422D.1, which takes sixty percent of the vote, the same as today.

How the estimate was built. CMS hospital cost reports list, for every Iowa hospital, what Medicaid paid it, managed-care and extra payments included, against its Medicaid costs. We added up the gaps at Iowa's critical access hospitals and at the other hospitals in counties outside a metropolitan area, for the years since the extra payments began and for the last year before them. The floor pays for managed-care patients what fee-for-service Medicaid would, and fee-for-service already settles critical access hospitals to cost, so the model assumes the floor closes nearly all of their gaps. Other rural hospitals get a set rate under fee-for-service, not cost, so the model assumes the floor closes anywhere from none to half of their gaps. The state's share runs from Iowa's regular federal match, 63.33 percent federal, to a higher blend, since adults covered by the Medicaid expansion are matched at ninety percent and 71 percent of Iowa's Medicaid benefit spending was federal in fiscal year 2024. Each range covers nine in ten of the model's runs from a fixed seed, in our model, so anyone can re-run it.

The floor is set at what fee-for-service Medicaid pays, on purpose. Federal rules let a state require a floor at its own fee-for-service rates without asking first, and under a federal law passed in 2025, payments like these are capped in states like Iowa at what Medicare pays. A floor tied to Medicare would be the other option. It would cost more, and it would have to fit under that cap.

Who pays for today's extra hospital payments: the hospitals themselves, through an assessment under Code chapter 249O, plus the federal match. The floor comes from the general fund instead, because it has to hold if those payments go away.

If Medicaid managed care is reversed

We'd rather get rid of privatized Medicaid. The CARE Act is written to work either way.

Rob Sand, the Democratic candidate for governor, told reporters at the State Fair that one of his first executive orders would be "starting to reverse the privatization of Medicaid" (The Gazette, August 15, 2026). His campaign site says he "will reverse the privatization of Medicaid the same way it was passed" (robsand.com). He has said which way he expects to go: "My guess is that the direction to move forward is into nonprofit-based managed care" (The Gazette, September 10, 2026). That points to replacing the private companies, not ending managed care. KFF Health News reported he doesn't want Iowa to fully return to fee-for-service, that he said state employees or nonprofit organizations could take over running managed care, and that he cautioned the change could take time.

If nonprofit plans take over, the CARE Act works the same way. The bill defines a managed care organization as any entity under contract with the state to run Medicaid, so the floor, the deadline to pay clean claims and the denial reports bind whoever holds that contract. The floor's cost, and the state and federal shares of it, stay the same, and the money still reaches rural hospitals. That's what the chart's last view shows.

If state employees ran it instead, the floor would be met by definition, since the state would be paying its own rate. But the deadline to pay clean claims, the interest and the denial reports bind only a company or group under contract with the state, so they wouldn't reach the state itself. Lawmakers should extend them to the state if it takes the work in house.

A full return to the state paying claims itself, called fee-for-service, would be different, and Sand has said he doesn't want that. The floor would be redundant, because the bill sets it at the fee-for-service rate, and its appropriation pays for increases in what the state pays the companies, which there wouldn't be. Critical access hospitals would be settled to cost again, so most of what the floor pays would move into ordinary Medicaid spending rather than going away. Two other things would change, and nobody has priced either one. The extra hospital payments exist only inside managed care contracts under federal rules, so they would stop unless something replaced them. And the tax the managed-care companies pay into a state Medicaid fund would stop. We don't put a figure on either. If Iowa did go back to fee-for-service, lawmakers should rewrite the floor section so its deadlines and denial reports apply to the state's own claims, and replace the extra hospital payments before they end.

There's an open legal question too. SF 2422, passed this year, says the department "shall continue to implement a hospital directed payment program" unless lawmakers say otherwise. It bars any department action that cuts what the managed-care companies pay into that state fund without lawmakers' approval, and it requires their approval for Medicaid waiver changes that aren't "expenditure neutral." The introduced version would have required managed care outright, and that part was dropped. A switch to nonprofit plans looks easier to square with this law than a return to fee-for-service, since the extra hospital payments could continue, but nobody has tested how it applies to an executive order, and we haven't seen a court or attorney general reading of it. The CARE Act's floor doesn't depend on the answer. It holds under any company, nonprofit or private, that the state hires to run Medicaid.

Open questions

What we don't know yet

I can't price the floor exactly. The companies' payments to each rural provider aren't public. The hospital cost reports are the best public source, and they have limits. Most of the latest year's reports are the hospitals' own unaudited filings. One rural hospital, Trinity Muscatine, left its Medicaid lines blank, which I treat as unknown, not zero, so the estimate is low by its share. And the reports are supposed to net out each hospital's own assessment, which I haven't checked. If hospitals didn't net it out, the gaps and the cost are bigger than shown. The CARE Act's quarterly reports are a start on fixing that: each company has to report the dollars it paid and denied on rural claims, by type of provider, and the state publishes them by company name. The state should go further and publish what each company pays each rural hospital.

I can't say this bill would have kept MercyOne's Ottumwa clinic or River Hills' Centerville clinic open. MercyOne's was a certified rural health clinic and River Hills is a federally qualified health center, and Code section 249A.18 already owed both cost-based Medicaid rates. River Hills blamed financial pressure. The Teamsters local that had petitioned on May 1, 2026, to represent the Centerville staff filed an unfair labor practice charge with the National Labor Relations Board on May 18, 2026, alleging that the shutdown, layoffs and discipline broke federal labor law (case page). The case is open. I don't know which account is right. What the CARE Act does for clinics is get every clean claim paid or denied within thirty days, with interest when it's late, and put money behind the doctors and nurses who staff them. Keeping a clinic open takes more than that, and the state should be strengthening the rural networks we already have, not waiting until a clinic announces its last day.

I couldn't find a published count of how often the companies wrongly deny rural providers' claims. The State Auditor's report of October 20, 2021, on managed care looked at members' appeals, and it says "provider appeals are not a part of this review." The bill's quarterly reports and yearly review are meant to fill that gap.

Iowa HHS says more than 70 percent of EMS services rely at least partly on volunteers.

Rotations don't guarantee a doctor stays. Training alone leaks: Iowa keeps 46.7 percent of the doctors who finish residency here, against 55.7 percent nationally. Minnesota's rural program is the model, and its graduates go on to practice rurally far more often than other students, but students choose to join it, so that shows an association, not proof the program caused it. The bill counts who is still practicing in a rural county after one, three and five years, so Iowa can see for itself. That's also why rotations aren't the whole plan. Their graduates can get the rural awards, which pay only people who commit to practice in a rural county.

Who gives something up

The tradeoffs

Right now, Medicaid pays most rural hospitals more than their Medicaid costs. Iowa started extra hospital payments through the companies in July 2023. In the hospitals' own latest cost reports, rural hospitals as a group reported $1.54 from Medicaid for every dollar of Medicaid cost, up from 84 cents the year before those payments began. That includes all three critical access hospitals in Appanoose, Davis and Monroe counties. The floor matters less today than it will if those payments shrink. That makes now the right time to put it in law. While those payments last, the floor costs the state less, and it's already in place when the federal cutbacks begin in 2028, not after a hospital comes up short.

Iowa's rural hospitals are in better shape than most. The Center for Healthcare Quality and Payment Reform counts 8 of its 94 rural hospitals at risk of closing, against 31 percent of rural hospitals nationally. The same group finds that low payments from private insurance, more than Medicaid, are the biggest cause of losses at rural hospitals at risk. This bill doesn't touch what private insurers pay rural hospitals. That needs its own look, and the state should take it. The CARE Act deals with the part Iowa controls directly: the companies it hires to run Medicaid.

Iowa's benchmark marketplace premium is the 9th cheapest of 51. That's worth protecting. The CARE Act leaves marketplace plans alone and deals with Medicaid managed care and the rural workforce.

Lawmakers have already acted on parts of this. HF 972, passed in 2025, created the health care professional incentive program, which pays up to $200,000 for a five-year commitment in a shortage area and gets $7,985,911 a year. This bill adds a rural share to that program rather than starting a new one. HF 2635, managed by Rep. Austin Harris, passed 94-1 in the House and 44-0 in the Senate. It bans prior authorization for recommended cancer screenings and for emergencies that come up during a hospital stay, for about 829,000 Iowans on state-regulated plans and about 681,000 on Medicaid and Hawki, for requests made on or after January 1, 2027. HF 2007, from Rep. Gearhart, a Republican, proposed grants to train EMTs in small towns. And counties can already fund EMS with voter approval under Code chapter 422D, and SF 2472 lets them ask voters for a higher levy starting July 1, 2027. Those are real steps, and the CARE Act builds on them instead of starting over. None of them sets a floor on what the companies pay rural hospitals and clinics, and keeping an ambulance crew staffed shouldn't come down to a county levy vote. The state should carry more of that load, and the CARE Act's EMS grants add money every year to train new crew members and keep the ones we have.

Counties can already declare EMS an essential service, and many have. As of June 2025, Iowa HHS counted 21 of Iowa's 99 counties that had voted to, Appanoose among them. Davis and Monroe were not on the list. A statewide duty takes that choice away from the rest, and some will see it as Des Moines telling counties what to do. That's why the bill pays every county every year, leaves the levy and its vote with the county, and lets each county decide how to provide the service. The same agency says there "remains no legislative mandate to ensure all Iowans have timely access to emergency care." I think a family's ambulance shouldn't depend on which county they live in.

The duty only reaches as far as the money. Under the bill, a county where full coverage costs more than the state sends doesn't have to make up the difference. Utah already required every city and county to ensure at least a minimum level of 911 ambulance service, and in 2025, added a line calling it essential (enrolled bill), with no money appropriated. I'd rather pay for it than order it. The yearly county statements will show where the gaps are and what they cost, and lawmakers should raise the grant to close them.

Nothing in the bill stops a county from cutting its own EMS spending by the amount of the grant, so in some counties the grant could replace local money rather than add to it. I left out a rule against that on purpose: in counties already stretched by the property tax caps, some relief for local taxpayers is a fair use of the money. The yearly statements will show it, and if counties swap state money for their own while gaps stay open, lawmakers should add a rule that each county keep up its own EMS spending.

A floor like this has been passed before. The Legislature wrote one into HF 2460 in 2016, and Gov. Branstad vetoed it, saying the department's own rate floors "already include protections for providers." This bill puts the floor in the Code and doesn't let a company and a provider bargain below it.

The draft text

The draft bill language

For legislators, reporters and anyone who wants the legal wording. This is our draft, written the way Iowa bills are written, so you can see exactly what we mean. If I'm elected, the Legislature's nonpartisan drafting office, the Legislative Services Agency, writes the version that gets filed, and the wording will change. Page one and the costs above are the commitment.

Read the draft bill language

Proposed legislation

A BILL FOR

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

Section 1. NEW SECTION. Rural health care providers —— managed care payment floor, prompt payment, and claim denial accountability. This section joins chapter 249A.

1. For purposes of this section, unless the context otherwise requires:
a. “Clean claim” means the same as defined in section 507B.4A, subsection 2.
b. “Critical access hospital” means a hospital certified as a critical access hospital under the federal Medicare program pursuant to 42 U.S.C. 1395i-4.
c. “Fee-for-service rate” means the amount the department would pay a rural health care provider for a covered service provided to a recipient who is not enrolled with a managed care organization, under the reimbursement methodology in the medical assistance state plan, including any cost settlement the department would make for that service.
d. “Managed care organization” means an entity acting pursuant to a contract with the department to administer the medical assistance program.
e. “Rural county” means a county in this state that is not included in a metropolitan statistical area as delineated by the United States office of management and budget.
f. “Rural health care provider” means any of the following:
(1) A critical access hospital.
(2) A rural emergency hospital as defined in section 135B.1.
(3) A hospital licensed under chapter 135B that is located in a rural county.
(4) A rural health clinic as defined in 42 U.S.C. 1395x(aa).
(5) A federally qualified health center as defined in 42 U.S.C. 1396d(l)(2)(B), for services provided at a site located in a rural county.
2. Payment floor. A managed care organization shall reimburse a rural health care provider for a covered service provided to a recipient in an amount not less than one hundred percent of the fee-for-service rate for that service. A managed care organization and a rural health care provider may agree to a higher amount, but shall not agree to a lower amount. Payments a managed care organization makes to a rural health care provider under chapter 249O count toward the amount required under this subsection. This subsection does not reduce any reimbursement required under section 249A.18 or any payment made under chapter 249O.
3. Prompt payment.
a. A managed care organization shall pay or deny a clean claim from a rural health care provider within thirty days after the managed care organization receives the claim. A denial shall state the specific reason for the denial and the information the rural health care provider would need to correct the claim.
b. A clean claim that is not paid or denied within the time required under paragraph “a” shall be paid with interest at the rate of ten percent per annum, beginning on the day after the payment was due and ending on the day the claim is paid.
c. A managed care organization shall pay interest owed under this subsection from its own funds. The department shall not include interest paid under this subsection in the costs used to develop capitation rates.
4. Claim denial reporting.
a. Each managed care organization shall report to the department each calendar quarter all of the following for claims submitted by rural health care providers, stated separately for each type of rural health care provider listed in subsection 1, paragraph “f”:
(1) The number and dollar amount of claims received, paid, and denied.
(2) The ten most common reasons for denial, and the number of claims denied for each.
(3) The number of denials reversed on reconsideration, on appeal, or after a state fair hearing.
(4) The average number of days, and the longest number of days, from receipt of a clean claim to payment.
(5) The amount of interest paid under subsection 3.
b. The department shall publish each report on the department’s internet site within forty-five days after the end of the quarter, in a form that identifies each managed care organization by name.
5. Independent review of denials.
a. Each year the department shall contract with an independent reviewer that is not affiliated with any managed care organization to review a random sample of the claims from rural health care providers that each managed care organization denied during the prior year.
b. If the reviewer finds that more than five percent of the sampled denials by a managed care organization were not supported by the terms of the managed care organization’s contract with the department, the managed care organization shall reprocess every claim from a rural health care provider denied for the same reason during that year, pay any amount owed with interest as provided in subsection 3, and submit a corrective action plan to the department.
c. The department shall publish the reviewer’s findings on the department’s internet site.
6. Contracts and federal approval. The department shall include the requirements of this section in each contract with a managed care organization, and shall amend each existing contract as necessary. The department shall submit to the centers for Medicare and Medicaid services of the United States department of health and human services any documentation necessary for approval of the payment floor in subsection 2. If federal approval is required for subsection 2 and has not been received, subsection 2 shall not apply until the department receives approval and notifies the general assembly and the Code editor.
7. Appropriation. There is appropriated from the general fund of the state to the department for each fiscal year an amount necessary to pay the nonfederal share of any increase in capitation payments to managed care organizations that is attributable to subsection 2. If the appropriation under this subsection is reduced for a fiscal year under the pay-as-you-go scorecard, the department shall reduce the percentage in subsection 2 for that fiscal year so that the nonfederal share of the increase does not exceed the moneys appropriated. A reduction under this subsection applies to services provided on or after the first day of the next rating period.
8. Rules. The department shall adopt rules pursuant to chapter 17A to implement and administer this section.

Sec. 2. NEW SECTION. Health care professional incentive program —— rural awards. This section joins chapter 256.

1. For purposes of this section, unless the context otherwise requires:
a. “Commission” means the college student aid commission.
b. “Department” means the department of health and human services.
c. “Program” means the health care professional incentive program established in section 256.222.
d. “Rural county” means a county in this state that is not included in a metropolitan statistical area as delineated by the United States office of management and budget.
2. Moneys appropriated for the purposes of this section shall be deposited in the health care professional incentive program fund created in section 256.222, and shall be used only for awards under the program to eligible health care professionals who fulfill their employment obligation in a rural county. For purposes of awards made from such moneys, each rural county shall be an eligible practice area.
3. In making awards from moneys appropriated for the purposes of this section, the commission shall give priority to the following:
a. Physicians who practice obstetrics and gynecology, or who practice family medicine and provide obstetric care.
b. Registered nurses, nurse practitioners, and physician assistants who provide obstetric or emergency care.
c. Individuals who completed a rural clinical rotation funded under the rural clinical training grant program established by this Act in chapter 135.
4. By January 15 of each year, the commission, in coordination with the department, shall report to the general assembly the number of awards made from moneys appropriated for the purposes of this section, by profession and by county, and the number of recipients still practicing in a rural county one year, three years, and five years after their employment obligation began.

Sec. 3. NEW SECTION. Rural clinical training grant program. This section joins chapter 135.

1. For purposes of this section, unless the context otherwise requires:
a. “Rural clinical rotation” means a clinical training placement of a medical student, or of a physician enrolled in an accredited residency program, lasting at least sixteen weeks, with a physician practice, hospital, rural health clinic, or federally qualified health center located in a rural county.
b. “Rural county” means a county in this state that is not included in a metropolitan statistical area as delineated by the United States office of management and budget.
c. “Sponsor” means a medical school located in this state, or the sponsor of an accredited graduate medical education program located in this state.
2. The department shall establish a rural clinical training grant program to award grants to sponsors to establish or expand rural clinical rotations. A grant may be used for stipends, housing, and travel for participants, and for payments to the physicians and other health care professionals who supervise them.
3. The department shall give priority to rural clinical rotations in obstetrics and gynecology, family medicine, and emergency medicine.
4. A sponsor receiving a grant shall inform each participant of the rural awards available under the health care professional incentive program established in section 256.222.
5. By January 15 of each year, the department shall report to the general assembly the number of rural clinical rotations funded, by sponsor, specialty, and county, and, for participants who have completed training, the number practicing in a rural county.
6. The department shall adopt rules pursuant to chapter 17A to implement and administer this section.

Sec. 4. NEW SECTION. Rural emergency medical services workforce grant program —— fund. This section joins chapter 147A.

1. For purposes of this section, unless the context otherwise requires:
a. “Rural county” means a county in this state that is not included in a metropolitan statistical area as delineated by the United States office of management and budget.
b. “Service program” means the same as defined in section 147A.1.
2. The department shall establish a rural emergency medical services workforce grant program to award grants to service programs based in a rural county for any of the following:
a. Tuition, fees, books, and testing costs for individuals training for certification as emergency medical care providers who agree to serve with the service program for at least three years after certification.
b. Retention payments to certified emergency medical care providers, paid or volunteer, who agree to serve with the service program for at least three years.
c. Costs of offering emergency medical care training courses in a rural county.
3. The rural emergency medical services workforce grant fund is created in the state treasury under the control of the department. Moneys in the fund are appropriated to the department for the purposes of this section. Notwithstanding section 8.33, moneys in the fund that remain unencumbered or unobligated at the close of each fiscal year shall not revert but shall remain available for expenditure.
4. For each fiscal year beginning on or after July 1, 2027, there is appropriated from the general fund of the state for deposit in the rural emergency medical services workforce grant fund an amount sufficient to cover grants awarded under the program, not to exceed five million dollars in any fiscal year.
5. By January 15 of each year, the department shall report to the general assembly the number of individuals trained and certified with grant moneys, the number of retention payments made, and the number of grant recipients still serving with a service program in a rural county.
6. The department shall adopt rules pursuant to chapter 17A to implement and administer this section.

Sec. 5. NEW SECTION. Emergency medical services —— essential service —— county coverage —— essential service grants. This section joins chapter 147A.

1. For purposes of this section, unless the context otherwise requires:
a. “Emergency ambulance service” means ground ambulance response by a service program to a request for emergency medical care made by calling 911.
b. “Service program” means the same as defined in section 147A.1.
2. Emergency medical services are an essential service in this state.
3. Beginning July 1, 2028, each county shall ensure that emergency ambulance service is available throughout the county. A county may meet this requirement by operating a service program, by contracting with one or more service programs, through an agreement under chapter 28E, through a benefited emergency medical services district under chapter 357F, or by any combination of these.
4. By January 15 of each year, beginning January 15, 2028, each county shall file with the department a statement naming each service program that provides emergency ambulance service in each part of the county, and identifying any part of the county where emergency ambulance service is not available. The department shall publish the statements on the department’s internet site. By March 1 of each year, the department shall report to the general assembly each part of the state where emergency ambulance service is not available and an estimate of the cost of making it available.
5. Essential service grants.
a. For each fiscal year, the department shall pay each county an emergency medical services essential service grant of one hundred thousand dollars. If the appropriation under paragraph “d” is reduced for a fiscal year under the pay-as-you-go scorecard, the department shall reduce each county’s grant for that fiscal year by the same percentage.
b. A county that has established an emergency medical services trust fund under section 422D.6 shall deposit the grant in that fund. Any other county shall deposit the grant in a separate county fund to be used only for emergency medical services.
c. A county shall use grant moneys to provide or contract for emergency ambulance service, including any cost listed in section 422D.6, subsection 3.
d. There is appropriated from the general fund of the state to the department for each fiscal year an amount necessary to pay the grants under this subsection.
6. State funding and local choice.
a. A county is required to meet the requirement in subsection 3 in a fiscal year only to the extent that the grant the county receives for that fiscal year under subsection 5, together with any other moneys the county chooses to make available, is sufficient. A county that uses its grant for emergency ambulance service shall not be subject to any fine or penalty for failing to meet the requirement in subsection 3. The grants under subsection 5 shall not be considered a specification of the amount or proportion of the cost which the state shall pay annually for purposes of section 25B.2, subsection 3.
b. This section does not require a county to impose a tax under chapter 422D or to impose or increase any other tax, and does not change the voter approval required to impose a tax under chapter 422D.
7. The department shall adopt rules pursuant to chapter 17A to implement and administer this section.

Sec. 6. COLLEGE STUDENT AID COMMISSION —— HEALTH CARE PROFESSIONAL INCENTIVE PROGRAM RURAL AWARDS —— APPROPRIATION. There is appropriated from the general fund of the state to the college student aid commission for the fiscal year beginning July 1, 2027, and ending June 30, 2028, the following amount, or so much thereof as is necessary, to be used for the purposes designated:

For deposit in the health care professional incentive program fund created in section 256.222, to be used for rural awards as provided in this Act:

$6,000,000

Sec. 7. DEPARTMENT OF HEALTH AND HUMAN SERVICES —— RURAL CLINICAL TRAINING GRANT PROGRAM —— APPROPRIATION. There is appropriated from the general fund of the state to the department of health and human services for the fiscal year beginning July 1, 2027, and ending June 30, 2028, the following amount, or so much thereof as is necessary, to be used for the purposes designated:

For the purpose of implementing and administering the rural clinical training grant program:

$2,000,000

Sec. 8. PAY-AS-YOU-GO SCORECARD. This Act is subject to the pay-as-you-go scorecard.

Sec. 9. EFFECTIVE DATE. This Act takes effect July 1, 2027.

Sec. 10. APPLICABILITY. Section 1 of this Act applies to claims for covered services provided on or after July 1, 2027.

EXPLANATION

The inclusion of this explanation does not constitute agreement with the explanation’s substance by the members of the general assembly.

This bill relates to health care access.

The bill creates a new Code section in chapter 249A for rural hospitals and clinics that serve Medicaid patients through managed care organizations (MCOs). A rural health care provider is a critical access hospital, a rural emergency hospital, any other hospital in a county outside a metropolitan statistical area, a rural health clinic, or a federally qualified health center site in such a county. An MCO must pay a rural health care provider at least one hundred percent of what the state would pay for the same service under fee-for-service Medicaid, including the cost settlement critical access hospitals receive under fee-for-service. The MCO and the provider cannot agree to less. Existing cost-based payment to rural health clinics and federally qualified health centers under Code section 249A.18 (cost-based reimbursement for rural health clinics and federally qualified health centers) and payments under the hospital directed payment program in Code chapter 249O are not reduced; those payments count toward the floor.

An MCO must pay or deny each clean claim from a rural health care provider within thirty days, and pay interest at ten percent per annum on late claims from its own funds, not from money the state pays it. Each MCO reports its rural claims, denials, reversals and payment times every quarter, and the department of health and human services publishes the reports by MCO. Each year an independent reviewer checks a random sample of each MCO’s denials of rural claims. If more than five percent of the sampled denials were not supported by the MCO’s contract, the MCO must reprocess every claim denied for the same reason that year and pay what it owes with interest. The department must seek any federal approval the payment floor needs, and the floor does not apply until that approval is received. The state pays the nonfederal share of any resulting increase in payments to MCOs. If the pay-as-you-go scorecard reduces that appropriation for a fiscal year, the department lowers the floor for that year so its state cost stays within the money appropriated.

The bill creates a new Code section in chapter 256 that reserves new money in the health care professional incentive program, created in 2025, for awards to health care professionals who practice in a rural county, with priority for obstetric care, emergency care, and graduates of the bill’s rural training rotations. It creates a rural clinical training grant program in chapter 135 for rotations of at least sixteen weeks in rural counties, and a rural emergency medical services workforce grant program and fund in chapter 147A for training, certification and retention of emergency medical care providers who agree to serve at least three years with a rural service. Each program reports every year on how many participants are still working in a rural county. The bill makes a standing appropriation to the rural emergency medical services workforce grant fund of up to five million dollars in each fiscal year.

The bill creates a new Code section in chapter 147A that declares emergency medical services an essential service in this state. Beginning July 1, 2028, each county must ensure that a ground ambulance is available throughout the county to respond when someone dials 911 for emergency medical care. A county can do this by running a service, contracting for one, joining with other governments, using a benefited emergency medical services district, or any combination. Each county files a yearly statement naming the service that covers each part of the county and any part that has no coverage, the department publishes the statements, and the department reports to the general assembly each year on the gaps and what it would cost to close them. The state pays each county an essential service grant of one hundred thousand dollars each fiscal year, through a standing appropriation, to be deposited in the county’s emergency medical services trust fund or a separate fund and used for ambulance service.

The bill may include a state mandate as defined in Code section 25B.3 (definitions). A county must meet the coverage requirement only to the extent its state grant, plus any money the county chooses to add, is enough, and a county that uses its grant for ambulance service is not subject to a fine or penalty for falling short. The grants are not a specification, for purposes of the unfunded state mandate rule in Code section 25B.2 (findings and purpose, effect of unfunded state mandate), of the amount the state pays toward the requirement. The bill does not require a county to impose or increase any tax and does not change the voter approval required for a county emergency medical services tax under Code chapter 422D.

The bill appropriates $6,000,000 to the college student aid commission for rural awards and $2,000,000 for rural clinical training grants, for the fiscal year beginning July 1, 2027.

The bill is subject to the pay-as-you-go scorecard, which a separate bill would create. In any fiscal year, the bill’s cost to the general fund is limited to the savings the scorecard counts against it.

The bill takes effect July 1, 2027. The payment floor, prompt payment and reporting requirements apply to claims for services provided on or after that date.

Sources

Where every number comes from

For anyone checking our work. Each figure with the site it came from and the day we checked it, and each law the bill cites.

Show every source

Figures

65Of the 65 counties with hospital maternity care in 2010, 20 no longer had it in 2024.rhrc.umn.educhecked 2026-09-27
20Of the 65 counties with hospital maternity care in 2010, 20 no longer had it in 2024.rhrc.umn.educhecked 2026-09-27
second fewestIowa has the second fewest OB-GYNs for its number of women of any state, which is why maternity care is on the priority list.data.hrsa.govchecked 2026-09-27
46.7 percentTraining alone leaks: Iowa keeps 46.7 percent of the doctors who finish residency here, against 55.7 percent nationally.aamc.orgchecked 2026-09-27
55.7 percentTraining alone leaks: Iowa keeps 46.7 percent of the doctors who finish residency here, against 55.7 percent nationally.aamc.orgchecked 2026-09-27
70 percentUp to five million dollars more a year trains and keeps rural crews, because more than 70 percent of Iowa's EMS services rely at least partly on volunteers.hhs.iowa.govchecked 2026-09-27
94-1My opponent, Representative Austin Harris, managed HF 2635, a ban on prior authorization for cancer screenings, Medicaid included, that passed 94-1 and 44-0.legis.iowa.govchecked 2026-09-27
44-0My opponent, Representative Austin Harris, managed HF 2635, a ban on prior authorization for cancer screenings, Medicaid included, that passed 94-1 and 44-0.legis.iowa.govchecked 2026-09-27
829,000It bans prior authorization for recommended cancer screenings and for emergencies that come up during a hospital stay, for about 829,000 Iowans on state-regulated plans and about 681,000 on Medicaid and Hawki, for requests made on or after January 1, 2027.legis.iowa.govchecked 2026-09-27
681,000It bans prior authorization for recommended cancer screenings and for emergencies that come up during a hospital stay, for about 829,000 Iowans on state-regulated plans and about 681,000 on Medicaid and Hawki, for requests made on or after January 1, 2027.legis.iowa.govchecked 2026-09-27
9th cheapest of 51Iowa's benchmark marketplace premium is the 9th cheapest of 51.kff.orgchecked 2026-09-27
8 of its 94The Center for Healthcare Quality and Payment Reform counts 8 of its 94 rural hospitals at risk of closing, against 31 percent of rural hospitals nationally.chqpr.orgchecked 2026-09-27
31 percentThe Center for Healthcare Quality and Payment Reform counts 8 of its 94 rural hospitals at risk of closing, against 31 percent of rural hospitals nationally.chqpr.orgchecked 2026-09-27
84 centsIn the hospitals' own latest cost reports, rural hospitals as a group reported $1.54 from Medicaid for every dollar of Medicaid cost, up from 84 cents the year before those payments began.downloads.cms.govchecked 2026-09-27
$1.54In the hospitals' own latest cost reports, rural hospitals as a group reported $1.54 from Medicaid for every dollar of Medicaid cost, up from 84 cents the year before those payments began.downloads.cms.govchecked 2026-09-27
all threeThat includes all three critical access hospitals in Appanoose, Davis and Monroe counties.downloads.cms.govchecked 2026-09-27
$53.7 millionHow far Medicaid payments fell short of costs at Iowa's critical access hospitals in fiscal year 2022, an input to our model.downloads.cms.govchecked 2026-09-27
63.33 percentThe state's share runs from Iowa's regular federal match, 63.33 percent federal, to a higher blend, since adults covered by the Medicaid expansion are matched at ninety percent and 71 percent of Iowa's Medicaid benefit spending was federal in fiscal year 2024.govinfo.govchecked 2026-09-27
71 percentThe state's share runs from Iowa's regular federal match, 63.33 percent federal, to a higher blend, since adults covered by the Medicaid expansion are matched at ninety percent and 71 percent of Iowa's Medicaid benefit spending was federal in fiscal year 2024.macpac.govchecked 2026-09-27
$7,985,911HF 972, passed in 2025, created the health care professional incentive program, which pays up to $200,000 for a five-year commitment in a shortage area and gets $7,985,911 a year.legis.iowa.govchecked 2026-09-27
$200,000HF 972, passed in 2025, created the health care professional incentive program, which pays up to $200,000 for a five-year commitment in a shortage area and gets $7,985,911 a year.legis.iowa.govchecked 2026-09-27
21 of Iowa's 99 countiesAs of June 2025, Iowa HHS counted 21 of Iowa's 99 counties that had voted to, Appanoose among them.hhs.iowa.govchecked 2026-10-01
sixty percentCounties that want more can still ask their voters for an EMS levy under Code section 422D.1, which takes sixty percent of the vote, the same as today.legis.iowa.govchecked 2026-10-01

Laws cited

chapter 249AMedical assistance (Medicaid). Section 1 of the bill joins it.legis.iowa.gov
249A.18Rural health clinics and federally qualified health centers "shall receive cost-based reimbursement for one hundred percent of the reasonable costs" of Medicaid services. The bill does not reduce it. legis.iowa.gov
chapter 249OHospital directed payment program (2025): state directed payments to nonstate hospitals, with the nonfederal share paid by a hospital assessment. The bill does not reduce these payments. legis.iowa.gov
507B.4APrompt payment of clean claims by insurers and HMOs; subsection 2 defines a clean claim and sets interest at "ten percent per annum" on late clean claims. legis.iowa.gov
135B.1Hospital licensing definitions, including "rural emergency hospital".legis.iowa.gov
chapter 135BLicensure and regulation of hospitals.legis.iowa.gov
chapter 17AIowa administrative procedure act; rulemaking for each new section.legis.iowa.gov
chapter 256Department of education and college student aid programs. Section 2 of the bill joins it.legis.iowa.gov
256.222Health care professional incentive program (2025): loan repayment or an income bonus of up to two hundred thousand dollars for a five-year full-time commitment in a shortage area the department names, paid out over the five years. legis.iowa.gov
chapter 135Department of health and human services, public health. Section 3 of the bill joins it.legis.iowa.gov
chapter 147AEmergency medical care and trauma care. Section 4 of the bill joins it.legis.iowa.gov
147A.1Emergency medical care definitions, including "service program" (an authorized ambulance or nontransport service).legis.iowa.gov
8.33Year-end reversion of appropriations; the EMS workforce grant fund is exempt.legis.iowa.gov
HF 26352026 prior authorization law (enrolled; signed May 13, 2026). Bans prior authorization for recommended cancer screenings and for emergencies that arise during an inpatient stay, in state-regulated plans (Division II) and in Medicaid and Hawki managed care (Division III), for requests on or after January 1, 2027; adds reviewer, audit and appeal rules for insurers. It does not set what managed care companies pay providers or how fast. legis.iowa.gov
HF 9722025 rural health care law (enrolled). Created the health care professional incentive program, asked federal approval for a hub-and-spoke rural funding model and a Medicaid graduate medical education payment, and repealed the older loan repayment and residency grant programs. legis.iowa.gov
HF 24602016 health and human services budget (enrolled). Sec. 27 said managed care reimbursement "shall not be lower than the rate floor established by the department". The governor item-vetoed that provision as "redundant and unnecessary". legis.iowa.gov
HF 20072026 bill by Rep. Gearhart (introduced) for grants to train EMTs in small police and volunteer fire departments, up to one hundred thousand dollars a year. Referred to Health and Human Services January 13, 2026; no further action. legis.iowa.gov
SF 24722026 property tax law (enrolled). From fiscal year 2028, raises the county EMS levy cap from seventy-five cents to one dollar and fifty cents per thousand dollars of value, where voters approve it (Division IX, Sec. 83, p. 35). legis.iowa.gov
chapter 422DOptional county taxes for emergency medical services: a county that declares EMS an essential service may levy a property tax and income surtax with sixty percent voter approval. legis.iowa.gov
422D.1How a county declares EMS an essential county service (a resolution at three board meetings, sixty days' notice, an EMS advisory council) and asks voters for an EMS property tax or income surtax, which needs sixty percent of the vote. The bill leaves all of it as it is. legis.iowa.gov
422D.6The county emergency medical services trust fund and what it may pay for, including ambulances, equipment, training, buildings and, since 2025, the wages of EMS providers. The bill's county grants go into this fund where a county has one. legis.iowa.gov
chapter 25BThe State Mandates Act. A city or county does not have to carry out a new duty the state puts on it unless the state pays for it, with exceptions. legis.iowa.gov
25B.2Subsection 3: if the state enacts a mandate after July 1, 1994, and "does not appropriate moneys to fully fund the cost", the political subdivision is not required to do it, "unless the legislation specifies the amount or proportion of the cost of the state mandate which the state shall pay annually". The bill applies it to the county ambulance duty and says its grants are not such a specification. legis.iowa.gov
25B.3Defines a "state mandate": a requirement that makes political subdivisions together spend at least one hundred thousand dollars a year, or five hundred thousand dollars within five years, of local revenue. legis.iowa.gov
chapter 28EJoint exercise of governmental powers; lets counties share a service by agreement.legis.iowa.gov
chapter 357FBenefited emergency medical services districts, with their own trustees and levy.legis.iowa.gov
SF 2422Enrolled and signed. Division VI tells the department it "shall continue to implement a hospital directed payment program" unless lawmakers authorize otherwise. Division V bars any department action that reduces what managed-care companies pay into the state's managed care tax fund, unless lawmakers approve or federal law requires it, and bars Medicaid waiver or state plan changes that are not "expenditure neutral", as an actuary certifies, without lawmakers' approval. The introduced version would have required managed care for all Medicaid benefits; that language is not in the enrolled act. Read from the enrolled PDF. legis.iowa.gov