On Tuesday, House and Senate appropriations subcommittees advanced the governor’s health care proposal to expand Iowa’s medical residencies and increase funding for the state’s health care student loan repayment program, which was largely supported by medical provider advocates.
House File 754 and Senate File 575 are companion versions of Gov. Kim Reynolds’ bill that address Iowa’s health-care workforce shortages and a lack of care in rural Iowa.
The bill would consolidate Iowa’s current five student loan repayment programs and increase funding from $4.2 million to $10 million. The loan repayment program would be open to anyone who commits to practicing in Iowa’s high-demand areas for five years, regardless of where they were trained.
The measure would also increase in-state medical training by creating 115 new residency slots at Iowa teaching hospitals, with the Iowa Department of Health and Human Services directed to seek $150 million in federal funding for the expansion.
Reynolds’ legislative liaison, Molly Severn, told lawmakers on Tuesday that the University of Iowa and Broadlawns Medical Center, two Iowa teaching hospitals, would provide the state match for the federal funding.
“Fully implemented over four years, 460 new physicians will be trained right here in Iowa,” according to Severn.
The legislation also includes a directive for Iowa HHS to seek federal approval for Medicaid rate flexibility “with the goal of incentivizing creative regional partnerships,” which will allow rural health care systems to be modeled after the state’s existing Centers of Excellence program.
The bill would also unbundle Medicaid maternal rates and set aside $642,000 to raise rates for providers serving mothers and infants.
Overwhelmingly, advocates for health care professionals supported the legislation. According to Seth Brown of the Iowa Medical Society, the bill incorporates several of his organization’s suggestions for addressing Iowa’s health care shortages.
“The workforce shortage has been a top issue for our members for a while now,” Brown told the crowd. “In 2024, we released a set of recommendations about what would move the needle, and most notably, physician residency slots came out on top, followed by incentives for those training in Iowa. So having these in there was extremely important to us, and we appreciate it.”
The majority of concerns raised in the bill related to changes to the loan repayment program, specifically professions covered by current loan repayment programs that would no longer be defined as a “eligible health care professional” under the new legislation.
Advocates for physical therapists, social workers, and nurse anesthetists expressed concern that workers in their organizations who currently use the state’s loan repayment program would no longer be able to access it.
The legislation defines an eligible health care profession as “health care occupational categories that are in high demand,” based on a list created and maintained by Iowa HHS. The list includes, but is not limited to, physicians, physician assistants, registered nurses, nurse practitioners, nurse educators, and mental health professionals.
Iowa HHS Director Kelly Garcia stated that the department intends to hire a health care economist who will collaborate with other HHS employees and the Division of Insurance to conduct an analysis of physician shortages as well as shortages in other professional and clinical areas.
Garcia said this approach will “deepen our work quite considerably,” as Iowa HHS currently assesses shortages “through a Medicaid lens,” she said. She stated that the list of high-demand health care professions and areas is currently being developed, and that more information on the methodology of the list will be released once it is complete.
She stated that this information will assist HHS and lawmakers in determining the best way to allocate funds through the loan repayment program to address Iowa’s health care shortages — information that is currently not collected or used.
“Today, largely, many of those programs today are first-come, first-serve,” Garcia pointed out. “So there’s really no analysis today on, like, ‘where does (the funding) need to go?'” So if we come back to you and the governor and say, ‘Look, we (were) able to make these lists,’ and, ‘Look, this is what the shortage looks like, this is what the impact is,’ we’ll have a better understanding of that.”
Sen. Molly Donahue, D-Cedar Rapids, expressed continued concern about “transparency” in the measure’s funding. Garcia stated that the only state cost to the program is an increase in the loan repayment program, with other components funded by federal dollars and private-public partnerships.
Garcia previously stated that the state intends to open the new medical residencies by July 1, though federal funding requests and changes have not been finalized.
Iowa HHS issued a public notice on Tuesday seeking changes to reimbursement rates for acute care hospital graduate medical education (GME) payments under Medicaid, which would require approval from the Centers for Medicare and Medicaid Services.