Gov. Kim Reynolds was joined by health care professionals at a news conference Feb. 18, 2025 about her proposals to improve rural health care access. (Photo by Robin Opsahl/Iowa Capital Dispatch)
House and Senate appropriations subcommittees on Tuesday 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, largely with support from advocates for Iowa’s medical providers.
House File 754 and Senate File 575 are companion versions of Gov. Kim Reynolds’ bill aimed at addressing Iowa’s health care workforce shortages, and the lack of care available in rural Iowa. The legislation would consolidate Iowa’s current five student loan repayment programs and increase funding from $4.2 million currently to $10 million. The loan repayment program would be open to any person who commits to practicing in high-demand areas of Iowa for five years, even if they were trained out-of-state.
The measure also would increase the medical training available in-state through an increase of a projected 115 new residency slots at Iowa teaching hospitals, with the Iowa Department of Health and Human Services directed to attempt to draw down $150 million in federal funding for the expansion. The University of Iowa and Broadlawns Medical Center, two teaching hospitals in Iowa, would provide the state match for that federal funding, Reynolds’ legislative liaison Molly Severn told lawmakers Tuesday.
“Fully implemented over four years, 460 new physicians will be trained right here in Iowa,” Severn said.
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There are several other components to the legislation, including another directive for Iowa HHS to seek approval from the federal government for Medicaid rate flexibility “with the goal of incentivizing creative regional partnerships,” allowing 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 allocate $642,000 to increase rates for providers serving mothers and infants.
Overwhelmingly, advocates representing health care professionals spoke in favor of the legislation. Seth Brown with the Iowa Medical Society said the bill takes several of the suggestions members of his organization made on how to address health care shortages in Iowa.
“The workforce shortage has been a top issue for our members for a while now,” Brown said. “We released a set of recommendations in (2024) about what would move the needle, and most notably, the physician residency slots was top, and then incentives for those training in Iowa was the second. So having these in there was very important for us, and we appreciate it.”
A majority of concerns brought up in the bill were about changes to the loan repayment program — specifically, professions covered by current loan repayment programs that would be no longer necessarily be defined as a “eligible health care professional” in the new legislation. Advocates representing physical therapists, social workers and nurse anesthetists, said they were concerned workers in their organizations currently utilizing the state’s loan repayment program would no longer be able to access the program.
The legislation defines an eligible health care profession as “health care occupational categories that are in high demand,” determined using a list created and maintained by Iowa HHS. The list may include, but is not limited to physicians, physician assistants, registered nurses, nurse practitioners, nurse educators and mental health professionals.
Iowa HHS Director Kelly Garcia said the department is planning to hire a health care economist that will work with other HHS workers, as well as the Division of Insurance, to conduct an analysis on where there are physician shortages and where there are shortages in other professional and clinical areas.
Garcia said this approach will “deepen our work quite considerably,” as Iowa HHS currently primarily assesses shortages “through a Medicaid lens,” she said. She said the list of high-demand health care professions and areas is currently in development, and that more information on the methodology of the list will be released when it’s finalized.
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She said this information will help HHS and lawmakers find how best to allocate money through the loan repayment program to address health care shortages in Iowa — information that is currently not being collected or used.
“Today, largely, many of those programs today are first-come, first-serve,” Garcia said. “And so there’s really not an analysis today on like, ‘where does (the funding) need to go?’ And 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 clearer lens into that.”
Sen. Molly Donahue, D-Cedar Rapids, said she was still concerned on “transparency” regarding the funding of the measure. Garcia said the only state cost to the program is the increase to the loan repayment program, and that other components would be financed through federal dollars and private-public partnerships.
Garcia previously said the state aims to launch the new medical residencies by July 1, though requests for federal funding and changes have not been finalized. Iowa HHS posted its public notice Tuesday seeking changes to reimbursement rates for acute care hospital graduate medical education (GME) payments under Medicaid, a change that would require approval by the Centers for Medicare and Medicaid Services.
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