Skilled‑nursing providers press for WQIP restoration as DHCS crafts longer‑term financing reform

DHCS presented trailer bill language proposing a one‑year extension to the Medi‑Cal long‑term care reimbursement framework to maintain the SNF workforce standards program, the accountability sanctions program and the SNF quality assurance fee (SNF QAF) that adds more than $600 million in state revenue annually. The department said it is exploring options for a 2027‑28 SNF financing redesign, including acuity‑based rates, performance incentives and greater flexibility for plan negotiations.

Multiple senators and hundreds of public commenters urged the subcommittee to restore the Workforce & Quality Incentive Program (WQIP) or provide a temporary one‑year safety net while the administration develops its longer‑term plan. Department of Finance staff said the budget currently measures about $149 million in general fund savings tied to the WQIP elimination; stakeholders argued that restoring the program is critical to staffing, quality and preventing hospital readmissions.

The DHCS director said SNFs receive an annual guaranteed rate increase (typically 3.2–5%) and that the department has initiated a robust stakeholder engagement process with over 20 external meetings to date. Providers, unions and associations warned the proposed cuts risk layoffs, reduced hours, clinic closures and degraded quality of care; several CNA speakers and facility administrators testified that WQIP funds directly support frontline staffing and training.

DHCS said it has begun the process and will be working with counties and stakeholders on the redesign but could not offer a final financing proposal at the hearing. The subcommittee held the item open for further analysis and requested additional fiscal modeling on restoration costs and workforce impacts.