(The Center Square) – A fee imposed on nursing facilities in California has been extended until Dec. 31, 2027 after Gov. Gavin Newsom signed a bill into law – ensuring the state continues to get millions of dollars to pay for Medi-Cal reimbursements.
The bill Newsom signed into law in recent weeks, Senate Bill 165, extends the already-imposed quality assurance fee on independent nursing facilities, like skilled nursing or long-term care facilities that aren’t part of a hospital system. That fee was established by a 2004 law, Assembly Bill 1629, which sought to improve Medi-Cal reimbursement rates. The fee and reimbursement rate structure would have sunset at the end of 2026.
“SB 165 helps provide stability for skilled nursing facilities and, most importantly, for the Californians who rely on them for care,” Sen. John Laird, D-Santa Cruz and chair of the Senate Budget and Fiscal Review Committee, said, answering The Center Square's questions via email. “Extending the current reimbursement and quality assurance fee structure helps ensure Medi-Cal continues to support these essential services without unnecessary disruption."
The bill also extends the reimbursement rate structure for Medi-Cal, California’s version of Medicaid. That structure reimburses medical providers that provide care for Medi-Cal patients – in this case, nursing and long-term care facility patients. Those rates vary depending on the type and location of the facility, among other factors, according to documents from the California Department of Health Care Services.
That agency, which oversees the state’s administration of Medi-Cal, did not make anyone available for an interview for this story.
“Extending this authority is essential to maintain uninterrupted Medi‑Cal reimbursement for skilled nursing and subacute care,” Anthony Cava, media relations manager for the department, told The Center Square via email. “Without it, the state would lose the ability to pay enhanced rates that help stabilize the long‑term care system and support access for Medi‑Cal members.”
The reimbursement rate structure has been a prominent issue for some in the nursing home and long-term care industry. According to a document compiled by California Advocates for Nursing Home Reform that was shared with The Center Square, California’s nursing homes have underperformed in serving residents.
This is in spite of the Medi-Cal reimbursement rates increasing from $113 per resident per day in 2001 to $404 per resident per day in 2024. California has not gotten what it has paid for, that document alleges.
“It basically just extended the current structure for another year while the state works on a more comprehensive reform bill,” Tony Chicotel, senior staff attorney for California Advocates for Nursing Home Reform, told The Center Square on Tuesday. “Because the process is taking a long time and they want to do a very thorough job and get it right, they couldn’t do it this year so they just extended the structure by another year to get more time to do this ultimate reform-minded legislation.”
Sen. Roger Niello, R-Fair Oaks and vice chair of the Senate Budget and Fiscal Review Committee, told The Center Square that the passage of the bill was ultimately positive for nursing facilities throughout the state. However, he was concerned that passing the bill, like passing the budget this year, was rushed in the Legislature – something he previously voiced apprehension about in the days before Newsom signed the state’s final budget bill into law.
“It’s a [managed care organization]-like tax that the administration proposed, with it all going to the healthcare organizations, which is a good thing,” Niello said. “I actually abstained on the bill. Everything was jammed with regard to the budget.”
