California Gov. Gavin Newsom (D)
Photo by Hans Gutknecht/MediaNews Group/Los Angeles Daily News via Getty Images
California Gov. Gavin Newsom (D)
Photo by Hans Gutknecht/MediaNews Group/Los Angeles Daily News via Getty Images

California skilled nursing providers are calling on Gov. Gavin Newsom (D) and his administration to come up with a new funding plan for SNFs after he proposed a $280 million cut in base pay in a push to reform its financing system. 

“It is stunning that the state government would choose to cut its investment in skilled nursing facilities that provide care to its most vulnerable residents,” said Craig Cornett, president and CEO of the California Association of Health Facilities, in an op-ed published Tuesday by CalMatters. 

Newsom first unveiled his proposed 2022-23 state budget in January, which includes a proposal to reform SNF financing from its current framework of a “primarily cost-based methodology to one that incentives value and quality.” 

“The intent of these reforms is to further enable nursing facilities to invest in quality and patient care while assuring the long-term financial viability of these essential Medi-Cal providers,” the budget document states. 

In mid-May, the governor offered additional details to the reform plans and proposed $280 million for the new Workforce and Quality Incentive Program for payment to facilities that meet quality benchmarks or make substantial improvements.

“A long-term funding framework that assures the long-term financial viability of these vital Medi-Cal providers is predicated on enabling nursing facilities to invest in quality patient care, improving workforce retention, and empowering the voices of essential workers responsible for the health and safety of nursing home residents,” the document states. 

The state’s budget is also expected to have an unprecedented $97 billion surplus this year once passed by lawmakers later this summer. 

“If the budget proposal is adopted, skilled nursing facility owners would face the last option they would want to consider — cutting wages during an unprecedented worker shortage,” Cornett noted. 

He said the budget proposal does include some “well-intentioned” new quality incentive programs but operators can’t pay base wages based on “potential incentive awards.” He warned that the funding reduction for the program would likely result in lower wages, fewer beds for residents and facility closures. 

He also suggested that Newsom work with providers to develop an alternative funding proposal that will “protect base [pay for SNFs], support operators and [their] employees in this inflationary environment and preserve access to skilled nursing care.”

“After two years of paying for increased protections against COVID-19, dealing with double-digit inflation and providing higher wages for our health care workers, the proposed state funding cuts would be a devastating blow to these facilities, their patients and staff,” he said.