California should structure funding for skilled nursing to promote high-quality care

Mar 20, 2020 | Health

By Erika Castile | Special to CalMatters

When you work with vulnerable individuals, you notice the small things about their lives. You notice when they carry on with their ability to independently perform the routine activities of daily living. You notice when they maintain a healthy weight and a healthy outlook on life.

You notice these things, and you take pride in knowing that the work you do contributes to these positive outcomes. And you want others to not only notice, but to also acknowledge, reward and promote good quality care. This view is common among caregivers in skilled nursing facilities.

For several years, California has sought to do this in its approach to funding skilled nursing facilities for aging or disabled residents no longer able to be cared for at home. It has provided financial incentives to reward quality performance – and the result has been continuous improvements in quality ever since.

Seeking to build upon this success, Gov. Gavin Newsom’s proposed budget seeks to extend and expand upon these quality-performance incentives and provide stable Medi-Cal funding for a service that grows more vital each year.

Early in his administration, the governor ordered the creation of a state Master Plan for Aging, recognizing the demographic reality of a California in which people over age 65 are the fastest-growing segment of the population. His proposal this year for funding of skilled nursing homes is in keeping with his commitment to support vulnerable populations.

There is no service in the health care arena in which Medi-Cal plays a more critical role than in long-term care. Because Medicare offers only extremely limited long-term care benefits, it falls to Medi-Cal to fill the void for low-income and middle-income Californians. Indeed, Medi-Cal is the primary funding source for two-thirds of all individuals being cared for in skilled nursing facilities across the state.

It is essential in this aging state that California structures its funding for skilled nursing care in a way that promotes high-quality care. Taxpayers deserve nothing less, and for the hundreds of thousands of Californians who rely on that care, it is vital.

Since initiating performance incentives in 2004 under a law known as AB 1629, California has led the nation in providing person-centered, quality care.

In reviews conducted by the federal Centers for Medicare & Medicaid Services, California ranks among the top three states in the entire country when comparing performance using all 31 of the Centers quality measurements. For instance: It is first in residents maintaining their ability to perform daily activities such as eating, dressing and bathing; first in lowering depressive symptoms; second in maintaining a healthy weight; second in limiting the number of injurious falls.

The Newsom administration’s proposal to extend this program of tying reimbursement of facilities to the quality of care they provide will promote good care, provide greater value to taxpayers and ensure the financial viability of skilled nursing facilities that hire and retain capable nurses and staff.

The governor’s proposal builds on this successful formula because in addition to providing one-time payments for quality performance, it would build those enhancements into the base, year-to-year reimbursement rates for facilities that meet performance standards.

These incentives reward and encourage skilled nursing facilities to invest in more trained workers needed to provide first-rate care, and also give them the ability to finance much needed capital improvements.

There are more than 1,000 skilled nursing facilities in California. And we know – we’ve all seen the stories – that not all provide the quality of care we expect for our family members and neighbors. But by providing the right incentives for quality, with appropriate accountability in those incentives, California can make high quality care the standard in all skilled nursing facilities.

On the cusp of a “Silver Tsunami” that will deliver more than 2 million additional residents over age 65 in the next six years here in California, it is more important than ever that we continue to lead the nation in quality skilled nursing care.


Erika Castile, who started her career as a certified nursing assistant, is an executive director at Brookdale Senior Living in Carmel Valley, She wrote this commentary for CalMatters, a public interest journalism venture committed to explaining how California’s Capitol works and why it matters.

The author wrote this for CalMatters, a public interest journalism venture committed to explaining how California’s Capitol works and why it matters.



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