California Department of Health Care Services reworks nursing home financing mechanism to encourage better quality care, hold facilities accountable
REEDLEY – An attempt from the state to improve patient care has ushered in a new method of financing for assisted living facilities, which could put a bigger strain on local nursing homes.
A recent development to state law has called for changes on the way the California Department of Health Care Services (DHCS) finances skilled nursing facilities. These adjustments were made to motivate nursing home facilities into providing residential patients with quality care and hold them accountable when they are not.
“The state is always monitoring nursing facilities, making sure that there’s enough staff and that residents are being taken care of,” administrative assistant Kecia Friesen of Sierra View Homes Retirement Community said. “This is a way for them to try and incentivize facilities to do better.”
However, according to the retirement home’s executive director Ro Linscheid, these programs have also created a frustrating situation for nursing homes already working hard to meet state standards. She said this attempt from the state to hold more facilities accountable for patient care adds more paperwork and stress to staff already working hard to provide quality care, and the quality would be better if they could put more time into actually taking care of residents.
“I’m sure that there’s some nursing homes that are not good, that are trying to skate by,” Linscheid said. “But for the most part, the nursing homes that I know about, we are working really hard to give quality care.”
To receive their financing from the state, nursing homes like Sierra View Homes Retirement Community must meet specific metrics to qualify for directed payments through the workforce and quality incentive program (WQIP). This program is succeeding the former fee-for-service quality and accountability supplemental payment (QASP) program. In addition to incentivizing facilities to perform better, it also forces these facilities to keep track of more qualifications to ensure they keep being financed and don’t get sanctioned and fined.
“It’s burdensome to do all this, but it’s the only way [the DHCS] knows how to get the data to make their judgments or their decisions,” Linscheid said.
The metrics and scoring for WQIP payments will be calculated by the DHCS based on a facility’s performance in workforce, clinical quality and equity measurement domains. Facilities that meet a set limit in each measure—even facilities with lower ratings—are eligible to get a quality increase in their payments from a $280 million state allocation towards the program. Facilities that hit an even higher mark have the opportunity to receive a greater per diem—by the day—award through the program.
However, according to Linshceid, regardless of how hard a facility might work to meet those metrics, there is no guarantee they will receive funding for quality improvement. Not only that, but if something is missed or not achieved in the measures, the facility will not receive any funds and will be sanctioned, earning itself a fine.
A big part of WQIP is to incentivize nursing homes to maintain and work towards a higher staff-to-patient ratio and lower staff turnover. This is in part of an overall state goal to reform nursing facility financing and make improvements to patient care.
WQIP differs from QASP by accounting for about four percent of Medi-Cal reimbursement to skilled nursing facilities with an annual growth that will increase in its funding amount until 2026. The former QASP only accounted for about one percent of these reimbursements to facilities.
Additionally, WQIP is intended to be distributed more broadly than QASP was, according to DHCS. This is because with WQIP, a stronger workforce and quality improvement are a core part of reimbursement for facilities and give facilities a better chance at earning the funds, regardless of their overall rating. This is different from the operations of QASP, which granted bonuses in smaller amounts only to the highest performing facilities.
According to DHCS, some key objectives for reforming the financing process for nursing facilities are to better incentivize and hold skilled nursing facilities accountable for quality patient care; emphasize the critical role of workforce; bring a better balance distribution of annual rate increases; and result in the long-term financial viability of skilled nursing facilities under Medi-Cal.
The reworking of the nursing home financing process came about in 2022 through Assembly Bill (AB) 186, otherwise known as the nursing facility financing reform. The reformed WQIP was developed along with the workforce standards program and the accountability sanctions program.
The workforce standards program is focused on labor-management cooperation and setting basic standards for worker’s wages and other benefits, according to DHCS. These standards include, but are not limited to, maintaining a collective bargaining agreement, which is a contract established through negotiations between union representatives and an employer, or paying prevailing wages, or a fixed hourly wage for workers in a specific occupation like nursing facilities. Through the accountability sanctions program, facilities that don’t meet the quality standards established by these programs can be sanctioned and fined by the DHCS.