Skilled Nursing Facility Value Strategy
DHCS is developing a comprehensive value strategy for Medi-Cal Skilled Nursing Facility (SNF) services to inform the reauthorization of the Medi-Cal Long-Term Care (LTC) Reimbursement Act (Welfare & Institutions Code (WIC) 14126, et seq.) for dates of service on or after January 1, 2027. The Medi-Cal Long-Term Care Reimbursement Act governs the overall Medi-Cal financing framework for Freestanding SNFs, and its upcoming renewal provides a historic opportunity to continue building on the CalAIM LTC Carve-in and the AB 186 Nursing Facility Financing Reform programs. The SNF Value Strategy will include a landscape analysis of payment methodologies utilized by Medi-Cal, Medicare, and other payers and a Multi-Year Roadmap to drive system transformation and integration over a five-year horizon. DHCS will engage with stakeholders throughout the development of the SNF Value Strategy.
DHCS has proposed the following guiding principles for the SNF Value Strategy. These guiding principles may be subject to further revision and refinement through the stakeholder engagement process.
- Whole-Person Care and Care Coordination: Coordinating and integrating care through the Medi-Cal managed care delivery system to provide whole-person care to members with institutional level-of-care needs and support the development of comprehensive Managed Long-Term Services and Supports (MLTSS).
- Quality Accountability and Incentives: Holding SNFs accountable for providing high quality patient care and incentivizing quality improvement while reducing health disparities in alignment with and furtherance of DHCS’s Comprehensive Quality Strategy.
- Care Transitions and Financial Alignment: Creating financial incentives for the delivery of care in the right setting, including appropriate transitions between hospitals, SNFs, and HCBS settings.
- Workforce Investment and Accountability: Emphasizing the critical role of workforce as a key driver of quality patient care, and holding facilities accountable for using Medi-Cal funds to provide fair compensation and benefits to workers.
- Financial Sustainability and Efficiency: Provisioning services economically and efficiently to support the financial sustainability and affordability of California’s health care system.
- Access and System Integrity: Supporting adequate access to skilled nursing facility care, including in rural areas, and removing perverse incentives in resident admissions, transfers, and discharges.
DHCS has selected Mathematica and Myers and Stauffer as consultants to support this work.
Stakeholder Engagement
DHCS is convening a Stakeholder Advisory Workgroup to aid in the development of the SNF Value Strategy. The individuals selected to participate in the Workgroup were selected through a public call for nominations and are intended to reflect the complexity and breadth of the SNF system, including facility operators and administrators, managed care plans, facility workers and labor representatives, consumer advocates, patients and family members with lived experience, and long-term care clinicians and policy experts.
In addition to convening a dedicated Workgroup, DHCS will provide regular updates to stakeholders through periodic all-comer webinars and through other existing stakeholder forums.
Related Work
LTC Reimbursement Rates
Current LTC reimbursement rates and policy information is available on the Long Term Care Reimbursement webpage.
CalAIM LTC Carve-In
As part of the CalAIM initiative, DHCS standardized and integrated coverage of LTC services by Managed Care Plans statewide effective January 1, 2023 and January 1, 2024. Visit the CalAIM LTC Carve-in webpage for more information.
Nursing Facility Financing Reform (AB 186)
DHCS implemented several new Nursing Facility Financing programs pursuant to AB 186 between 2022 and 2024 including the Workforce & Quality Incentive Program (WQIP), Workforce Standards Program (WSP), and Accountability Sanctions Program (ASP). The future of these programs, as well as lessons learned, will be considered as part of the SNF Value Strategy. To access historical materials related to this work, visit the Nursing Facility Financing Reform (AB 186) webpage.
Stay Connected
To receive updates on the SNF Value Strategy and relate programs, sign up for the e-mail distribution list.
Questions
To submit questions about the SNF Value Strategy, send an email to: SNFValueStrategy@dhcs.ca.gov., or by mail to the following address:
Department of Health Care Services
Attention: Chief, LTSS Financing Branch
Fee-For-Service Rates Development Division
1501 Capitol Avenue, MS 4600
P.O. Box 997417
Sacramento, CA 95899-7417
