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AB 835

Medi-Cal: skilled nursing facility services.

2025-2026 Regular Session Introduced by Lisa Calderon

Expands Medi-Cal performance-based directed payments to SNFs regardless of network status, with retroactive 2024 payments and new annual targets, per federal rules.

In committee: Hearing postponed by committee.
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Bill Summary · AB 835

AB 835 — Medi‑Cal: skilled nursing facility services (Calderon) — Summary

Status: Introduced Feb 19, 2025. Most recent action: Hearing postponed in Assembly Appropriations (May 23, 2025). Previously passed Assembly Health (Do pass, 4/22/25) and re‑referred to Appropriations suspense file.

Purpose / Intent

Amend California’s Workforce and Quality Incentive Program under the Medi‑Cal Long‑Term Care Reimbursement Act to expand eligibility for performance‑based directed payments to skilled nursing facilities (SNFs) regardless of whether the facility is in a managed‑care plan’s network, and to clarify related payment, reporting, and implementation rules. The bill also makes a minor, technical change to a separate juvenile dependency custody provision.

Key provisions and changes

  • Removes the requirement that a skilled nursing facility be a “network provider” of a Medi‑Cal managed care plan to qualify for performance‑based directed payments under the Workforce and Quality Incentive Program.
  • Requires retroactive calculation and payment (subject to federal directed‑payment eligibility conditions) of those performance‑based directed payments based on the total number of days a facility provided services to Medi‑Cal beneficiaries, effective July 9, 2024.
  • Directs the Department of Health Care Services (DHCS), subject to annual Budget Act appropriation, to:
    • Target aggregate performance‑based directed payments of $280,000,000 for calendar year 2023.
    • For 2024–2026, set targets equal to the prior year’s target plus a specified annual increase tied to an existing statutory formula (references Section 14126.033).
    • Make a one‑time increase no sooner than Dec 31, 2023 per existing statutory adjustment (Section 14126.032); that one‑time increase is excluded from future base calculations.
  • Requires DHCS (in consultation with industry, labor, consumer advocates, and plans) to set methodologies, eligibility criteria, milestones and metrics (at least two workforce‑related) for directed payments; DHCS may use models authorized under 42 C.F.R. §438.6(c).
  • Exempts freestanding pediatric subacute facilities and certain “special program services for the mentally disordered” (already receiving supplemental payments) from these directed payments.
  • States that directed payments must be supplemental (not supplant existing plan payments), and that managed‑care capitation rates must be actuarially sound and account for the directed payments.
  • Requires compliance with federal directed‑payment rules (42 C.F.R. §438.6(c)) and authorizes DHCS to require reporting from plans and providers; authorizes contracting (including with California’s Medicare QIO) and provides procurement exemptions for such contracts.
  • Makes nonsubstantive technical edits to juvenile temporary‑custody statutory language.

Who is affected

  • Skilled nursing facilities: Expands eligibility so SNFs that are not in a plan’s network can receive workforce/quality directed payments for Medi‑Cal beneficiary days.
  • Medi‑Cal managed care plans: Must follow directed‑payment processes, adjust capitation rates actuarially, and may be responsible for retroactive payments and reporting.
  • DHCS: Responsible for program design, target setting, data collection, contracting, and federal compliance; funding is subject to the annual Budget Act.
  • State budget and federal partners: Potential fiscal implications and need for federal approvals for directed‑payment arrangements.

Timing / Implementation considerations

  • Program period: Applies to managed‑care rating periods beginning Jan 1, 2023 through Dec 31, 2026.
  • Retroactivity: Payments may be calculated retroactively to July 9, 2024, but are subject to federal eligibility and guidance for directed payments.
  • Fiscal authority: Payments require appropriations in the annual Budget Act; capitation adjustments must be actuarially supported.
  • Federal approval: Implementation hinges on meeting federal Medicaid/Medicare rules for directed‑payment models.

Potential impacts (summary)

  • Increases the pool of SNFs eligible for performance payments, potentially boosting workforce/quality investments at non‑network facilities.
  • May increase Medi‑Cal managed care plan payment obligations and state budget exposure (retroactive payments and higher targets), pending appropriation and federal authorization.
  • Aims to align payment incentives with workforce and quality goals across more SNFs while maintaining safeguards that payments be supplemental and compliant with federal rules.

Compiled from official sources — confirm details with the bill’s official record.

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