California skilled nursing providers are in a battle royale to restore hundreds of millions of dollars in state funding cuts from the Workforce and Quality Incentive Program (WQIP) as the clock ticks closer to deadlines for the legislature to pass a state budget.

In July 2025, the state budget cut WQIP, eliminating $300 million in state and federal funding for skilled nursing facilities (SNFs). Corey Egel, director of public affairs, California Association of Health Facilities (CAHF), said these incentive payments go to long-term care centers that meet workforce and quality-related benchmarks, dollars they can invest back into patient care and the workforce that makes that care possible through workforce recruitment and retention efforts and facility improvements.

Presently, CAHF and its members are continuing to work with state leaders throughout the remainder of the budget process to advocate for “restoring these critical workforce investments and protecting access to skilled nursing care for Californians who depend on it,” he said.

That process will see Gov. Gavin Newsom (D) release his May budget revisions today (May 14), and then the state legislature will convene their budget committees and negotiate additional changes. The legislature must pass a state budget by June 15, which would then go into effect on July 1.

Advocacy Rolls On

Egel said the advocacy effort to restore WQIP funding remains “very active” as state budget negotiations continue. CAHF and the Support Skilled Nursing Patients coalition are engaging with legislators, the Newsom Administration, healthcare partners, labor representatives, patient advocates, and community stakeholders to emphasize the importance of preserving these workforce investments that benefit caregivers and patients.

“Our outreach – with the support of 19 other partner organizations - has focused on ensuring policymakers understand the real-world impact these proposed cuts would have on patient access to care, workforce stability, and the broader healthcare system,” Egel said.

Coalition members have participated in meetings with lawmakers, coordinated grassroots advocacy, shared provider and caregiver stories, and mobilized support from across California that recognize the vital role skilled nursing facilities play in caring for medically complex and vulnerable patients.

State Needs Workers

He said the conversation around WQIP is also closely connected to broader healthcare workforce challenges facing California, including caregiver shortages and increasing pressure on hospitals and post-acute care providers.

“The coalition’s message has been consistent: these programs help providers recruit and retain caregivers, invest in staff training and development, and strengthen quality improvement efforts that directly benefit residents and patients,” Egel noted.

SNFs will receive WQIP payments in calendar year 2026 for care provided in calendar year 2025. Unless the WQIP is restored in the state budget, there will be no quality payments for SNFs in 2027, and possibly beyond, contingent upon the future construct of a new rate agreement with the state’s Medicaid agency.

“CAHF continues to engage with the administration to secure broader SNF rate methodology reform which will be included in the 2027-28 state budget process,” he added.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.