AB 165 California Assembly · 2025-2026 Regular Session

Skilled nursing facilities: reimbursement rates.

This bill (AB 165) is a procedural measure expressing the Legislature's intent to enact statutory changes related to the Budget Act of 2025. It does not specify the exact changes or directly affect any particular group. The bill serves only as a formal statement of legislative intent, not as a substantive policy change. No specific provisions, mechanisms, or affected parties are described in the provided abstract.

Bill status passed 3 of 5 stages cleared

Introduction

Jan 2025

Committee Review

Jun 2026

Assembly Passage

Mar 2025

Senate Passage

Governor

Introduced Jan 8, 2025 Last action Aug 6, 2026

Maddy AI version diff · 2 comparisons

What changed between versions

06/26/26 - Amended Senate → AB165 · 6 edits

MODERATE

AB 165 extends the skilled nursing facility reimbursement framework by one year. The quality assurance fee, rate methodology, and related provisions that were set to expire on December 31, 2026 are now extended through December 31, 2027, with repeal dates pushed from January 1, 2028 to January 1, 2029. The labor cost increase provisions in paragraph (20) are also extended to cover the 2027 calendar year for both facilities that meet and do not meet workforce standards.

Scope change

The bill's scope remains the same (skilled nursing facility Medi-Cal reimbursement rates), but its temporal applicability is extended by one year across all key provisions: the quality assurance fee collection period, the rate methodology implementation period, and the labor cost increase schedule all now run through calendar year 2027 instead of ending in 2026.

TIMELINE

The quality assurance fee on skilled nursing facilities now ceases to be assessed after December 31, 2027 instead of December 31, 2026 (Section 1324.29(a)).

Article 7.6 of the Health and Safety Code (quality assurance fee provisions) becomes inoperative after December 31, 2027 instead of December 31, 2026, and is repealed on January 1, 2029 instead of January 1, 2028 (Section 1324.30).

The Medi-Cal Long-Term Care Reimbursement Act rate methodology ceases to be implemented after December 31, 2027 instead of December 31, 2026 (Section 14126.033(e)).

Section 14126.036 (sunset provision for the entire article) becomes inoperative after December 31, 2027 instead of December 31, 2026, and is repealed on January 1, 2029 or when the director certifies closeout activities are complete, whichever is later.

FISCAL

For facilities meeting workforce standards, the labor cost category rate increase is extended to cover the 2025, 2026, and 2027 calendar years (previously only 2025 and 2026), with up to 5 percent annual increases based on audited costs trended forward.

For facilities not meeting workforce standards, the labor cost category rate increase is extended to cover the 2024, 2025, 2026, and 2027 calendar years (previously only 2024, 2025, and 2026), with up to 5 percent annual increases.

01/08/25 - Introduced → 06/26/26 - Amended Senate · 8 edits · Jun 26, 2026

MODERATE

AB 165 was transformed from a placeholder bill expressing legislative intent into a substantive amendment extending the skilled nursing facility quality assurance fee and Medi-Cal Long-Term Care Reimbursement Act rate methodology by one year, from December 31, 2026 to December 31, 2027. The bill also extends the 2026-2027 calendar year reimbursement rate provisions to include 2027, adds a new closeout certification mechanism, and declares itself an urgency statute to take effect immediately. This matters because without the extension, the fee-based funding structure for skilled nursing facility Medi-Cal rates would have lapsed on January 1, 2027.

TIMELINE

The quality assurance fee assessment end date is extended from December 31, 2026 to December 31, 2027 (Section 1324.29 of the Health and Safety Code).

The inoperative date for Article 7.6 (quality assurance fee provisions) is extended from December 31, 2026 to December 31, 2027, and the repeal date is extended from January 1, 2028 to January 1, 2029 (Section 1324.30 of the Health and Safety Code).

The rate methodology implementation end date in Section 14126.033(e) is extended from December 31, 2026 to December 31, 2027.

The inoperative and repeal dates in Section 14126.036(a) are extended from December 31, 2026 / January 1, 2028 to December 31, 2027 / January 1, 2029.

FISCAL

The 2026 and 2027 calendar year reimbursement rate provisions in Section 14126.033(c)(20) are extended to cover both 2026 and 2027, adding a full additional year of the workforce-adjusted rate structure for skilled nursing facilities.

REQUIREMENT

A new subdivision (b) is added to Section 14126.036 providing that the section shall be repealed on January 1, 2029, or on the date the director certifies to the Secretary of State that all necessary closeout activities have been completed, whichever is later.

ENFORCEMENT

The bill is declared an urgency statute under Article IV of the California Constitution, making it take effect immediately rather than on July 1, 2026. The stated necessity is to extend and maintain financing and reimbursement structures supporting skilled nursing facilities and ensure continued access to long-term care.

TECHNICAL

The vote requirement changes from majority to two-thirds, and the fiscal committee designation changes from 'no' to 'yes', reflecting the bill's new substantive content involving ongoing program funding.

Floor votes · Assembly Mar 20, 2025

How they voted

52–17

Passed · 10 other

Total votes 79

Mar 20, 2025

D Democratic59

52 Yea 7

88% Yea

R Republican20

17 Nay 3

85% Nay

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Jun 29, 2026

Upper · Passed

From committee: Do pass. (Ayes 13. Noes 0.) (June 29).

upper

Jun 26, 2026

Introduced

From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on B. & F. R.

upper

Apr 2, 2025

Committee

Referred to Com. on B. & F. R.

upper

Mar 20, 2025

Lower · Passed

Read third time. Passed. Ordered to the Senate. (Ayes 53. Noes 17. Page 745.)

lower

Feb 3, 2025

Committee

Referred to Com. on BUDGET.

lower

Jan 9, 2025

Lower · Passed

From printer. May be heard in committee February 8.

lower

0 primary · 0 co-sponsors

What changed between versions

How they voted

Actions timeline

Sponsors