On June 30, 2022, Governor Gavin Newsom signed legislation to stabilize and promote the retention of California’s healthcare workforce in response to the COVID-19 pandemic. This response included the allocation of $1.3 billion for retention payments to physicians and other clinical and non-clinical healthcare workers. California’s Department of Health Care Services (“DHCS”) will administer the distribution of those funds through its Hospital and Skilled Nursing Facility COVID-19 Worker Retention Payment program (the “WRP”). The program is designed so that WRP payments will first be made to eligible employers, who then will pass through the WRP funds to individual physicians and other healthcare workers. In order to receive WRP funds, California employers must register with and provide certain information to DHCS on an expedited timeline.

Eligible employers must register with DHCS by December 21, 2022 in order to receive WRP funds. Apart from individual, independent physicians, DHCS has advised that workers should not apply directly. Instead, eligible employers must be responsible for applying for the retention payments for their qualified healthcare workers, including physicians.

Upon registering, DHCS will ask eligible registrants to submit applications with their employees’ information. DHCS will send out applications as early as November 29, 2022, and all applications are due no later than 5:00 p.m. on December 30, 2022. Given the expected volume of participation in the program and the detail involved in the application, DHCS has encouraged all potential WRP participants to register and submit all information as soon as possible.

DHCS expects to issue WRP program payments in January 2023. As described below, the WRP program is expected to make payments for physicians of up to $1,000, and non-physician healthcare workers of up to $1,500 and $1,250 total for full-time and part-time employees, respectively. If needed, DHCS may reduce the foregoing payment amounts per worker on a pro rata basis based on the volume of requests received relative to the appropriated funding for the WRP program.

Which Healthcare Employers are Eligible for WRP?

DHCS provides a glossary that employers can use to determine WRP program eligibility on behalf of their workers. Here, we highlight a few critical defined terms that DHCS uses to define the Covered Entities, Covered Services Employers, and Physician Group Entities that are eligible to participate in the WRP program on behalf of their employees.

1. “Covered Entity” means “a person or entity that owns or operates a ‘Qualifying Facility’ including the Regents of the University of California.”

2. “Covered Services Employers” means “any person or entity who directly employs or exercises control over the wages, hours, or working conditions of any person; and provides on-site services such as clerical, dietary, environmental services, laundry, security, engineering, facilities management, administrative or billing staff through a contract with the ‘Qualifying Facility’ where that person or entity is the employer of record.”

3. “Physician Group Entities” means “any legal entity that contracts with a ‘Qualifying Facility’ to provide physician services, including, but not limited to, professional medical corporations.”

4. “Other Health Clinics” means those entities that satisfy the standards of California Health & Safety Code § 1206(l) (i.e., “affiliated, owned, or controlled by a person or entity that owns or operates an acute care hospital . . . and operated by a nonprofit corporation that conducts medical research and provides healthcare to patients through a group of 40 or more physicians and surgeons, who are independent contractors representing not less than 10 board certified specialties, and not less than two-thirds of whom practice on a full-time basis at the clinic”).

5. “Qualifying Facilities” means “acute psychiatric hospitals, general acute care hospitals, skilled nursing facilities, and Other Health Clinics.”

Which Healthcare Workers are Eligible for WRP Payments? How Much Will They Receive from WRP?

How Will DHCS Determine Individual Healthcare Worker and Physician Eligibility for WRP Payments?

Workers and other physiciansproviding services in Qualified Facilitiesare eligible to participate in WRP (through the applications made by their employers) if they satisfy either of subsections (i) or (ii) below and satisfy the requirement at subsection (iii) below, meaning that they:

(i) were employed at least part-time during the qualifying work period of July 30, 2022 through October 28, 2022; or

(ii) are physicians that are part of Physician Group Entities who provided on-site services during the qualifying work period of July 30, 2022 through October 28, 2022 (whether on a part-time or full-time basis); and

(iii) continue to be employed by a Covered Entity or are a physician who continues to provide services as of November 28, 2022.

What Do “Part-Time” and “Full-Time” Mean for WRP Purposes?

Non-physician employees must have worked on either “part-time” (i.e., on-site at a Qualifying Facility for 100-399 hours during the qualifying period) or “full-time” (i.e., at least 400 hours during the qualifying period). Note that Employees who began working during the qualifying period are eligible for WRP if they satisfy the 100 hour minimum requirement for being “part-time” even if they did not work during the entire 91-day period. Also if an employee took an approved leave or participated in a labor dispute/job action during the qualifying work period and the employee would otherwise qualify based on hours normally worked on the site of a Qualifying Facility, the Covered Entity may attest that the person was considered a full-time or part-time employee on-site during that time.

How Much Will WRP Pay for Physicians?

Physicians who work on-site during the qualifying work period at a Qualified Facility through a contract arrangement between the facility and a physician group are eligible to receive up to a $1,000 WRP payment, whether or not they were providing services on a full-time or part-time basis.

How Much Will WRP Pay for Non-Physician Workers?

The base payment for an eligible full-time employee will be $1,000, and for a part-time employee, $750. However, an employee who received a bonus payment from their employer on or after December 1, 2021, or will receive a bonus payment before December 31, 2022 (i.e., hazard/bonus pay due to the pandemic, bonus pay based on financial or performance targets or performance sharing programs, or compensation in response to operational needs, such as staffing shortages or recruitment needs) can receive additional matching funds from the WRP program. Specifically, full-time and part-time employees can receive an extra $500 from WRP (for a total of $1,500 and $1,250 total for full-time and part-time employees, respectively).

What Do We Do if We Have Multiple Locations, Facilities or Entities?

Covered Entities may have multiple “Qualifying Facilities” that are eligible to participate in the WRP program. DHCS Guidance states that “Qualifying Facilities” that are part of a large network, health system, or medical group should register only once for WRP using information from their largest facility/organization (i.e., the one with the largest number of workers). If an organization has multiple affiliated entities, each entity can register and submit separate applications for the WRP. We recommend evaluating the program guidance for more details.

Final Thoughts

The WRP program offers a meaningful way for employers to act on behalf of healthcare workers, including physicians, to acknowledge and reward their hard work and dedication during the qualifying period of the COVID-19 pandemic. DHCS’ guidance suggests that it anticipates a large volume of participants, and as of November 7, 2022, DHCS had published the names of nearly 300 Qualifying Facilities, Covered Services Employers, Independent Physicians, and Physician Entities who had applied for the WRP program so far. All employers and physicians who think they might be eligible to participate should act swiftly to register and, if accepted, prepare and submit the detailed information that will be needed to complete DHCS’ application consistent with its stated timelines.