Ohio approves nearly billion dollar payment after court ruled state shortchanged nursing homes
Ohio Lawmakers Approve $875 Million Payment to Nursing Homes After Supreme Court Ruling
Ohio lawmakers on Wednesday signed off on a budget‑correction bill that will allocate $875 million to skilled nursing facilities that were short‑paid for Medicaid services. The settlement follows a September 2025 ruling by the Ohio Supreme Court that the state used an incorrect formula to calculate certain Medicaid reimbursements, leaving providers with hundreds of millions of dollars in unpaid claims.
The new package, which will be sent to Governor Mike DeWine for signature, earmarks $310 million from state funds and $565 million from federal resources. It is intended to reimburse nursing homes for payments that should have been made during the 2024‑25 budget cycle, as well as related periods that the court identified as affected by the misapplied formula.
“We’re correcting a mistake that deprived the people who care for our elderly,” said state Representative Jean Schmidt. “This is the most egregious thing we could have done to individuals that help our elderly live a quality, comfortable life, and today we are correcting that wrong.”
Ohio’s Medicaid program pays nursing homes a daily rate for residents who qualify for the program and provides additional quality‑based incentives. Facility operators contended that the state failed to properly account for the medical complexity of residents, which lowered reimbursement for those caring for the sickest patients. Although lawmakers later amended the calculation method, the state remained liable for payments tied to earlier budget cycles.
The Supreme Court’s decision ordered the state to recalculate what providers were owed. In legal filings, Ohio Medicaid warned that a full recalculation could cost up to $285 million more per year than lawmakers had originally anticipated, potentially approaching a total of $1 billion over two budget cycles.
Under the new bill, providers who receive the payments will be required to waive future legal claims related to the disputed formula. This requirement has been a point of contention among nursing home operators, who hope the settlement will resolve long‑standing payment disputes.
Scott D. Wiley, CEO of the Ohio Health Care Association, urged the governor to sign the legislation promptly. “These funds are critically important to Ohio’s providers and the families they serve, and we urge Governor Mike DeWine to sign HB 479 into law without delay,” he said.
The bill now heads to DeWine’s desk, where it is expected to become law after his signature. If approved, the payment will provide much-needed relief to nursing homes and their residents, addressing a significant underpayment issue that has spanned several fiscal years.