Ohio lawmakers approved an $875 million payment package on Wednesday to resolve a dispute over Medicaid reimbursements for nursing homes. The funding, included in a budget correction bill, follows a September 2025 Ohio Supreme Court ruling that found the state used an incorrect formula to calculate certain Medicaid quality payments, resulting in hundreds of millions in underpayments to skilled nursing facilities. The package, which now heads to Republican Gov. Mike DeWine’s desk, includes $310 million from state funds and $565 million in federal funding.
Background and Context
Ohio pays nursing homes a daily rate for Medicaid residents, with additional payments for facilities meeting quality benchmarks. Nursing home operators argued the state failed to account for the medical complexity of residents, reducing reimbursements for facilities caring for the sickest patients. The court ordered the state to recalculate payments tied to the 2024-25 budget cycle.
Reactions and Implications
State Rep. Jean Schmidt (R) called the underpayment "the most egregious thing we could have done to individuals that help our elderly live a quality, comfortable life," adding that the payment corrects a wrong. Meanwhile, Ohio State Auditor Keith Faber warned of widespread Medicaid fraud, citing $455 million in benefits paid to ineligible recipients in 2020 alone. Faber urged immediate action to prevent further taxpayer waste, though this issue was not directly tied to the nursing home payments.
Policy and Legal Context
The House GOP launched a task force to probe alleged $250 billion in Medicaid fraud in Ohio, though the nursing home payment dispute was unrelated. The payment package exceeds the amount identified in the court ruling, reflecting the state’s broader financial obligations. A federal judge also recently blocked a Biden administration nursing home staffing mandate, though this was a separate legal matter.