Ohio Department of Medicaid has yet to pay nursing homes up to $1 billion after court ruling
It’s been four months since the Ohio Supreme Court ordered the state to pay nursing homes up to $1 billion, but no payments have been made.
The Ohio Supreme Court unanimously ruled in September that the state had been using the wrong formula to calculate Medicaid payments for nursing homes and underpaying the facilities by about $527 million in the 2024-25 budget.
The court denied the Ohio Department of Medicaid’s motion for reconsideration in November, but rates have not been recalculated and money has not been paid.
But the nursing home may be required to treat the unpaid Medicaid dollars as taxable income because the Ohio Supreme Court’s ruling is final, Ohio Health Care Association CEO Scott Wiley said.
“That means they could face tax bills on money the state has still not paid, simply because accounting rules require them to recognize the revenue once the legal uncertainty is removed,” Wiley said in an email to the Capital Journal.
The nursing homes have not heard when the Ohio Department of Medicaid will issue the payments, he said.
“This creates a completely avoidable financial strain on providers who are already carrying the responsibility of caring for Ohioans in their most vulnerable moments,” Wiley said in an email.
In a statement to the Capital Journal, the Ohio Department of Medicaid said they are committed to following the law.
“We’re currently working through logistics and will follow up with any update on a timeline,” the statement read.
Ohio has approximately 926 Medicaid-certified nursing facilities that provide care to about 66,000 people, according to court documents.
Medicaid pays for 65% of all residents in Ohio nursing homes through a daily payment rate for each day of care they receive in the facility. How much the state pays nursing homes for each Medicaid resident is calculated in two parts — direct care costs and the quality incentive payment rate.
The rate for direct care costs is part of the base rate Medicaid will pay a nursing home. The Ohio Department of Medicaid is required to update the base rate every few years through a process called “rebasing.”
The quality incentive payment rate is dependent on a nursing home meeting certain quality standards. A nursing home receives funds from the quality-incentive pool in relation to their quality score, thus rewarding high-quality nursing homes.
“Each nursing home’s points determine how many slices of the pie that nursing home gets, and the value of each point determines the width of each slice of the pie,” according to court documents from September. “This case, though, is about the size of the pie itself—that is, how much money the equations in the statute allocate to the quality-incentive pool.”
In the state’s budget for the 2024-25 biennial, lawmakers changed how the Ohio Department of Medicaid allocated funds to the quality-incentive pool by requiring the department take a certain percentage of the increase in funding from rebasing and allocate it to the quality-incentive pool.
“When it calculated the pool, the department calculated into each facility’s daily valuation 60 percent of the change in the price, not 60 percent of the change in the rate for direct care costs,” according to court documents.
LeadingAge Ohio, Ohio Health Care Association, and the Academy of Senior Health Sciences filed the lawsuit against the state in 2024.
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Ohio Capital Journal is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Ohio Capital Journal maintains editorial independence. Contact Editor David Dewitt for questions: info@ohiocapitaljournal.com.