$572M in Back Pay at Stake as Ohio Nursing Homes Await Medicaid Repayment Decision

Ohio nursing homes are still waiting for clarity after the Ohio Supreme Court ruled that the state underpaid facilities by an estimated $572 million over a two-year period.

The dispute centers on how the Ohio Department of Medicaid calculated reimbursements under a revised payment formula. In its ruling last year, the court found the department’s interpretation of state law significantly reduced funding meant for quality incentive payments.

“The department’s interpretation does not reflect what the enacted legislation says, and it dramatically shortchanges the statutorily mandated increase to the quality-incentive pool,” the court wrote.

Ohio Medicaid argued that implementing the decision retroactively would require more than $1 billion across prior and current budget cycles. The court rejected the department’s request to reconsider its ruling.

The lawsuit was filed by LeadingAge Ohio, the Ohio Health Care Association and the Academy for Senior Health Science. The court issued a writ of mandamus, ordering Medicaid to properly recalculate and pay the required amounts.

However, there is no clear timeline for repayment.

In a recent statement, the department said it is committed to following the law and is “working through logistics,” with more updates to come. Industry leaders say the delay likely depends on whether the Ohio General Assembly approves additional funding.

“A sum of this amount would require additional appropriations,” said Susan Wallace, president and CEO of LeadingAge Ohio.

Looking ahead, lawmakers have affirmed Medicaid’s calculation method in House Bill 184, meaning additional back payments will stop once the measure takes effect March 20. Future reimbursement rates will not increase under the ruling.

Ohio has about 926 Medicaid-certified nursing homes serving roughly 66,000 residents. Medicaid covers about 65% of nursing home residents statewide.

If the back payments are eventually issued, providers say the funds could help stabilize operations, invest in staffing and support facilities still struggling with rising costs.