Indiana’s 496 Nursing Homes Haven’t Been Paid Since December — And CMS Is the Reason Why

Indianapolis, Indiana — Nearly 500 nursing homes across Indiana haven’t received routine Medicaid payments since December — not because the state isn’t willing to pay, but because the federal government hasn’t signed off on the math.

The total amount owed now stands at roughly $462 million, representing two missed quarterly payments that were supposed to flow through Indiana’s PathWays for Aging program, the state’s managed care initiative for long-term services. A third payment is approaching in June, and providers say there’s no sign the backlog will clear in time.

At the center of the delay: the Centers for Medicare and Medicaid Services hasn’t approved Indiana’s payment methodology for fiscal year 2026. Without that sign-off, the state can’t release the funds.

A Snowball Operators Can’t Stop

For large, well-capitalized systems, missing a quarterly check is painful but survivable. For smaller operators, it’s becoming a crisis.

Jeff Huffman, chief operations officer for The Strategies — a company running five facilities in the state — said the ripple effects are already hitting vendors and suppliers.

“The feds are in no hurry. So we’ve now missed our December payment and our March payment heading into our June payment,” Huffman said. “The only people this is really hurting are folks that are smaller companies, newer companies. We don’t get paid, so we have to slow pay our vendors, and it kind of snowballs.”

Indiana Health Care Association President Paul Peaper said he’s hopeful the state and federal government can reach a resolution quickly, though specifics on timing remain unclear. The state is reportedly exploring a potential “grandfathering” option to get at least some funding moving.

A Complicated Federal Backstory

The delays aren’t just bureaucratic lag. The One Big Beautiful Bill Act, passed by Congress in mid-2025, added new complexity to how the underlying payment calculations are supposed to work — complicating an already messy managed care transition.

PathWays for Aging moved long-stay nursing home residents into managed care as part of a broader restructuring of Indiana’s Medicaid program. Indiana has since recognized the problems that shift created: a new state law passed in February 2026 will move long-stay nursing home residents back to a fee-for-service model starting in 2027. But that fix won’t help anyone waiting on checks today.

The payments in question amount to roughly $1 billion annually to nursing homes statewide — not a marginal line item, but the core of how most facilities cover the cost of caring for Medicaid residents.

A Familiar Pressure Point

The Indiana situation is a sharp illustration of a broader dynamic playing out in nursing homes across the country. Low Medicaid reimbursement rates have long forced facilities to make difficult choices — and when payments stall entirely, those choices get even harder. Industry reports have repeatedly documented how financial pressures from delayed or inadequate Medicaid payments push nursing homes to limit admissions, creating downstream problems for hospitals trying to discharge patients to post-acute care.

For now, 496 Indiana nursing homes are waiting — hoping CMS moves faster than the calendar does.