Ohio Lawmakers Just Approved $875 Million for Nursing Homes — With a Catch That Bars Future Lawsuits

Columbus, Ohio — The Ohio state legislature has cleared $875 million in long-overdue Medicaid payments for the state’s nursing homes, ending a yearlong standoff over a flawed reimbursement formula. There’s a string attached, though: operators who take the money must waive future legal claims tied to the disputed payments.

The measure, tucked into a larger omnibus bill, now awaits Gov. Mike DeWine’s signature. The funds represent quality incentive payments operators earned but never received because the state’s Medicaid rate calculation didn’t match what Ohio law required.

A formula that cost providers nearly a billion dollars

Ohio’s nursing facility operators argued in court that the state never rebased the Medicaid rate for inflation and never properly accounted for patient complexity. The Ohio Supreme Court agreed last September, ruling that the formula shorted nursing homes $527 million in the 2024-25 budget alone — and that fixing the calculation could cost the state another $285 million a year going forward.

The new payout combines $310 million in state dollars with $565 million from the federal government.

“Ohio’s nursing facility providers have continued to deliver high-quality care to some of our state’s most vulnerable residents while waiting nearly a year for $875 million in earned incentive payments,” said Scott Wiley, CEO of the Ohio Health Care Association, in remarks shared with industry sources.

Wiley said operators have absorbed real financial strain during the wait, delaying investments and stretching resources to keep care quality steady. Releasing the funds, he argued, will give providers the stability to reinvest in workforce and facilities.

The waiver clause changes the math

The catch is the legal release. Any operator that accepts the funds gives up future claims tied to the disputed formula — a meaningful concession given how aggressively providers fought the state in court. For facilities running on thin margins, the choice is blunt: take the money now and close the legal door, or hold out and risk getting nothing.

Susan Wallace, president and CEO of LeadingAge Ohio, said the legislature’s move reaffirms the 2025 state Supreme Court decision that found Ohio liable for past underpayments. She called the payments long overdue and said her group is looking ahead to working with the Department of Medicaid on prompt distribution.

The Ohio fight echoes a broader pattern of state Medicaid disputes squeezing skilled nursing operators, similar to the financial pressures facing operators in other states that have rolled back managed Medicaid experiments after costs spiked.

Whether DeWine signs quickly will decide how fast the money actually moves. Providers have been waiting nearly a year — they don’t appear willing to wait much longer.