Columbus, Ohio — Six months after the Ohio Supreme Court ordered the state to repay nursing homes up to $1 billion in Medicaid quality incentive payments, those checks still haven’t arrived. And as of this week, the path to getting paid just got a lot more complicated.
Ohio’s nursing home operators have been caught in a two-front squeeze: a state that won’t pay what a court says it owes, and new federal and state budget pressures that are reshaping the entire reimbursement landscape beneath their feet. Industry groups say the combination is pushing already-strained facilities toward a financial edge.
How Ohio Got Here
The dispute traces back to a formula. Ohio calculates nursing home Medicaid payments in two parts — a base cost rate, and a quality incentive that rewards high-performing facilities. When the state recalibrates those base rates every few years, nursing homes argued Ohio was applying the quality incentive to the wrong number, systematically shortchanging facilities that care for the most medically complex residents.
The Ohio Supreme Court agreed. In September 2025, the court issued a writ of mandamus — a binding order — directing the state to recalculate and pay the correct amounts. Ohio’s Department of Medicaid estimated the bill at about $572 million for the prior two-year budget cycle, with another similar amount owed for the current period. Added together, providers and advocates pegged the total at somewhere near $1 billion.
The court denied the state’s request to reconsider. It also denied Ohio’s attempt to pause enforcement. But months later, nursing homes still haven’t seen the money.
“To date, they have not provided any indication of when — or if — they intend to comply,” Scott Wiley, CEO of the Ohio Health Care Association, said earlier this year.
The Deadline That Changes Everything
Making matters more urgent: a new state law takes effect Thursday that will permanently close the door on future accumulation of back payments. House Bill 184, signed by the Ohio General Assembly late last year, locks in Ohio Medicaid’s original — and disputed — payment formula going forward. Nursing homes will still be owed for past underpayments, but the clock stops ticking as of now.
Providers who haven’t yet received the money are also facing a surprise tax problem. Because many facilities operate on an accrual accounting basis, their accountants are advising them they may have to report the unpaid funds as income — creating a tax liability on money that hasn’t landed in their bank accounts.
“We also sincerely hope state officials will not put themselves in a position of risking contempt by failing to comply,” Wiley told reporters.
Federal Pressure Compounds the Problem
Ohio’s situation is being watched closely because it’s a preview of what could happen elsewhere. Industry reports indicate Ohio is the only state currently navigating both overdue quality incentive payments and sweeping reimbursement restructuring at the same time.
“Ohio’s situation appears to be unique,” said Susan Wallace, president and CEO of LeadingAge Ohio. “To our knowledge, no other state is dealing with overdue QIPs and changing reimbursement policy simultaneously.”
That complexity comes as federal Medicaid funding faces its own uncertainty — a dynamic that’s straining state budgets and leaving less room for one-time repayments of this magnitude. The growing pattern of Medicaid payment deferrals and withholdings at the federal level is already rattling operators who depend on reliable state reimbursement to keep their doors open.
Ohio has roughly 926 Medicaid-certified nursing homes. Wallace says that if the payments do ultimately come through, facilities would use the funds to reinvest in staffing, operations, and care infrastructure — areas where many have had to cut back.
“If these payments go through, they’ll have the opportunity to reinvest that in the operations, into staffing and other critical support,” she said.
For now, though, Ohio’s nursing homes are waiting. The court has spoken. The law takes effect tomorrow. And the state still hasn’t moved.
