Nursing Homes Settle $24M Medicaid Lawsuit in Rhode Island

Rhode Island reached a settlement with 59 nursing homes that sued the state over Medicaid reimbursement cuts, averting a potential $24 million cost to the state over three years.

Under the terms of the consent order, Medicaid rates paid to the state’s nursing facilities — for both managed care and fee-for-service — will increase by 1.5%, effective July 1. The rates will increase again, this time by 1%, on October 1.

In addition, a proposal in Gov. Gina Raimondo’s fiscal 2019 budget that would have eliminated retroactive eligibility for applicants seeking Medicaid long-term care (LTC) coverage will not be enacted. It would have amounted to an 8.5% cut in reimbursement rates, according to the Providence Journal.


The settlement caps a wild ride for Rhode Island officials and operators. In April, the 59 nursing homes won a Superior Court judgment that found for several years, Rhode Island calculated Medicaid rates for nursing homes using a method only intended to be used for one year.

The ruling could have cost the Ocean State as much as $24 million, but the state missed a deadline to appeal the decision. Gregory Hazian, who was handling that case for the state, has since resigned.

Under the consent order, the ruling by Superior Court Judge Jeffrey Lanphear in the nursing homes’ favor is dismissed with prejudice and no attorney fees or costs to any party.


James Nyberg, the director of LeadingAge Rhode Island, which represents not-for-profit providers, expressed appreciation for the settlement.

“LeadingAge appreciates the efforts put forth by all parties involved to reach a mutual agreement that will enable nursing homes to focus on providing quality care to their residents,” he said in a statement emailed to Skilled Nursing News.

Rhode Island joins several other states that have seen pushback from providers against low Medicaid rates in recent months, including Texas and Montana.

Written by Maggie Flynn

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