The Ohio state legislature corrected millions in Medicaid underpayments this week, approving $875 million in quality incentive payments (QIPs) to be sent to nursing homes in the state. Legislation stipulates that nursing homes who accept the money waive future legal claims related to the disputed formula.
The payout is coupled with a budget correction measure following a years-long formula error in calculating nursing home Medicaid payments. Legislators are waiting on Gov. Mike DeWine to sign the measure, which was part of a larger omnibus bill.
“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,” Scott Wiley, CEO of the Ohio Health Care Association, told Skilled Nursing News.
Wiley is encouraged to see the legislation advance and appreciates policymakers’ commitment to addressing the issue. The $875 million represents work already performed by nursing home staff, and providers have absorbed a significant financial strain in the process, he said.
Operators have had to delay critical investments and stretch resources to maintain care quality, Wiley said of state nursing homes.
“Releasing these payments will provide much-needed stability and allow providers to reinvest in their workforce, facilities and services,” said Wiley. “We look forward to Gov. DeWine’s prompt approval so these overdue funds can reach providers and strengthen the care delivery system that Ohio families rely on every day.”
Susan Wallace, president and CEO of LeadingAge Ohio, said the association looks forward to the Governor’s signature and further work with the Department of Medicaid for prompt payments to Ohio operators.
Ohio will provide $310 million, and the remaining $565 million is coming from the federal government.
Nursing home operators, along with associations OHCA and LeadingAge Ohio, argued in court that the state failed to properly calculate Medicaid rates, and facilities received less money than the state law required.
The state never rebased the Medicaid rate for inflation, operators said, and never considered each patient’s complexity in its rates. The state changed the formula but the damage was already done – the most medically vulnerable patients received less funding and the state was still liable for underpayments from previous budgets, the court ruled.
Wallace said the payments were long overdue. The legislature’s decision reaffirms quality care investments upheld by the 2025 Ohio Supreme Court decision, honoring past provider commitments while strengthening the sector’s foundation in the state.
Last September, the Ohio Supreme Court ruled that the formula failed to pay nursing homes $527 million in the 2024-25 budget alone, and recalculating payments could cost about $285 million more per year, according to a story in the Washington Examiner.
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