Ohio Pays $875M After Shortchanging Nursing Home Care

Ohio just made things right for the people who care for some of the state's most vulnerable seniors.

Lawmakers approved an $875 million payment package Wednesday to settle a dispute that began when the state accidentally underpaid nursing homes using an incorrect Medicaid reimbursement formula. The Ohio Supreme Court ruled in September 2025 that state officials had miscalculated payments meant to reward facilities providing high-quality care.

"This is the most egregious thing we could have done to individuals that help our elderly live a quality, comfortable life," state Rep. Jean Schmidt said during the vote. "And today we are correcting that wrong."

The problem started during the 2024-25 budget cycle when Ohio calculated certain quality payments for skilled nursing facilities. Nursing home operators noticed something was off: facilities caring for medically complex residents received less money than they should have under the state's own quality benchmark system.

The operators took their case to court and won. The state Supreme Court ordered officials to recalculate what providers were truly owed, and the numbers added up fast.

The final package includes roughly $310 million from state funds and $565 million in federal funding. That's more than the court initially identified because it covers multiple budget cycles where the wrong formula was used.

Ohio pays nursing homes a daily rate for each Medicaid resident, plus bonus payments for facilities that meet quality standards. The flawed formula failed to properly account for how sick and complex patients were, meaning homes caring for the most challenging cases got shortchanged the most.

The Ripple Effect

This correction means more than just balancing the books. These funds flow directly to the facilities caring for Ohio's elderly residents who need skilled nursing care every single day.

The money helps stabilize an industry that plays a critical role in communities across the state. When nursing homes have proper funding, they can maintain quality care, keep staff properly trained, and ensure residents receive the attention they deserve.

Scott D. Wiley, CEO of the Ohio Health Care Association, called the funds "critically important to Ohio's providers and the families they serve." The bill now heads to Governor Mike DeWine's desk, where healthcare advocates are urging him to sign without delay.

Providers who accept the payment will waive future legal claims related to the disputed formula, closing the chapter on this costly miscalculation. Lawmakers have already revised the formula going forward to prevent the same mistake from happening again.

Sometimes making things right costs money, but Ohio chose to honor its commitment to the people caring for its seniors.