Ohio Supreme Court Orders Medicaid Rate Recalculation for Nursing Facilities

In a long-awaited decision, the Supreme Court of Ohio ruled in favor of Ohio’s skilled nursing communities, granting a writ of mandamus requiring the Ohio Department of Medicaid (ODM) recalculate nursing facility rates beginning July 1, 2023 and forward. The ruling comes as a welcome and much-needed relief to Ohio’s nursing facilities in the midst of a challenging period of increasing costs and stagnant reimbursement.

The request for the writ of mandamus, filed on behalf of the State’s nursing facilities by LeadingAge Ohio, Ohio Health Care Association, and the Academy of Senior Health Sciences, was the result of ODM’s miscalculation of nursing facility rates following the July 1, 2023 rebasing.

House Bill 33, Ohio’s budget for state fiscal years 2024 and 2025, included a historic funding increase for nursing facilities. The budget bill required a rebasing of nursing facility rates, with the additional funding split 60% to the Medicaid quality incentive and 40% to the nursing facility direct care prices.

The crux of the writ of mandamus was the definitions of “rate” and “price” in Ohio statue. The budget bill required the total pool of additional funding to be calculated using the increase in the “rate for direct care costs due to the rebasing conducted.” ODM, however, calculated the pool of funding using the increase in the direct care price, prior to case-mix adjustments, resulting in a reimbursement shortfall of almost $300 million per fiscal year.

ODM argued the statute was sufficiently ambiguous to allow for the interpretation it used. However, in the Court’s unanimous decision, the Justices disagreed, writing that Ohio statute clearly defines “rate” and “price” and Ohio Revised Code 5165.26 clearly requires the use of the “nursing facility’s rate for direct care costs.” ODM also argued that the case was now moot, as fiscal years 2024 and 2025 had passed. Again, the Justices disagreed, stating though the funding cycle had ended, Ohio statute remains in effect.

The total impact and timeline for how ODM will administer the required changes is still unknown. The trade associations have said they will work with ODM to ensure prompt and accurate payments to providers.

Citrin Cooperman is able to calculate estimates regarding what your facility might be entitled to under the Court’s ruling. If you are interested in these or other services, or have additional questions, please contact Steven Anderson at sanderson@citrincooperman.com.