The Ohio General Assembly approved a budget correction measure this week that includes a $527 million payment to resolve litigation with nursing home operators over Medicaid rate calculations.. The bill,now headed to Governor Mike DeWine for signature, also tackles other spending adjustments before the fiscal year ends.

Ohio’s $527 Million Nursing Home Settlement Details

The settlement allocates $310 million from the state budget, while the remaining $565 million needed to fully satisfy the claim is expected from federal sources,according to the legislative text. nursing homes argued that the state’s rebasing formula failed to account for patient complexity, shortchanging facilities that serve the most medically vulnerable residents.

Supreme Court Ruling Triggers $527 Million Liability

In September, the Ohio Supreme Court ruled that the flawed formula left nursing homes underpaid by $527 million for the 2024‑25 budget cycle . The court’s interpretation suggested the state could owe an additional $285 million per year, potentially nearing $1 billion over two budget cycles, as reported by the legislature.

Federal Funding Covers Majority of the Settlement

Under the correction measure, the state will contribute $310 million, but the bulk of the $565 million shortfall is slated to come from federal Medicaid fnuding. This split reflects the broader fiscal strategy to limit the state’s outlay while still satisfying the court‑mandated payment.

Legal Waiver Tied to Acceptance of Funds

Providers that accept the settlement must waive any future legal claims related to the disputed reimbursement formula, a stipulation designed to close the litigation loop and prevent further lawsuits, according to the bill’s language.

Open Question: Will Federal Funds Arrive on Schedule?

While the legislation earmarks federal money to cover most of the settlement,it remains unclear when those funds will be disbursed and whether they will be sufficient to meet the $565 million shortfall.. The source does not specify the timeline or any conditions attached to the federal contribution.