Ohio Addresses Medicaid Fraud and Nursing Home Disputes

Ohio State Auditor Keith Faber has raised significant concerns about Medicaid fraud during a Capitol Hill hearing. Faber highlighted substantial inefficiencies in the system, allowing ineligible individuals, including deceased persons, to receive benefits. He pointed out that, in 2020 alone, over $455 million was paid to those not eligible for Medicaid, urging urgent measures to prevent further misuse of taxpayer funds.

In response to related issues, Ohio lawmakers approved an $875 million payment plan. This action came after the Ohio Supreme Court determined the state had used an incorrect reimbursement formula for Medicaid to nursing homes, resulting in substantial underpayments. The correction is part of a budget adjustment bill now awaiting Governor Mike DeWine’s signature. This initiative aims to resolve longstanding disputes with payments to skilled nursing facilities, which date back to the 2024-2025 budget period.

State Representative Jean Schmidt expressed concern over the previous handling of these payments, emphasizing the need to correct past wrongs. She acknowledged the importance of supporting facilities that play a vital role in ensuring elderly residents’ quality of life.

In September 2025, the Ohio Supreme Court ruled that the state’s calculation method for certain Medicaid quality payments was flawed, leading to significant underpayments. The Court ordered a reevaluation of what providers were owed, impacting future reimbursement formulas.

Lawmakers addressed these financial obligations with a more expensive solution than initially anticipated. The package allocates $875 million, sourced from $310 million in state funds and $565 million federally, to rectify the issue.

Ohio compensates nursing homes based on a daily rate for Medicaid residents and offers additional funds to those achieving certain quality standards. Facility operators claimed that the original calculation did not suffice for the medical needs of residents, resulting in decreased payments for facilities caring for more critical cases.

The need for recalculation has increased financial stakes. Ohio Medicaid warned of potential costs spiraling $285 million more annually, with the possibility of nearing $1 billion over two budget cycles if calculations proceed under the court’s mandate.

Legislation also stipulates that providers who accept the settlement must relinquish future legal claims concerning the disputed calculations.

Scott D. Wiley of the Ohio Health Care Association urged Governor DeWine to sign the bill, highlighting the critical importance of these funds to healthcare providers and the families they serve.