06/05/2025

Ohio Senate Changes to the State Operating Budget Limits Medicaid Growth, Impacts Aging Services Providers

The Senate Finance Committee adopted a substitute version of HB96 (Stewart), the FY26-27 state operating budget, on Tuesday that would reduce the Medicaid State GRF line by 1 percent in FY26 and 1.5 percent in FY27. The Senate sub bill maintains the "trigger" language from the executive and House versions that would terminate Medicaid expansion coverage should the federal government drop the matching funds rate below 90 percent.

The bill retains the governor-proposed transition to a PDPM case mix over three years, relying only on the nursing component, and even more problematically does not include language which would make up for the difference between RUGS and case mix scores. Ohio’s current statewide average RUGS score is 3.029, while its average statewide PDPM is 1.454, representing a nearly twofold difference.  Without this adjustment, Ohio providers would see a statewide average 50% cut to the direct care portion of the rate. (Related: See Maximize Your Membership under LeadingAge Ohio news for a free PDPM analysis)

Members are encouraged to reach out to their state senator today to let them know how damaging this “de facto” cut would be to Ohio nursing homes. LeadingAge Ohio has drafted the following language, which members can tailor to their own circumstances: 

Dear Senator LAST NAME, 

My name is NAME and I am TITLE at ORGANIZATION.  I am writing to you to share an urgent concern we feel needs to be addressed in the state operating budget before it completes the legislative process, and ask that you support a budget neutral technical amendment that has been submitted for the omnibus that will correct the issue.

As you know, nursing homes that have residents with more complex or higher-acuity care needs require more nurses, aides and therapists. To account for this, the direct care portion of the reimbursement system is adjusted by a case mix index (CMI) derived from resident assessment data. The Centers for Medicare & Medicaid Services (CMS) is transitioning from an old system to the new system, called the Patient-Driven Payment Model (PDPM). House Bill 96 specifies that Ohio’s SNFs will begin to change from RUGs to PDPM July 1 of this year. 

When the Ohio Department of Medicaid crafted the language for this transition for inclusion in the executive version House Bill 96, the Department omitted a critical piece of the transition. While each system’s case mix scores range from scores of roughly 1.0 to 4.35, the current average RUGS score is significantly higher than the average PDPM score– by about twofold. This means that, without adjustment, many Ohio nursing homes will take a severe reimbursement cut based on this system change. In concrete terms, many nursing homes across the state will receive an average cut of $70 per day if the Senate bill remains unchanged.

Our technical amendment will create an adjustment  factor between RUGS and PDPM to maintain budget neutrality. 

We ask for your help in supporting this omnibus amendment, and we would love to discuss with you further at your convenience.

Thank you,

NAME

On the positive side, the Senate-version of the bill restores the Ohio Housing Trust Fund to a statewide pooled fund, and removes the House-added cap of 15,000 for private rooms, and reverts to current law of a $160 million annual cap. 

Another top concern is the elimination of two PACE amendments dealing with expansion and timely enrollment, which though cost-saving, may have been misinterpreted as an expansion of the Medicaid program. LeadingAge Ohio plans to testify this Thursday to focus on these most-urgent issues, encouraging the Senate Finance Committee to include changes in their omnibus amendment. Amendments are due this Friday, June 6 at noon.

For the complete breakdown of the Senate’s substitute version of the bill, see LeadingAge Ohio’s budget alert.

Questions regarding the bill may be directed to Eli Faes at efaes@leadingageohio.org or Susan Wallace at swallace@leadingageohio.org.