06/26/2025

Legislature Passes FY26-27 State Operating Budget, Sends to Governor for Signature

House Bill 96, the FY26-27 state operating budget, cleared both the House and Senate on June 25, 2025, after a packed week of final negotiations between the two chambers on the measure. The policy-laden spending package now heads to Governor Mike DeWine, who may consider exercising his veto powers on certain legislative-added provisions, before ultimately signing the bill by June 30.  

The budget maintains contingency language that will terminate Medicaid expansion coverage should the federal matching rate drop, and also institutes overall spending reductions in the Medicaid program that were added in the Senate version (1 percent in FY26 and 1.5 percent in FY27). 

Critically, the budget includes the LeadingAge Ohio-requested Patient Driven Payment Model (PDPM) transition language fix that was added by the Senate. Because PDPM scores are so much lower than RUGS scores (1.4 statewide average compared to 3.0 state average), a multiplier is needed to be applied to ensure budget neutrality. This multiplier would be included in the rates from January 1, 2026, until the next rebasing takes effect. Additionally, the bill maintains the executive-proposed implementation of the PDPM, using only the nursing score and phasing it in over three years, but adds clarifying language regarding which case mix scores should be used to calculate the rate settings across the biennium. 

Additionally, problematic House-added language pertaining to a cap on the private room incentive was taken out of the final bill, maintaining current law and an annual cap of $160 million, and the House-added language raising the Personal Needs Allowance from $50 to $75 was included in the final bill.

The bill also includes House-backed language intending to allow PACE organizations to provide services to individuals prior to the Medicaid application being approved. However, the Conference Committee used the uncorrected House language referencing “presumptive eligibility” despite advocacy to amend the language before passage. For this reason, it is possible that this language will be vetoed. 

Additional items included in the Medicaid portion of the budget include: 

• Add-on payment of $110 per treatment for individuals receiving dialysis in nursing facilities.
• Includes a House-added provision that would allow individuals to choose their Medicaid managed care plan, and would randomly assign individuals to a managed care plan without preference if they do not make an election.  
• Removes a House-added provision that would have required the Director to allow enrollment in non-MyCare special needs plans for duals (D-SNPs).
• Maintains the executive proposal for data collection on direct care HCBS worker wages, but requires the report to also be shared with leadership of the General Assembly. 
• Requires the Department of Insurance to examine individuals under age 65 with end-stage renal disease and identify Medicare coverage gaps for these individuals. 
• Requires Medicaid to provide notice to the legislature before seeking state plan amendments or Medicaid waiver amendments if these amendments would add either costs or grow Medicaid enrollments.
• Creates numerous reporting requirements for Medicaid, including: 
• Requires Medicaid to produce annual reports on fraud, waste, and abuse in its program; 
• Requires immediate notice to the legislature if CMS takes actions related to the quarterly Medicaid expenditure report; 
• Requires an annual report on budgeted, actual, and forecasted number of FTEs and related expenditures; 
• Requires a quarterly report to the General Assembly on the presumptive eligibility error rate; 
• Requires the creation of a managed care financial dashboard, including actuarial metrics and per-member, per-month costs;
• Includes $5 million per fiscal year for performance incentives to county JFS offices, related to renewal timeliness and accuracy. 
• Includes House-backed language that would require Medicaid and the Department of Developmental Disabilities to provide education on electronic visit verification (EVV), notify providers if a claim isn’t supported by EVV data, prohibits claims denial solely based on EVV data, and prohibits the state from instituting more-restrictive requirements than are federally required. 
• Prohibits Medicaid funds from being used for diversity, equity & inclusion initiatives. 
• Permits transfers from the Health & Human Services Fund to Medicaid to support payments for health services to providers, with the approval of the Controlling Board. 
• Requires the Auditor of State to evaluate whether individuals in the aged, blind and disabled (ABD) group are eligible for Medicaid, examining whether those individuals have countable assets that exceed the limits specified under federal law.
• Abolishes the Joint Medicaid Oversight Committee (JMOC), instead directing the Legislative Service Commission (PSC) to assist standing committees of the House and Senate that deal with Medicaid on program oversight.

Most of the Executive-proposed provisions of the Department of Aging’s budget were maintained, including: 

• Maintains executive-proposed increases to initial license fees, renewal fees and resident license fees administered under the Bureau of Executives of Long-term Services and Supports (BELTSS).
• Maintains ombudsman oversight of the MyCare Ohio successor program. 
• Maintains house-approved levels of funding for the Senior Community Services line item, including an earmark for the iConnect program. 

Please join the LeadingAge Ohio policy team for a special Advocacy in Action call on Monday, July 7, where the team will provide a complete review of the budget, including any vetoes by Governor DeWine. For questions, please contact Eli Faes at efaes@leadingageohio.org.