Ohio State Auditor Keith Faber brought significant attention to extensive Medicaid fraud in Ohio during his testimony at a Capitol Hill hearing. He described how poor oversight led to billions of dollars being lost, with ineligible individuals, including the deceased and people enrolled in multiple states, exploiting the system. In 2020 alone, Ohio paid over $455 million in Medicaid benefits to these ineligible recipients. Faber stressed the urgent need for action to curb further misuse of taxpayer funds.
Meanwhile, Ohio lawmakers approved an $875 million financial package to resolve a disagreement over Medicaid reimbursements for nursing homes. This decision followed a ruling by the Ohio Supreme Court, which found that the state had used an incorrect formula for calculating reimbursements, resulting in nursing homes being underfunded by hundreds of millions of dollars. The payment package, which is now awaiting approval from Republican Governor Mike DeWine, aims to correct this significant underpayment issue and provide funds for quality care.
Representative Jean Schmidt expressed grave concern over the underpayments, labeling it as a major oversight against those providing care to elderly residents. The court ruled in September 2025 that a miscalculation in quality payments for Medicaid had led to large deficits in provider payments, demanding a recalculation of what was owed to them.
The financial settlement of $875 million includes approximately $310 million from the state and $565 million in federal support. It provides a solution that exceeds the amount determined in the court ruling. Nursing homes in Ohio receive daily rates for residents covered by Medicaid, with additional payments for meeting certain quality standards. Operators noted the state’s failure to accurately reflect the medical needs and complexities of their patients in reimbursement calculations. Although the reimbursement formula was later corrected, the state remained liable for discrepancies in older budget cycles.
The court proceedings had highlighted the potential for costs to soar, with Ohio Medicaid predicting possible annual costs rising by about $285 million compared to original legislative intentions, potentially approaching $1 billion across two budget periods.
Under the new legislation, nursing home providers agreeing to the settlement must forgo future legal claims over the payment formula. Scott D. Wiley, CEO of the Ohio Health Care Association, encouraged Governor DeWine to promptly enact the bill, emphasizing the critical importance of these funds for Ohio’s providers and the families dependent on them.