Senate Finance hearing spotlights nursing facility reimbursement shift, advocates press for statutory fix

Chair Serino and members of the Senate Finance Committee heard extended testimony from LeadingAge Ohio about a technical change tied to the federal move from the RUGS case‑mix system to the Patient‑Driven Payment Model (PDPM) that advocates say would, if unaddressed, create an effective cut to nursing facility reimbursement.

Why it matters: The change affects how resident case‑mix scores are translated into payment; LeadingAge Ohio testified this would move an average statewide nursing case‑mix score from about 3 under RUGS to roughly 1.4 under PDPM and that a conversion factor is required to avoid large swings in provider payments across the state.

Susan Wallace, speaking for LeadingAge Ohio, told the committee the problem was not deliberate. “We believe that it was an omission,” she said, and that the omission could translate into “hundreds of millions of dollars” in aggregate changes if not corrected. Wallace urged the committee to adopt an amendment (technical fix SC 2,858) that would authorize a conversion factor to translate PDPM scores to the prior funding baseline until rate‑setting can fully account for PDPM data.

Wallace described alternatives and transition approaches discussed with the Department of Medicaid, including a proposed gradual phase‑in and proposals such as stop‑loss/stop‑gain to reduce extreme swings for individual providers. “We did advocate for a stop loss, stop gain where we kind of mitigate some of that as we’re moving through that but that’s not what was included,” she said.

Senators pressed on why the change could not be fixed administratively. Wallace replied that nursing facility reimbursement rules are written in detail in the Ohio Revised Code and that the Department of Medicaid’s flexibility may be limited. “The Department of Medicaid must follow that language to the T,” she said, arguing the statute’s silence could allow interpretation that produces de facto cuts.

Clarifying details from testimony: LeadingAge Ohio and the Ohio Healthcare Association proposed a blended case‑mix approach (e.g., a proposed 70% nursing/20% SLP/10% non‑therapy ancillary blend) and recommended a conversion factor roughly in the “2‑times” range to map PDPM scores (average ~1.4) to prior funding (average ~3). Wallace said the amendment would allow the Department of Medicaid to develop the precise factor and recommended the committee weigh immediate statutory language to prevent an unintended shortfall.

The committee did not take a vote on the amendment during the hearing. Witnesses asked senators to include the technical fix in the omnibus amendment to House Bill 96 to prevent what providers called an “immediate, effective cut.”