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LeadingAge Ohio urges technical fix to avoid Medicaid cuts for nursing facilities
Summary
LeadingAge Ohio told the Senate Finance Committee a change tied to CMS's PDPM case-mix system would produce an effective, immediate cut to nursing facility reimbursements unless the General Assembly adopts a statutory conversion fix; the group proposed amendment SC2858 to the omnibus budget.
Chair Serino and members of the Senate Finance Committee heard detailed testimony from Susan Wallace of LeadingAge Ohio on a technical reimbursement problem the group says is embedded in the budget language for nursing facilities. Wallace told the committee the change moves Ohio from RUGS-based case-mix scoring to the PDPM system used by CMS and that, without a statutory conversion factor, providers will see an immediate funding reduction.
"For this piece, we would advocate for it being changed immediately because it would be an immediate, effective cut," Wallace said, urging senators to add a legislative fix. She said the group is asking the committee to include amendment SC2858, a "technical fix" that would allow the Department of Medicaid to translate PDPM scores into a funding level comparable to the RUGS-era case mix.
Why it matters: nursing facility reimbursement in Ohio is tightly specified in statute, Wallace said, and the Department of Medicaid may lack administrative flexibility to reconcile the measurement change without legislative direction. LeadingAge presented a conversion example to show the scale: the average statewide RUGS case-mix score has historically been about 3, while the comparable PDPM nursing score averages about 1.4. "We would essentially have to create a conversion factor that brings that 1.4 up to a 3 kind of funding level," Wallace said, describing roughly a twofold factor.
Wallace told senators the omission appears unintentional and, if left unaddressed, could mean swings for individual providers ranging from substantial losses to gains even if the overall change is budget-neutral. She described alternative transition tools that were not included in the Senate language '1 such as a stop-loss/stop-gain mechanism and a blended-case-mix proposal '1 but asked the committee to prioritize the technical fix to prevent a de facto cut.
Senators pressed on whether the Department of Medicaid could solve the issue by rule rather than statute. Wallace responded that Ohio statutes for nursing facility reimbursement contain an unusual level of detail, which limits administrative flexibility. She and other witnesses said they would welcome the Department clarifying whether a rule-based fix is possible, but asked the Legislature to adopt the amendment to ensure providers are protected.
The committee also heard that the amendment would permit the Department to set an appropriate conversion factor using its data; LeadingAge said its own methodology indicates a multiplier "in the 2 point something" range. Wallace said the group would continue discussions about the other transition proposals (a blended rate and stop-loss protections) if lawmakers are interested, but asked senators not to let the technical omission create an unintended cut.
What the committee can do next: LeadingAge requested that the omnibus budget include the technical amendment (SC2858) and that lawmakers restore or consider the previously discussed stop-loss/stop-gain and blended-rate language when time allows. The testimony identified the Department of Medicaid and the actuary work used for rate-setting as parties that would operationalize any statutory conversion.
The testimony was discussion-focused; no formal motion or vote on the amendment occurred in the hearing.
