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Senate hearing spotlights nursing-home reimbursement gap tied to federal PDPM change
Summary
LeadingAge Ohio urged the Senate Finance Committee to add a technical fix to the budget to prevent an unintended cut to nursing facility reimbursement tied to the state’s transition from RUGs to PDPM case-mix scoring.
Chair Serino and members of the Senate Finance Committee heard detailed testimony Tuesday that a technical omission in the budget could mean immediate cuts to nursing home reimbursements as Ohio shifts from the RUGs case‑mix system to the federal PDPM system.
The concern, raised by Susan Wallace of LeadingAge Ohio, is that statutory language governing nursing facility reimbursement still refers to the old scoring method. "Right now everything related to nursing home reimbursement is spelled out in the Ohio Revised Code in explicit detail," Wallace told the committee, arguing the department of Medicaid lacks the statutory flexibility to make a conversion administratively.
Wallace said the change would be budget‑neutral in intent but, as drafted, would translate to an average loss of about $70 per resident per month across the state and potentially “hundreds of millions of dollars” system‑wide if left unaddressed. She described a conversion factor approach that would lift PDPM average scores (about 1.4 under PDPM) to the funding level historically associated with RUGs (about 3.0). Her group proposed amendment SC 2858 to authorize a conversion multiplier to prevent an immediate effective cut.
Committee members asked how quickly the conversion should occur. Wallace recommended an immediate statutory fix to avoid an “immediate, effective cut,” while noting the Department of Medicaid had proposed a multi‑year phase in. Wallace and other providers also said they had previously advocated for stop‑loss protections that were not included in the current drafts.
Several senators pressed on whether the department could fix the issue in rule rather than statute. Wallace said nursing home reimbursement in Ohio is unusually detailed in statute and that rulemaking may not provide the required legal cover; she recommended a statutory fix to provide clarity and protect providers. Committee members asked for follow‑up from the Department of Medicaid and legal counsel about administrative flexibility.
The testimony laid out two clear policy risks: operational disruption for providers who rely on stable rates, and a budgetary ambiguity that providers say was not reflected in the director’s budget testimony. Wallace identified amendment SC 2858 (PDPM technical conversion), and two PACE‑related amendments (2619 and 02/1955), as legislative vehicles to address the issues. No committee vote or formal action occurred during the hearing.
Restoring explicit statutory language or adding the conversion factor amendment would leave rate‑setting mechanics to the department while preventing an unintended immediate reduction in provider payments. The committee asked the parties to provide additional data to inform legislative drafting and to consult the department’s legal counsel on whether rulemaking could substitute for statute.
Wallace closed by asking senators to consider the potential impact on providers and to protect nursing facility reimbursement as the state transitions case‑mix systems.
