State ex rel. LeadingAge Ohio v. Ohio Dept. of Medicaid

2025 Ohio 3066
CourtOhio Supreme Court
DecidedSeptember 2, 2025
Docket2024-1075
StatusPublished

This text of 2025 Ohio 3066 (State ex rel. LeadingAge Ohio v. Ohio Dept. of Medicaid) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. LeadingAge Ohio v. Ohio Dept. of Medicaid, 2025 Ohio 3066 (Ohio 2025).

Opinion

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as State ex rel. LeadingAge Ohio v. Ohio Dept. of Medicaid, Slip Opinion No. 2025-Ohio-3066.]

NOTICE This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.

SLIP OPINION NO. 2025-OHIO-3066 THE STATE EX REL. LEADINGAGE OHIO ET AL. v. OHIO DEPARTMENT OF MEDICAID ET AL. [Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as State ex rel. LeadingAge Ohio v. Ohio Dept. of Medicaid, Slip Opinion No. 2025-Ohio-3066.] Mandamus—Writ sought to compel Department of Medicaid and its director to recalculate and pay nursing-home quality incentive payments according to formula set forth in R.C. 5125.26—Department and directory failed in their duty to apply R.C. 5125.26 as enacted by General Assembly—Writ granted but request for attorney fees and expenses denied. (No. 2024-1075—Submitted April 1, 2025—Decided September 2, 2025.) IN MANDAMUS. __________________ The per curiam opinion below was joined by KENNEDY, C.J., and FISCHER, DEWINE, BRUNNER, DETERS, HAWKINS, and SHANAHAN, JJ. SUPREME COURT OF OHIO

Per Curiam. {¶ 1} Medicaid pays the cost of nursing-home care for Medicaid recipients based on several factors. One is the nursing home’s per diem “rate for direct care costs,” which is periodically reassessed through a process called “rebasing.” Another factor is the nursing home’s per diem “quality incentive payment rate,” which is used to determine how much the nursing home receives from a pool of funds (the “quality-incentive pool” or “pool”) and is proportionate to the quality of care the nursing home provides relative to other nursing homes. {¶ 2} The General Assembly recently decided to prioritize the quality incentives. In the 2024-2025 biennial budget legislation, it amended the statutory formula that is used to determine the amount to allocate to the quality-incentive pool. The formula shifts the total Medicaid reimbursement for nursing homes more toward the quality incentive payment rate by mandating that 60 percent of the increase in funding from rebasing be allocated toward the quality incentive payment rate, with 40 percent of the increase allocated toward the base rate paid to each nursing home. {¶ 3} Respondents, the Ohio Department of Medicaid and Maureen M. Corcoran, the department’s director (collectively, “the department”), applied this amended law and recalculated the quality-incentive pool. But relators, LeadingAge Ohio, Ohio Health Care Association, and the Academy of Senior Health Sciences, Inc. (collectively, “the associations”), assert that the department did not follow the formula the legislature had prescribed for determining the size of this pool. In calculating the amount to allocate to the pool, the department used the increase in the price of care, claiming that this was the same as the increase in the rate for direct care costs. The associations seek a writ of mandamus on behalf of their member nursing homes to force the department to recalculate the amount of money allocated to incentivize high-quality care and to follow the formula the legislature prescribed when it does so.

2 January Term, 2025

{¶ 4} The associations insist that this money should be allocated according to the text of the statute—R.C. 5165.26(E). The department counters that it has already done so, stating that its interpretation is in line with the intent of the General Assembly. The department has also filed a motion to dismiss this case as moot because the funds appropriated by the 2024-2025 biennial budget legislation have expired. We deny the motion to dismiss, and because the department’s interpretation deviates from the text of the statute, we grant the writ. I. FACTS AND PROCEDURAL HISTORY {¶ 5} There are approximately 926 Medicaid-certified nursing facilities in Ohio that provide medical and personal care to about 66,000 individuals, most of whom are elderly. Medicaid pays for the care of approximately 65 percent of all residents in Ohio nursing homes through a daily payment rate for each day of care a resident receives in a facility. The statutory scheme for calculating how much Medicaid will pay a particular nursing home for each day of care it provides is complex because of the various factors that go into the determination. This case deals with only two of the many factors—the “rate for direct care costs” and the “quality incentive payment rate.” {¶ 6} First, the rate for direct care costs is part of the base rate that Medicaid will pay a given nursing home each day that a Medicaid beneficiary resides in the nursing home (a “Medicaid day”). See R.C. 5165.26(A)(1) (defining “base rate” as “the portion of a nursing facility’s total per Medicaid day payment rate determined under divisions (A) and (B) of section 5165.15 of the Revised Code”). The base rate is not tied to the nursing home’s performance, and the Ohio Department of Medicaid is required to update this rate every few years through a process called “rebasing,” to reflect the increases in costs over time. See R.C. 5165.01(SS). Each time the nursing homes’ base rates are rebased, the “cost per case-mix unit” increases to reflect the increased cost of care. The per diem “cost per case-mix unit” is colloquially known as the “price of care” or just the “price.” The nursing

3 SUPREME COURT OF OHIO

homes are divided into several groups, with the nursing homes of each group having similar operating costs, and the “price” is specific not to individual nursing homes but to all the nursing homes in a given group. R.C. 5165.19(C)(1). {¶ 7} To establish the rate for direct care costs for a particular nursing home within the group, the department multiplies the price of care in that nursing home’s group by the nursing home’s individualized acuity rate or “case-mix score.” R.C. 5165.19(A)(1). The case-mix score reflects the complexity of care offered at a given nursing home (and therefore the expenditure at that facility compared to the average in the group). R.C. 5165.01(H). The case-mix score is recalculated semiannually. R.C. 5165.192. The price is rebased at least every five years. In short, the price is one of the two factors in determining the rate for direct care costs, and the amount that a facility’s rate for direct care costs changes every time the price is rebased is equal to the product of the change in the group’s price and the facility’s case-mix score. {¶ 8} The second of the rates germane to this dispute is the quality incentive payment rate. The quality incentive payment rate reflects an individual nursing home’s achievement of certain quality standards. Each facility receives funds from the quality-incentive pool in proportion to the facility’s quality score. R.C. 5165.26(B). The size of the pool is determined by an equation set forth in R.C. 5165.26(E). To determine the value of each quality point in a nursing home’s quality score, the department divides the amount of money in the pool by the number of statewide Medicaid days in the previous year and by the average quality score of nursing homes in the state. R.C. 5165.26(B)(1) through (5). Thus, each of the following increases the value of each point: a lower average quality score, a lower number of Medicaid days in the previous year, and a larger pool. {¶ 9} The quality incentive payment rate of a given nursing home is the value per point multiplied by the number of points that the particular nursing home receives when it is assessed for its quality of care, i.e., its quality score.

4 January Term, 2025

R.C. 5165.26(B)(6).

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Bluebook (online)
2025 Ohio 3066, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-leadingage-ohio-v-ohio-dept-of-medicaid-ohio-2025.