Several years ago, Ohio made a clear and deliberate policy choice: Medicaid reimbursement for nursing facilities would be driven by quality.
That decision did not emerge quietly. It was announced publicly, emphasized repeatedly, and framed as a defining priority of Governor Mike DeWine’s administration.
Yet today, despite measurable improvements in nursing facility quality across the state, the quality incentive pool has been significantly reduced in practice over the past three years—and will be permanently reduced as a matter of law beginning July 1, 2026.
That outcome is difficult to reconcile with what Ohio’s leaders promised.
So it is fair to ask:
What happened in Ohio?
The Starting Point: 39th in the Nation
Governor DeWine did not shy away from the problem he inherited.
As he publicly acknowledged in early 2023, Ohio ranked 39th in the nation on key nursing facility quality measures. That ranking was unacceptable—to policymakers, to providers, and to families relying on the system.
In response, the Governor made nursing facility quality and accountability a central priority of his administration. The issue featured prominently in his January 31, 2023 State of the State Address, and continued to appear in subsequent speeches and initiatives, including the creation of the Nursing Facility Quality and Accountability Task Force.
Notably, when the Governor later addressed the full biennial budget, he began his remarks with approximately five uninterrupted minutes focused solely on nursing homes and quality of care.
This was not incidental. It was intentional framing.
The Promise: Expectations Are a Two-Way Street
That framing carried directly into House Bill 33, the biennial budget governing the 2024–2025 fiscal years, effective July 1, 2023.
Working together, the Governor and the General Assembly amended Revised Code Chapter 5165 to intentionally shift nursing facility reimbursement away from a flat base rate and toward quality-based incentives earned only by facilities meeting defined performance criteria.
The purpose was explicit: To make quality the central driver of Medicaid reimbursement.
Governor DeWine described that bargain plainly when he signed the budget into law:
"Expectations are a two-way street. If a nursing home takes care of its residents exceptionally well, well then, they will be rewarded with more funding."
That statement captured the deal Ohio was offering.
The Provider Community Took Ohio at Its Word
Ohio’s nursing facility providers did not treat these statements as aspirational rhetoric.
They took both the Governor and the General Assembly seriously.
Over the past several years, providers:
- Invested heavily in staffing and clinical leadership
- Improved compliance and survey outcomes
- Focused on measurable quality indicators tied directly to the incentive framework
And the results followed.
Ohio is no longer ranked at the bottom. By objective measures, the state now ranks near the top nationally for nursing facility quality.
That improvement did not happen by chance. It happened because providers responded to the incentives Ohio said it would honor.
The Outcome: A Promise Undermined
Despite those gains, the quality incentive pool has been materially reduced in practice, weakening the very mechanism that drove improvement.
More concerning still, beginning July 1, 2026, the quality incentive pool will be permanently reduced as a matter of law, locking in a diminished role for quality-based reimbursement going forward.
The result is hard to square with the promise that was made:
- Facilities delivering exceptional care are not being rewarded as envisioned
- The financial signal tied to quality has been muted
- The “two-way street” has become increasingly one-directional
This is not about revisiting policy debates already resolved.
It is about follow-through.
A Question Ohio Cannot Avoid
Ohio asked more of its nursing facilities—and they delivered.
They delivered based on a promise: that quality would be rewarded, not merely applauded.
Today, that promise appears to be unraveling.
So the question becomes unavoidable:
Was Ohio’s quality reset always intended to be temporary—or has a policy built on trust and performance quietly devolved into something that feels, to providers and caregivers alike, like a bait and switch?
And if so, how does the State restore credibility to a quality framework that has already proven it can work?
