Nursing-home group suing Youngkin administration over Medicaid reimbursements

The Virginia Health Care Association-Virginia Center for Assisted Living is suing the Youngkin administration over its sketchy move to ignore nursing facility direct care base rates directed by the state budget that was approved by the General Assembly in April.

“We had hoped it would not come to this, but VHCA-VCAL members have an obligation to exhaust every opportunity, including legal action, to ensure the care Virginia’s nursing home residents rely on for 24/7 support is funded appropriately,” Keith Hare, president and CEO of VHCA-VCAL, which is bringing suit against the Virginia Department of Medical Assistance Services.

The healthcare folks say DMAS is relying on an attempted veto by Gov. Glenn Youngkin of a portion of the budget bill requiring the agency to implement new base rates for reimbursement to nursing homes.

“The governor’s unconstitutional veto is having a serious impact on the ability of nursing homes to hire and retain staff. This is especially distressing as we know robust Medicaid funding is critical for continued quality care for Virginia’s seniors. Virginia must continue to invest in Medicaid nursing home care, not undermine efforts intended to boost the nursing workforce,” Hare said.

The 181 nursing home petitioners that have signed onto the suit include for-profit and not-for-profit providers, multifacility organizations and single site, standalone providers.

VHCA-VCAL advocated for a base rate methodology change during the 2025 General Assembly session, saying too many nursing homes face a funding gap between the cost of care and what Medicaid pays because the Medicaid base rate remains too low.

Per VHCA-VCAL, 39 percent of Virginia’s nursing homes are reimbursed less under Medicaid than they already spend on nursing staff.

Modifying the base rates by increasing the percentile of cost coverage decreases the number of nursing homes that face this funding cap for resident care.

According to VHCA-VCAL, seven in ten individuals in nursing facilities in Virginia rely on Medicaid for their care.

“This legal action is really about patient care for some of our most vulnerable fellow citizens. It is imperative that nursing homes have the resources they need to appropriately staff facilities and provide their residents with the high-quality care they deserve,” Hare said.