Fifty-nine nursing homes in April won a Superior Court judgment that found the state made unauthorized cuts to their Medicaid funding. The facilities argued the state for several years calculated their rates using a method that was intended to be used for only one year.
In response, the proposed $9.6 billion budget unveiled by Democratic House Speaker Nicholas Mattiello last week included an 8.5 percent cut to the facilities' Medicaid funding. Nursing home associations said Monday that cut would lead to closures and layoffs.
Under the deal, lawmakers will give nursing homes a 2.5 percent increase in funding over the next year and the nursing homes will drop the court case which could have netted $24 million. The lawsuit will be dropped as soon as Wednesday, Mattiello said.
"I believe it's in everybody's best interest," Mattiello told WPRO on Tuesday, announcing the deal.
He also called the lawsuit "meritless," even though a judge sided with the nursing homes.
"I think that they should have always addressed their concerns at the table, negotiated them and discussed it rather than running to court, so that was probably a mistake in the first place," Mattiello said on the radio program.
The cost of the rate increase would be $8.9 million, split about evenly between state and federal funds, the speaker's office said.
Virginia Burke, who heads the Rhode Island Health Care Association, which represents about 50 of the 59 nursing homes, said it's a "fair settlement" that she thinks the nursing homes will accept. Burke said they made "every effort to negotiate" with the state before filing the lawsuit.
"Obviously, we see it differently," she said, "but that difference of opinion has been settled."
The case became a source of scandal for the statehouse after it was revealed that a lawyer with the Executive Office of Health and Human Services failed to tell the agency about the court's decision and the state's deadline to appeal, which it missed.
That lawyer, Gregory Hazian, also had been removed the state's attorney rolls in January. He resigned, and state officials have asked for a criminal investigation into his conduct. He has not responded to requests for comment.
Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.