Virginia nursing homes sue state over Youngkin budget veto

More than 180 Virginia nursing homes are suing the state after Gov. Glenn Youngkin vetoed a budget provision that would have increased Medicaid funding for their facilities. The homes argue the governor’s move is unconstitutional and has left them short on money needed to hire staff and care for residents.

The Virginia Health Care Association — Virginia Center for Assisted Living (VHCA-VCAL) says its 181 members have filed petition before the Supreme Court of Virginia against the Virginia Department of Medical Assistance Services (DMAS). The industry association claims DMAS is refusing to apply a rate methodology change lawmakers approved earlier this year.

“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,” VHCA-VCAL President Keith Hare said in a statement. “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.”

Earlier this year, the General Assembly approved a state budget that directed DMAS to raise Medicaid reimbursement rates for nursing homes, a move that would have resulted in an extra $21.65 million in federal and state funding being distributed to the state’s nursing facilities.

VHCA-VCAL stated that too many nursing homes are currently facing a funding gap between the cost of care and what Medicaid pays, because the Medicaid base rate remains too low. The association said it “successfully advocated” for a rate methodology change during the 2025 General Assembly session.

On May 2, Gov. Glenn Youngkin vetoed the provision (after previously recommending its removal), saying the two-year budget already included $40 million each year for nursing homes that met or exceeded performance thresholds.

“The amendment added this year by the General Assembly would add nearly $22 million in additional annual costs,” Youngkin wrote. “Given my fiduciary responsibility to Virginia’s taxpayers, it would not be fiscally prudent for me to expand ongoing programmatic expenditures at this time.”

However, Paul Nardo, clerk of Virginia’s House of Delegates, rejected the veto, arguing that Youngkin’s veto of that provision — among others — was not constitutional. According to a letter from Nardo, Youngkin only vetoed the provisions but failed to veto the budget appropriation that contained them. Based on previous Supreme Court rulings, Nardo said, Youngkin needed to veto the entire budget item, not just a provision.

The Virginia Mercury reported in May that Youngkin disagrees with Nardo’s stance and said he intended for the executive branch to operate as if the vetoes were in effect.

The petition says that DMAS ignored the law and failed to modify its rates using the methodology the General Assembly commanded. The lawsuit asks the court to compel DMAS to increase the nursing facility reimbursement rates using the methodology required by the state legislature and accuses DMAS of “illegally” relying on an attempted veto by Youngkin.

“The governor’s unconstitutional veto is having a serious impact on the ability of nursing homes to hire and retain staff,” Hare said in a statement. “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.”

DMAS did not immediately return requests for comment.

Youngkin’s press secretary, Peter Finocchio, issued the following statement in response: “Nursing homes have received significant Medicaid rate increases in recent budgets, resulting in total payments rising $842 million since 2020. In the current biennial budget, nursing homes received $163 million in increased payments. The new rate increase of $22 million annually passed by the General Assembly in 2025 — and vetoed by Gov. Youngkin — did not link these new funds to increases in quality. Virginians deserve better. And as the governor has previously stated, he believes this veto is wholly consistent with his powers under the Virginia Constitution.”

In its lawsuit, VHCA-VCAL alleges DMAS has taken no steps to modify its calculations using the updated methodology, and that, as a result, nursing homes are receiving less in reimbursements than they should. The association says the lack of funding is harming nursing homes in the state by making it difficult to maintain staffing levels.

Like Nardo, the association argues that while the governor can veto an item within a budget bill, a governor cannot veto a condition of an appropriation without also vetoing the money appropriated.

The association says the Supreme Court of Virginia has jurisdiction to issue a writ of mandamus to compel a government official to comply with a mandatory, nondiscretionary duty.

VHCA-VCAL’s member businesses operate more than 96% of Virginia’s Medicaid nursing facility beds. According to the association, nearly seven in 10 individuals in nursing facilities rely on Medicaid for their care.

Governor launches nursing home oversight board

On Thursday, Youngkin announced a newly established Nursing Home Oversight and Accountability Advisory Board, created by executive order, with an aim of strengthening oversight of nursing homes.

The governor’s office states that the board’s goal is to advise on initiatives to raise standards across nursing homes and recommend policies and practices that improve residents’ well-being and overall quality of care. The advisory board is expected to send the governor an annual report, which includes recommendations on budgetary, legislative and administrative measures.

“Supporting the needs of our older adults remains a top priority for my administration,” Youngkin said in a statement. “This initiative will carefully evaluate the full spectrum of aging and caregiving challenges, focusing on creating well-rounded solutions that address care deficiencies and improve access for our seniors.”

The 20-member board includes professionals with expertise in health care, direct care, advocacy, law and community service.

In addition to the advisory board, Youngkin’s August executive order directs the state’s health department to develop and maintain a publicly accessible nursing home information portal by Nov. 15, which will display inspection and survey results, disciplinary actions and key facility performance metrics. Youngkin says the aim of the portal is “to provide Virginians with clear and transparent insight into nursing home quality and compliance.”