Governor wants Medicaid providers to be paid at least 90 percent of costs

PIERRE--State government hasn't kept pace with costs incurred by providers of Medicaid services in South Dakota, according to an analysis by the Daugaard administration.

PIERRE-State government hasn't kept pace with costs incurred by providers of Medicaid services in South Dakota, according to an analysis by the Daugaard administration.

The most recent information, in some cases from as long ago as 2010, shows providers of seven types of Medicaid services received state reimbursements at rates less than 90 percent of their costs.

Nine other types of services fall in the 90-99 percent range. Five are at 100 percent.

Gov. Dennis Daugaard said he wants to bring the reimbursements up to at least 90 percent during the next three years.

He outlined his proposal during his budget speech to the Legislature on Dec. 8.


His recommendation for the 2017 state budget that starts July 1, 2016, calls for all Medicaid providers to receive 2.7 percent increases. Another $1,354,115 in catch-up funding would be directed toward providers below 100 percent.

That would be the first of three annual catch-up payments in his plan. He would need another $2.7 million total to complete the three-year schedule.

The money for 2017 would come from a $21.9 million savings expected in the Medicaid program because demand hasn't increased as fast as expected, and because state government's cost-share of the federal program is decreasing slightly.

Daugaard said he created a work group within his administration last summer to look at Medicaid reimbursements.

The members sifted through data from 866 providers serving approximately 48,600 people.

The services farthest behind the 90 percent mark were:

• Homemaker and nursing services at 61 percent;

• Outpatient psychiatric services at 67 percent;


• Emergency transportation at 70 percent;

• Hospitals at 78 percent;

• Other home services at 78 percent and 82 percent; and

• Assisted living services at 85 percent.

Those in the 90 to 99 percent range included several types of group care, nursing homes, several types of services for behavioral health and substance abuse, community support, senior meals and residential psychiatric care.

At 100 percent were several types of aid for independent living, foster care, transition services and community-based services.

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