The South Dakota House of Representatives on Wednesday defeated a bill that would have allowed nursing facilities to transfer or sell nursing bed capacity.

SDAHO opposed House Bill 1003, which emerged from the summer Interim Committee on Regulation of Nursing and Assisted Living Beds. The bill emerged from the House Health and Human Services Committee last week but failed in the full House Wednesday on a 16-53 vote.

The bill would have allowed a licensed nursing facility to transfer or sell nursing bed capacity to another facility, which would have to license the beds within 24 months. The receiving facility would have been required to have an annual minimum Medicaid occupancy rate of no less than 50 below the statewide average at the time rates are established for the newly licensed beds and have an approved program or affiliation with a home and community-based care provider.

Rep. Wayne Steinhauer, R-Hartford. the bill’s sponsor, said that although the state has enough nursing home beds, there are often geographical shortages when an outgoing hospital patient’s family looks for a bed close to home. House Bill 1003 would have left the state’s request for proposal (RFP) process to license new beds in place, but Steinhauer sought to add “a little bit of free enterprise” so beds could be sold and transferred to where they are needed.

Rep. Jean Hunhoff, R-Yankton, spoke in opposition to bill, saying if South Dakota is not comfortable with the RFP process, the Legislature should work on changing it to provide a quicker turnaround time. Hunhoff said long-term care in the state is not free market, as 60 to 70 percent of the beds are price fixed. She said nursing homes in the state’s larger cities are more likely to have private-pay patients, while many rural areas have higher Medicaid patient rates. Allowing the sale of nursing home beds would benefit those homes catering to private pay patients over rural area homes with higher Medicaid populations, she said.

Rep. Karen Soli, D-Sioux Falls, who also served on the interim committee, said the need for nursing home beds resides in the state’s population centers – Rapid City and Sioux Falls – and the Department of Health will soon invite RFPs to distribute 150 new beds, which will make a huge difference. Soli said selling beds doesn’t mean the places with the highest need will get more beds, it means that the highest bidder will get the beds.

South Dakota has 110 licensed nursing homes with 6,855 licensed beds. The state’s moratorium number is 8,039 beds, leaving nearly 1,200 beds not licensed.