The House Health and Human Services Committee on Tuesday defeated a bill that would have brought nursing home rate equalization to South Dakota.
Rep. Susan Wismer, D-Britton, said her goal in sponsoring HB 1197 was to adopt a system in which nursing homes charge private-paying residents the same rate for services as Medicaid eligible recipients. Wismer said residents in her district told her they can go over the Minnesota or North Dakota borders and secure private-pay beds cheaper than in South Dakota.
The South Dakota Association of Healthcare Organizations opposes the bill.
Debra Owen, SDAHO’s vice president of state and federal relations, said rate equalization may sound like a fair and reasonable concept, but South Dakota has yet to reimburse providers to actual costs of care and the bill would cause South Dakota nursing homes to close their doors.
Owen said North Dakota and Minnesota are the only two states that use rate equalization, but North Dakota receives 34 percent higher reimbursements and Minnesota receives 27 percent higher reimbursements. South Dakota’s Medicaid gap is about $30 million.
Minnesota has had a rate equalization law since 1976. Under the statute, facilities must provide equal services to nursing facility residents, regardless of payer source, and cannot charge private paying residents more or less than the rate paid by the state under Medicaid.
Under the South Dakota bill, the Department of Social Services would have been required to verify for the federal government that state funding could meet the statutory Medicaid requirements.
Mark Deak, executive director of the South Dakota Health Care Association, said the organization opposes the bill because it contains no funding mechanism to equalize rates.
The committee killed HB 1197 by deferring to the bill to the 41st legislative day.
Wismer said she hopes that bringing the bill highlights the issue of low Medicaid reimbursement rates in the state.