Legislative session concludes; health care providers receive Medicaid increase

The 93rd South Dakota legislature concluded March 9 after a rush to finalize the state budget. As part of their final budget deliberations, legislators had to make decisions between competing interests as to how to best allocate the $18 million in anticipated additional revenues. They also considered supplemental funding requested from the governor for 2018.

In the end, legislators decided to invest the additional revenue in Medicaid provider rates, education and state employee pay. The Legislative Research Council (LRC) and the Budget & Finance Division are anticipated to release additional details in the next few weeks. (See below for a summary of the budget adjustment.)

The legislature will reconvene on March 26 to consider possible gubernatorial vetoes. Additional analysis and information will be shared as it becomes available.

General Fund Increases for Providers

FY2018

• $695,265 – Increase all providers to 90% for last three months of the fiscal year (providers in red)
• $2,002,846 – One-time bonus for direct care workers for the providers in yellow (CSPs, Nursing Homes)
• $1,655,134 – Increase community-based providers 2.0% and increase for all others (hospitals and physicians) 0.5% for the last three months of the fiscal year
• (in addition to the items above)
• $4,350,399 – Total General Fund Increase for FY2018

FY2019

• $2,719,375 – Maintain all providers at 90% for the fiscal year (as included in the Governor’s budget)
• $6,213,128 – Increase for community-based providers 2.0% and increase for all others (hospitals and physicians) 0.5% – Maintain rates consistent as described in FY2018. Once increased on April 1, 2018 and maintained the remainder of the year.
• $417,749 – Increase to Health Homes Provider Rates (agency request, not included in Governor’s budget)
• $9,350,252 – Total FY2019 General Fund Increase

• Health Care Solutions Coalition recommendations which were supported by SDAHO and its members fully funded as recommended in Governor’s budget.

• $13,700,651 – Represents the total new General Fund allocations for provider rate enhancements as appropriated by the 2018 legislature.