It was a busy summer for the South Dakota Association of Healthcare Organizations (SDAHO) Advocacy Team. The announcement of the Rural Health Transformation Fund opportunity, multiple legislative summer studies, and the hospital and rural health clinic Medicaid methodologies have all been ongoing for the last several months. Additionally, the team is gearing up for our Fall Legislative Forums that will kick off at the end of October.
Federal Update
At the time this is being written, the federal government is on day 21 of the shutdown without a real end in sight. The biggest disagreement they are having is over health care subsidies, which is also delaying extensions of telehealth waivers. Hopefully an agreement can be made soon to extend the waivers (and hopefully make them permanent down the road) and extend enhanced premium tax credits.
The Rural Health Transformation Fund is starting to come to the application point, which is November 5. The State issued an RFI earlier this fall, which SDAHO members provided input through for ideas on how they could utilize the funding. Additionally, the State has held community listening sessions where they have heard additional input from community members across the state. At this time, the State is planning to submit for $200 million per year for 5 years. The main buckets seem to be workforce, access to care, technology, behavioral health, innovative care delivery, and chronic disease prevention. Once the State gets their approval, SDAHO will share information with members on how funding can be applied for, what funding is available, for who, etc.
State Legislative Update
The Comprehensive Property Tax Task Force spent the summer trying to drop owner occupied property taxes by at least 50%. At times, there were proposals that included removing the state sales tax exemption for hospitals. As of the time this is written, those ideas have been removed from the proposals. However, some proposals still include across the board cuts to the State general fund, which could have a large impact on health care providers. SDAHO will continue to monitor anything that comes out of this committee to ensure health care providers maintain adequate funding levels.
The Emergency Medical Services Interim Committee held their final meeting on October 21. The committee is recommending bringing legislation to allow local EMS programs to decide who operates their ambulances and allow Medicaid to cover treatment in place. Their recommendations will go to the executive board to decide if they will go into the 2026 Legislative Session as a new bill.
Hospital and RHC Methodology
The proposed hospital methodology that is set to go into effect on January 1 was supposed to have a rules hearing on October 7. However, the Rules Committee delayed the package until a separate hearing on November 12th. The delay comes from concerns over 19 critical access hospitals that are projected to lose money after the change. Additionally, communication of the change has not gone as planned, leaving many of those who are losing money in the dark. It remains to be seen if the Committee will pass this rules package in November. At the same time, DSS has proposed a new methodology for Rural Health Clinics and Federally Qualified Health Centers. That will take additional dollars, which will be hard to come by this year with the current outlook of the state revenues. SDAHO will continue to advocate for adequate funding and increases for Medicaid providers, but in a tight budget year we will prepare to keep rates where they are today.
What’s Next
The SDAHO Advocacy team will be holding Legislative Forums across the state to bring our members and legislators together. Additionally, we continue to prep for the 2026 Legislative Session. For more information about the forums, or anything else included in this update, please reach out to Jacob.Parsons@sdaho.org.
