In a recent meeting of the Joint Committee on Appropriations in South Dakota, significant discussions centered around the funding and operational challenges faced by Medicaid health providers and long-term care facilities. The meeting, held on February 7, 2025, highlighted the urgent need for adequate funding to ensure the sustainability of essential health services in the state.

Key testimonies were presented by representatives from various health and social service organizations, emphasizing the critical reliance on Medicaid funding. Dan Cross, representing Community Support Providers of South Dakota, underscored that approximately 84.66% of their funding comes from Medicaid, stressing the importance of maintaining a robust funding mechanism to support services for adults with developmental disabilities. He pointed out that the current funding structure often leaves providers struggling to meet operational costs, particularly in light of rising wages and inflation.

Terry Dasch, Executive Director of the South Dakota Council of Community Behavioral Health, echoed these concerns, advocating for an increase in the inflation policy for mental health services. He noted that many community mental health centers are heavily dependent on state contracts, with 80-90% of their funding sourced from Medicaid. Dasch warned that without adjustments to keep pace with inflation, providers may face staff shortages and service reductions, potentially leading to waiting lists for vulnerable populations.

Mark Daac, Director of the South Dakota Healthcare Association, provided insights into the long-term care sector, highlighting a recent positive trend where no nursing homes closed in 2024, a stark contrast to previous years. He attributed this stability to legislative efforts to adequately fund Medicaid reimbursement rates. However, Daac cautioned that the proposed 1.25% increase in the governor's budget would not suffice to maintain the financial health of long-term care providers, which are still recovering from years of underfunding.

The meeting also addressed the potential elimination of a crucial program supporting assisted living facilities that accept Medicaid residents, which could lead to increased costs for the state as more individuals may require nursing home care. Daac emphasized the importance of maintaining support for assisted living providers to prevent a future crisis in long-term care availability.

Overall, the discussions at the Joint Committee on Appropriations highlighted the pressing need for comprehensive funding strategies to support South Dakota's health and social service providers. As the state grapples with demographic changes and an aging population, ensuring adequate resources for these essential services will be critical in maintaining the quality of care for residents. The committee's next steps will likely involve deliberations on the proposed budget and the potential impacts of funding decisions on the state's health care landscape.