South Dakota long-term care providers could be looking at significant changes if elements of an ambitious, new 2024 legislative agenda are adopted.

Recommendations could result in lucrative incentives to create regional care facilities, a new way to add census without commensurate staffing costs, the first increase in the patient personal needs allowance in 20 years and the start of a PACE program.

“This summer study really laid out the groundwork to move forward with ideas and potential solutions that are sustainable for our state’s long term care industry,” said Tammy Hatting (pictured), the chief operating officer of the South Dakota Association of Healthcare Organizations, who sat in on each of the group’s five meetings. 

“We have to be prepared for the future of our long-term care industry, not knowing what will happen with the CMS unfunded staffing mandate,” she added in an email to McKnight’s Long-Term Care News Thursday.

One of the more intriguing proposals that may be pursued in the future would involve offering cash to nursing homes within 60 miles of one another that merge. House Speaker Hugh Bartels (R) said such a plan could be a “carrot” to providers.

He said in the future a panel might consider mandating certain facilities merge under particular circumstances.

In the meantime, the Legislature may be asked to consider changing what may designate a regional nursing facility and its appropriate reimbursement levels. Potential changes in this regard could lead to the state reimbursing full capital costs of equipment, furniture and other remodeling or construction costs.

“When or if we look at regionalization, we think it’s an opportunity for nursing homes to consider remodeling or rebuilding,” Hatting said. “It’s a possible option for them.” 

Members and staff of the South Dakota Health Care Association also served on the LTC-focused committee. On Thursday, the organization’s executive director said he welcomed the committee’s focus on sustaining long-term care in the state but cautioned that its efforts might not quickly turn to action. And that means funding that builds on this year’s average 25% Medicaid increase will be critical, Mark Deak told McKnight’s.

“If the fate of past legislative interim committee recommended proposals is any indication of future results, the ultimate passage of this Committee’s proposals is far from certain,” Deak said. “What is certain, is that SDHCA’s primary focus will continue to be on the absolute need to fully fund the updated SNF reimbursement methodology that we have worked together with key state officials on since early last year.”

Among the other recommendations, the LTC workgroup urged legislative consideration for the creation of a workforce coalition to examine healthcare operators’ needs, as other states have; the creation of healthcare apprenticeships, which the state currently does not fund; funding technology grants; and expanding home-based services and increasing reimbursements for them.

The workgroup also recommended the state study and support a program of all-inclusive care for the elderly (PACE) program, which provides community-based care and services to people 55 or older who otherwise would need a nursing home level of care. 

And members recommended considering raising the patient personal needs allowance from its current $60 level, which was last amended in 2004. For every $10 monthly increase, the state would incur approximately $126,000 more in costs. The national average PNA is $62 per month; South Dakota is currently ranked 20th among all states, the panel said.

Another significant LTC change could come if the state adopts the panel’s recommendation to grant a waiver to nursing homes and assisted living facilities to take five or fewer people who are not currently residents as adult day care recipients. Modeled after a Minnesota program, this would boost smaller facilities’ revenue streams without increasing the proportional need for more skilled nursing staff.

“For facilities not using available space because of staffing issues, this offers a way to use space and generate revenue while not increasing the need for skilled nursing staff,” the panel said in its research documents.

The 22 LTC proposals the panel considered are discussed in detail here.