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Bill Offers Flexibility for Nursing Home Beds in Event of Closure


In order to spur development of other long-term care options, South Dakota placed a limit on the number of nursing home beds in the state in the 1980’s. When a nursing home closes, that facility’s beds are held by the state’s Department of Health until they’re assigned to other facilities through an application process. In light of increasing nursing home closures, a senate bill seeks to add some flexibility to the process of re-allotting beds from a closed nursing home.

Senate Bill 61 allows the Department to simply hold a home’s beds for another licensed organization to take over its operations. If the home is closing due to a structural issue, the department could also hold those beds until the replacement facility is built. The bill stipulates a new facility must be built within 60 miles of the original home in towns of less than 5,000 people.

Senator Wayne Steinhauer is the prime sponsor. He says the bill allows communities more flexibility to build partnerships and retain the economic benefit of having a local nursing home. Department of Health Secretary Kim Malsam-Rysdon also supports the bill.

The lone opponent testimony comes from South Dakota Health Care Association Executive Director Mark Deak. He says the root cause of nursing home closures is low Medicaid reimbursement rates. He’s concerned Senate Bill 61 won’t ensure access for residents who rely on Medicaid.

“So under our current process, if folks do wish to build a new facility within a certain distance, they need to make sure that the Medicaid census in that facility—that they care for folks on Medicaid—that the number of folks they care for is within 90% of the state average. There’s no requirement for that in this bill,” says Deak.

In his rebuttal, Steinhauer says nursing homes can’t afford to build updated facilities if they’re forced to accept a certain percentage of Medicaid patients. He says his bill removes that financial burden and lets the market drive development.

“A nursing home’s not gonna open in Mobridge and say, ‘I’m only gonna take private pay.’ Guess what, there’s not enough private pay there! To open a nursing home you’re gonna have to take some level of mix of private pay and Medicaid. So let the market drive that. Let their financials drive that. Let’s let a little bit of free enterprise back into our system, and that’s what this bill hopes to do. Provide some flexibility,” says Steinhauer.

The Senate Commerce and Energy Committee unanimously passes the bill. It heads next to the senate floor.

Regional Health supports Education and Healthcare reporting on SDPB.