Spurred by Nursing Home Closures, Lawmakers Approve Ten Percent Medicaid Reimbursement Increase

Mar 13, 2019

Legislators approve a ten percent ongoing increase in Medicaid reimbursement in response to the statewide nursing home crisis. That equals nearly 18 million additional dollars. 

Loren Diekman is the president and CEO of Jenkins Living Center in Watertown. He’s followed the Medicaid reimbursement issue closely and made several phone calls to the governor’s office and legislators. He says he’s very happy about the approved increase.

“It’s going to allow us to give some much-needed wage increases to our staff," he says. "And we try to give raises every year, wage increases, but they’ve been pretty minimal. They haven’t kept up with what’s going on in the job market. So it’s gonna help us be more competitive now again in the labor force as we compete for that pool of employees that everyone else is going after as well.”

Diekman says the increase will also fund updates to the aging facility.

Jenkins Living Center is home to 143 residents, and Diekman says about 57% of them pay through Medicaid. Due to low reimbursement rates, he says the center averages a $1.3 million loss a year. But the ten percent increase is a good first step.

“This makes up about a third of the Medicaid shortfall that I experience with every Medicaid person I have in my facility. So, there’s more work to be done but we’re very appreciative of the work the legislators and the governor have done this year,” Diekman says.

The budget also includes the governor’s suggested five million dollars to seek alternative methods of long-term care. South Dakota Healthcare Association Executive Director Mark Deak is in favor of lawmakers’ call for an in-depth study on nursing home funding.

“Obviously we wanna take a look at that. See if the way we currently fund, the formula we’re currently using needs to be updated. It hasn’t been updated for decades,” says Deak.

While the increase won’t help homes that have already closed, Loren Diekman says this is a welcome boost for facilities. The reimbursement increase takes effect on April first.

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