A wide variety of issues were discussed Saturday at the first of two legislative Cracker Barrel meetings featuring District 17 lawmakers Sen. Art Rusch, a Republican from Vermillion and Reps. Ray Ring, a Vermillion Democrat and Nancy Rasmussen, a Republican from Hurley.
Early in the meeting, the discussion involved an issue that has grown serious in the last year across the South Dakota – the financial difficulties being felt by nursing homes across the state and the funding challenges that organizations like SESDAC, Inc. in Vermillion must face.
“I know that Gov. Noem, in her budget address, talked about a 2.5 percent increase for Medicaid providers and also pointed to some one-time funds and other opportunities there,” said Nick Oyen, executive director at SESDAC, Inc. “In this Medicaid realm, knowing that we have nursing homes and community support providers that are struggling, and I think a lot of us are struggling with staffing and funding to make that appropriate, where does this panel sit and what guidance do you have?”
“The difficulties that the Medicaid providers are having have been a constant source of conversation among the legislators,” Rusch said. “I know that the Legislature wants to do something. What they will end up doing, I don’t know. I’m not on the Appropriations Committee so I don’t know what they’re thinking about.”
Rusch noted that the Legislature is working on two budgets during each year’s session in Pierre – the fiscal year 2019 budget, which was approved by lawmakers last year and the fiscal year 2020 state budget.
“Fiscal year 2019 is now half over and so we’re trying to adjust the fiscal year 2019 budget to the realities of what actually occurred. Then we’re working on the fiscal year 2020 budget as well,” he said. “On the fiscal year 2019, the revenue was almost exactly what we had projected a year ago, but the expenses were lower. There is that extra money that was appropriated a year ago but didn’t get spent that is now available for what they call one-time grants.”
Rusch said he believes Gov. Noem intends to use some of that one-time money to help.
“As I recall, there was some one-time money for Medicaid providers in the ideas that she had. In looking at fiscal year 2020, the projections at this point are a revenue growth of $54 million and how much of that is due to the Wayfair decision, we don’t really know,” he said. “The governor’s budget proposed $11 million of that to go to additional aid to education, $11 million for Medicaid providers and then $11 million or $12 million for state employees. Unfortunately, that takes up the bulk of that $54 million increase.”
Rusch said two areas where there are some budgeted funds leftover include social services and education.
“The biggest area (of budget surplus) is the Department of Social Services because they don’t know what kind of requests they’re going to get during the year,” he said. “Almost every year, there’s a significant reversion of funds from the Department of Social Services.”
Rusch said there are some funds leftover in the Department of Education budget because of a slight inaccuracy in the estimate of students enrolled in public schools this year.
“The reason for that is they based that upon a calculation because we pay out so much per student, and there were actually 387 fewer students than they had projected a year ago,” he said. “I’ve talked with some of the superintendents and what they would like to see would be if there are fewer students, that they would divide up that same pot of money among the students who were actually enrolled. I haven’t seen anyone who has gotten a bill prepared to do that.”
“I think that a bill such as that going to Appropriations is safer than keeping it as a bill and moving it onto the floor, because if you keep it in Appropriations, it’s going to be under those people who are managing funds which could go into the final G (general) bill,” Rasmussen said, “where if you moved it to the floor, you’re going to need two-thirds of the body and that’s going to be a lot harder. So I would say that was a safety move rather than not.”
Ring noted that Gov. Noem talked about nursing homes in her budget address but didn’t talk about community support providers.
“That bothered me right away because it wasn’t clear to me whether community support providers were included in that or not. We’ve heard a lot about the nursing homes … there are a lot of people who have parents in nursing homes and the political pressure is there,” Ring told Oyen. “I don’t think there’s the same kind of pressure for your clients and I’m concerned about that.
Ring said a lawmaker has introduced legislation that would provide some funding to Medicaid providers, but he didn’t’ know the status of that bill.
“Nancy is right, it’s probably better to do this, basically giving instructions to the Appropriations Committee because when the general bill comes up, it can pass on the floor with a majority,” Ring said. “If we have an appropriations bill that comes up by itself, it requires a two-thirds vote. I think you have good reason to be concerned about whether there are people that are really looking out for your clients. Believe me, when I go to their receptions, I hear about it and I am concerned.”
“One of the complaints that I heard about the governor's budget is it calls for an additional 72 FTEs in state employment,” Rusch said. “I'm really concerned about that, but I'm also told that at least 50 of those FTEs will be in mental health and drug rehabilitation, so that certainly would indicate to me that she (Gov. Noem) intends to go that way.”
Legislators were asked whether Medicaid expansion, an option that South Dakota has refused to implement, would help with the funding problems currently experienced by nursing homes in the state.
“I don't think so; I think it may make it worse because if you expand Medicaid so there's more people covered and the state is not paying adequately to the community service providers and the nursing homes now,” Rusch said, “so if you have more people who aren't being paid enough for them (people covered by Medicare) it seems to me that makes the problem worse rather than better.”
“I’m going to respectfully disagree. The kind of Medicaid expansion I'm talking about, which we have rejected and now something like 36 or 37 states have adopted, would be matched by the federal government 90/10,” Ring said. “We would pay 10 percent plus probably some administration, and get 90 percent. Would that directly help the problem with nursing homes? I would agree that I don't think it would directly help the problem. Indirectly, if we had Medicaid covering low income people who don't have children, it would reduce the hospitals' uncompensated care.”
Ring said a study conducted after Medicaid expansion became an option to states showed there was a substantial decrease in uncompensated care in the states that had expanded.
“It would bring in millions of dollars which should stimulate the economy, so we're freeing up some hospital expenses, perhaps lower premiums for those of you who are paying private premiums,” he said, “and so I think it could probably benefit the state overall and perhaps indirectly free up some funds that could be used for compensating the nursing homes and hopefully the community service providers better than we are now.”
“I think the issue is would the federal government be able to come through with the 90 percent forever and in light that IHS (Indian Health Services) has virtually closed because the federal government was not able to bring their funding forward is an alert to me,” Rasmussen said. “If we know for certain that we're going to get 90 percent that is one issue, but looking backwards to see that IHS has folded, I just don't think that we would get the 90 percent.”
Ring got a light-hearted response from the audience while stating that he respectfully disagrees with Rasmussen, too.
“We have a new arrangement with IHS now. In the past, when Native Americans got services on the reservations at IHS hospitals, that was reimbursed 100 percent by the feds. If you had somebody who was eligible for IHS services and for Medicaid but they got the care off the reservation, then it was treated like everybody else's Medicaid, and I think it's now 47 percent state and 53 percent federal,” Ring said. “Now we have an agreement with the feds that if a Native American is referred by IHS to Avera or Sanford – as I understand it, the state has entered into agreements with these folks now – if they're referred that way, then the feds will reimburse 100 percent on that. That's going to free up a substantial amount of resources for the state.”
Ring talked about attempts several years ago by Gov. Daugaard to free up funds to expand Medicaid.
“He invited everybody in the Legislature to the governor's mansion and went through in great detail what that meant, why we could pay for it, why we could afford it and so forth. Now there were some problems with the feds not getting back in time and that eventually fell through,” he said. “But, we've got another possibility here; we're freeing up some funds and part of the question is where those funds go.
“The last I looked, what they were talking about is increasing support for nursing homes … but we are going to have some funds that could be used and take some of the pressure off IHS and some of the people who depend on IHS,” Ring said. “It's really a decision as to how are we going to use those freed up funds.”
An audience member noted that there is an administrative burden that follows such a plan to make sure that referrals are documented and that other requirements have been met to make such payments to IHS facilities possible. He noted that IHS facilities have struggled with both providing care and maintaining adequate administration.
“As I understand the governor's proposal, which is an innovative idea to make sure those referrals are properly done, is that there would be a state employee in each of those IHS hospitals to fill out the referral paperwork and make sure the paperwork got transferred to the right place,” Rusch said. “Now that's obviously going to be an administrative expense but hopefully much less than what we're losing now.”
Rusch noted that the federal government, when entering into treaties with Native Americans for vast territories, promised to provide medical care as part of those agreements.
“This is not something that the federal government is taking on,” Rusch said. “This is something that the federal government promised 150 years ago that they've not been complying with, and whether they will comply with it with cost appropriation in the future remains to be seen.”
Earlier in the meeting, the lawmakers were asked about the habit of some legislators to file “placement bills.” This year, 45 placement bills have been introduced.
“The placement bills get put in there in case somebody thinks they might need them to hoghouse an amendment on to them later on,” Rusch said. “My personal view is the bills that I think are important and that I want to get something done on -- I try to have done before the session starts and I have them ready to go.
“I’m not a big fan of the placeholding bills,” he said, “but every year there are some things that come up during the session that it’s maybe good that they could add an amendment or a bill that would address those … but 45 seems like an awful lot.”
“When I was on the Appropriations Committee, I saw how sometimes toward the end of the session when you get a better idea of how much revenue you’re going to have, you do need some flexibility and given that we’re not even halfway into the session and you can’t introduce bills, then what they do is playing games to some extent,” Ring said. “But it’s an example where, I think, if the budget looks a little more generous, then we do have an instrument there for making an amendment and accomplishing something that we weren’t sure about earlier in the session.”
“I do not have a placeholder bill but I have talked to several people who were given a placeholder bill so there is a title, there’s something to put in it which makes it different than just leaving a bill open without a title,” Rasmussen said. “One has a specific purpose for that – they just don’t have all of the language from LRC (Legislative Research Council), yet.”