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Daugaard says no to pursuing Medicaid expansion

Gov. Dennis Daugaard delivers his State of the State address on Jan. 12. On Tuesday, Daugaard said he won't pursue an expansion of Medicaid in 2017 after a conversation with Vice President-elect Mike Pence.

PIERRE | The 2016 meeting of the South Dakota Legislature may end up being the resurrection session.

Declared nearly dead early this week by a powerful lawmaker, Gov. Dennis Daugaard's proposed Medicaid expansion is at least breathing as of Friday, and Daugaard may declare it fully recovered when he speaks on Monday.

The remedy came on Friday, when the state received official notice that the federal government would start reimbursing at 100 percent for services to Indian Health Service patients who are sent to receive additional care through non-IHS facilities.

The federal government now reimburses those non-IHS facilities at the standard Medicaid rate for a state, which means the feds do not always pay the bill in full. The state government pays the remainder.

The change announced Friday would make the federal government responsible for the full amount of the charges.

Thus the change would provide the savings that Daugaard has sought as a way to pay for Medicaid expansion for lower-income workers in South Dakota.

Daugaard plans to talk about the decision’s effect Monday in a special news conference. His office Friday afternoon didn’t immediately make clear whether Medicaid expansion would be pursued.

“The governor will address that on Monday,” state Health Secretary Kim Malsom-Rysdon said.

At the outset of the 2016 legislative session, the two most talked-about measures were a sales tax increase to pay for raising the salaries of the state's public school teachers and the proposal to add thousands of South Dakota's low-income residents to Medicaid coverage.

By one vote, the full House of Representatives on Feb. 18 seemed to deliver a knockout blow to the the sales-tax increase, HB 1182. But a day later, the House voted to reconsider the bill, and last Monday, the House passed it by one vote.

The Senate may vote on HB 1182 next week. The vote-counters are unsure which way the Republican-heavy Senate will lean.

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Daugaard's decision on Medicaid expansion also is uncertain.

In his state of the state address in early January, Daugaard asked skeptical Republican lawmakers to reserve judgment on the expansion plan until the state receives final word from the federal government. That word arrived on Friday.

Daugaard's goal has been to reduce current state spending to free funds for boosting potential Medicaid enrollment by about 50,000 residents.

Malsom-Rysdon and Jerilyn Church, chief executive officer of the Great Plains Tribal Chairmen’s Health Board, are the co-chairs of the Health Care Solutions Coalition that has been working on the South Dakota plan.

The South Dakota coalition met via teleconference Feb. 17. The meeting minutes show detailed timetables and plans for proceeding on improved IHS care in South Dakota. The minutes also said:

“As we continue to wait for details needed to determine the fiscal impact of the federal policy change, the governor recognizes the plan may not be ready to make a decision about expansion during the 2016 legislative session.

“However, the work to develop the plan will continue and a decision on expansion may be made after the 2016 legislative session. The governor’s recommendation for this legislative session will consider the legislative appropriations process and timeframes."

The Legislature has nine workdays left in its main run and returns March 29 to consider any vetoes issued by the governor. The Joint Committee on Appropriations is still assembling the fiscal 2017 general budget bill.

The seven-page letter received Friday by the Daugaard administration has its share of alphabet soup. In the following excerpt, "IHS" stands for Indian Health Service, "AI" means American Indian, and "AN" means Alaskan Native:

“Upon execution of a written care coordination agreement, this will be effective immediately for states for the expenditures for services furnished by non-IHS/Tribal providers to AI/AN Medicaid beneficiaries who are patients of an IHS/Tribal facility acting under such agreement, as described below.

“This update in payment policy is intended to help states, the IHS, and Tribes to improve delivery systems for AI/ANs by increasing access to care, strengthening continuity of care, and improving population health.”

Vikki Wachino, director for the federal Centers for Medicare and Medicaid Services, signed the letter.

On Wednesday, the state House of Representatives approved legislation that would require the governor to seek the Legislature’s approval before expanding Medicaid. The legislation, HB 1234, hasn’t been considered yet in the state Senate.

During the House debate House Majority Leader Brian Gosch, R-Rapid City, said he understood that Medicaid expansion wouldn’t happen in South Dakota this year. The bill’s prime sponsor, Rep. Don Haggar, R-Sioux Falls, said he “personally” thought it wouldn’t occur this year.

Now their tentative predictions look even more tentative, as Daugaard has the federal letter he has been waiting for.

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