Special session for Medicaid expansion?

Gov. Dennis Daugaard on Monday said he won't ask lawmakers to take up Medicaid expansion in the final two weeks of the legislative session.

But the conversation isn't over.

“Given this time frame, I’ve concluded that to urge legislative approval of a Medicaid expansion decision this session would not give the Legislature adequate time to give fair and dispassionate consideration to the proposal,” Daugaard said at a press conference Monday.

The Republican governor reiterated that he won't expand Medicaid to include tens of thousands of additional needy South Dakota residents without the Legislature's and tribes' approval. And he would only move forward if expansion is budget neutral.

He said he'd ask the state's budget writing committee to remove the provisions in his proposal that allowed for expansion, but he said the conversation could come up again in 2017 or in special session.

"This does not mean that we are done,” Daugaard said. “I’m very optimistic that I will be able to recommend Medicaid expansion when the plan is right for South Dakota."

Senate Majority Leader Corey Brown, R-Gettysburg, said the decision to wait was a prudent one as it would give the state more time to determine whether implementation would save the state money and would help improve health care for American Indians in the state.

"We always said if the state was going to do it, we need to do it right," Brown said.

Daugaard's decision comes days after a letter from the Centers from Medicare and Medicaid Services (CMS) indicated the federal government would reinterpret a policy about funding care through Indian Health Service (IHS) facilities. While the letter was a crucial piece the governor needed to move forward on the proposal, he said it didn't completely meet some of the state's expectations.

"It's not just throwing the switch," Daugaard said. "The policy is on so now we can start sending 100 percent of the bills to the federal government, no. It doesn't work that way."

He said the South Dakota Health Care Solutions Coalition still has work to do in implementing some of the changes laid out in the letter and in working with non-IHS providers to see some of the benefits of contracting with IHS hospitals. Sanford and Avera have already indicated that they were working with IHS facilities on telehealth services. Health care groups will have to sign detailed contracts with IHS facilities to be considered part of their network. At that point, hospitals like Avera and Sanford could bill CMS for health care services for Medicaid-eligible people and if they were referred through IHS, the feds would foot the whole bill.

The coalition met Monday afternoon to reaffirm their mission and to again go out and work toward expansion.

Daugaard said he would wait to call for a special session until the coalition determines if the new IHS agreement will save enough money to cover the state's obligation for Medicaid expansion.

Under the new arrangement, CMS will now cover 100 percent of care at facilities indirectly linked to the IHS.

Previously, CMS said it would foot the entire bill of Medicaid-eligible American Indian people who seek medical care through an IHS facility, while the state covers the bill for that group if they seek health care outside an IHS facility. In fiscal year 2015, the state paid $67 million for Medicaid-eligible Native Americans who sought care outside of IHS facilities.

Daugaard has said savings from the new IHS policy could fund his proposal to expand Medicaid to cover 50,000 more South Dakota residents.

And those proposals are inextricably linked, he said. Until more providers decide to contract with IHS to provide care and can prove they'd create a cost savings, the state can't move forward on expansion. And the opportunity to expand could incent providers to offer contractual services.

Conservative groups and lawmakers against expansion cheered the decision not to move forward right away while Democrats, the state's tribes and many health groups said they wanted to see the conversation continue in the Legislature.

Ben Lee, South Dakota state director of Americans for Prosperity, applauded the governor Monday for not rushing a vote on expansion.

"Rejecting Medicaid expansion for now gives policymakers time to study and debate the issue in full," Lee said in a statement.

Rep. Don Haggar, R-Sioux Falls, also said it was the "right move" to give lawmakers more time to mull the proposal.

House Minority Leader Spencer Hawley, D-Brookings, said he was "extremely disappointed" that the Legislature wouldn't get a chance to act on Medicaid expansion in the next two weeks, but said he'd continue to support it.

Sen. Troy Heinert, a member of the Rosebud Sioux Tribe, said the push for Medicaid expansion needs to continue so that American Indian people in the state can obtain better health care.

"This is really a matter of life and limb," the Mission Democrat said. "So I hope we can continue to take up this conversation."

REPLAY: #100Eyes on South Dakota Politics

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