South Dakota nursing home closure renews Medicaid debate

June 5, 2019 GMT

SIOUX FALLS, S.D. (AP) — A Sioux Falls nursing home will be the seventh to close in South Dakota in the last three years, continuing a trend that industry officials warned legislators about because of the state’s low Medicaid reimbursement rate.

Covington Care and Rehabilitation told residents this week that the facility will be closing later this summer, the Argus Leader reported.

The South Dakota Health Care Association lamented the closing of the facility, the latest closure it attributed to South Dakota’s low Medicaid reimbursement rate, which about 53 percent of the state’s nursing home population receives.


Nursing home leaders warned legislators during this year’s session that the industry was on the verge of collapse because South Dakota’s low Medicaid reimbursement rate leaves nursing homes with a $42 million annual shortfall in funding. The Legislature passed a 10 percent increase in the reimbursement rate for nursing homes in the state’s 2020 budget and also revised its 2019 budget to begin the increase April 1.

“The long-term care funding crisis in our state is unfortunately still ongoing. Though we made significant progress during the last legislative session, this makes clear that still more needs to be done to adequately fund care for elderly and disabled South Dakotans,” association Executive Director Mark Deak said in a statement.

The locations of the closures include both small town and larger cities across the state. In addition to Covington, other recent closures include centers in Huron, Madison, Mobridge, Tripp, Bryant, and Rosholt. Inadequate reimbursement has been the primary driver of the closures, according to the association.

Even after recent increases in Medicaid reimbursement, nursing centers still lose an average of $42.33 each day for each resident paying through Medicaid. Statewide, costs of unreimbursed care total more than $48 million annually, the association said.

Covington administrators did not immediately return calls for comment on the closure.


Information from: Argus Leader,