Committee: Joint Appropriations Subcommittee #2
South Dakota Department of Social Services
Senator Bogue moved the committee approve Subcommittee #2 minutes of January 15, 1999.
Seconded by Senator Kleven. Motion prevailed by voice vote. Representative Burg moved the
committee approve Subcommittee #2 minutes for January 16, 1999. Seconded by Senator Hainje.
Motion prevailed by voice vote.
Mr. James W. Ellenbecker, Secretary, Department of Social Services (DSS), reviewed background
information on the Children's Health Insurance Program (CHIP). He noted the program currently
covers children 6- to 18-years old who are between 100% and 133% of poverty. The Department
initially projected 7,300 children would fall into that category. The Department has since revised
that figure to 6,000 children. Currently the Governor is recommending extending coverage to
include children from birth to 18-years-old between 133% and 150 % of poverty. The cost to insure
each child under the program is approximately $900 per year. CHIP is used on the reservations.
When service is rendered by the Indian Health Service, the state pays the Indian Health Service with
100% federal funds. CHIP involves some cost sharing on the part of participants, such as minimal
co-payments.
Secretary Ellenbecker reviewed three items from the January 20, 1999, budget hearing meeting. Regarding parenting education, the Department estimated 500-600 parents would attend. Actual
numbers for FY99 reflect attendance of 103. The participants must pay $30 for the class, which goes
to the provider, and $15 for a book. Regarding work penalties for the TANF program, 266 cases
received a first-time sanction over a six-month period, resulting in a 50% reduction in payment.
Over an 11-month period, 293 cases were closed as the result of a second sanction. Regarding TANF
work requirements on the various reservations, $403,000 was spent last year.
Ms. Sharon Sonnenschein, Deputy Director, Quality Control, presented an overview of pre-
eligibility requirements for nursing home occupants. Eligibility for Medicaid patients is $1,500 per
month. Secretary Ellenbecker addressed recovery rates and indicated the state receives $50,000 per
month in recovery monies.
Secretary Ellenbecker highlighted major budget changes. He noted the recommended increase in
federal funding is larger than the recommended increase in state funding. A $6 million increase in
general funds is recommended. A $39 million increase in the overall budget is recommended. The
number of FTEs is to remain constant.
The Secretary reviewed 13 major budget issues. Those issues included a recommended increase for
a 2.6% inflation policy for providers of $2.8 million in General funds. Areas in which inflation is
calculated at greater than 2.6% include the Delta Dental contract, 3.8%; Medicare, 5%; and
prescription drugs, 9%.
Representative Derby assumed the gavel.
Senator Bogue inquired what type of decrease in inflation has occurred in the primary care physician
program. The Department saw an initial decrease, but recently there has been an upswing.
Senator Dennert noted a correction on page 22 of the Department's Budget Overview. The projected
increase for the overall budget should read 9.7%, not 15.99%.
Secretary Ellenbecker noted there is a current $15 million deficit in the state's Medicaid program.
In-patient hospital services is 30% of the problem, prescription drugs is 28%, Indian Health Service
is 18%, physician services is 9%, and out-patient hospital services is 7%. The Department noted
they under-projected by approximately 31% in utilization of services, 39% in pharmacy costs, and
30% in number of clients.
The committee engaged in a discussion on Medicaid eligibility. The Department continues to
encourage Medicaid recipients to use the Indian Health Service Program. The Department's solution
for the Medicaid deficit is to use $1.5 million in General funds from CHIP and reduce the
maintenance of effort under the TANF program from 100% to 80%. This will amount to $2.3
million in General funds and resolve the deficit problem in the current year.
Senator Frederick inquired whether the CHIP money would need to be replaced. It would.
Secretary Ellenbecker proceeded to report on other major budget issues. There has been a growth in Medicaid outside of CHIP of 1500 clients. The increase in utilization of medical services was greatest in the Indian Health Service Program. The percent of state funding needed for the Federal
Medical Assistance Program will decrease. There has been an increase in the number of children
requiring foster care. The number of children in basic foster care is expected to rise from 433 to 450
in FY00, and the number of children in group and residential foster care is projected to increase from
92 to 135. The cost per child to the state for basic foster care is $363/month. All foster childern are
covered by Medicaid.
Secretary Ellenbecker reported a decrease in the number of families receiving TANF grants. He
corrected TANF reserve figures presented at the hearing the previous day. South Dakota established
a credit of $6 million in the first fiscal year, $11.2 million the second year, and it will have $14
million at the end of the third fiscal year.
The Department has seen an increase in the number of child care subsidy cases. The state pays child
care vendors directly, after the families have applied to the subsidy program. The child care
providers must be licensed by the state; if the provider is a relative there is a lower rate of
reimbursement.
Grants for school-age child care programs currently supports 28 programs; the Department proposes
10 additional programs. Funding for the 100 new day care facilities proposed by the Governor
would show up in the South Dakota Housing Authority budget.
The Department is requesting 10 new nutrition sites under the Elderly Nutrition Program. These
sites would serve house-bound individuals currently not served through existing sites. There is a
waiting list of 30 communities that have requested a meal site. The average cost per meal from a
meal site is $2.00 The rate for contracted meals from restaurants is higher.
In closing, Secretary Ellenbecker noted a projected increase of 550 additional clients in the
Homemaker and Personal Care Program as the reason for the recommended increase in the program
budget. He also explained the need to establish an “other “ fund to deposit and expend the federal
incentive awards for the Child Support Program.
Discussion followed on the amount of payment made to basic foster care providers. Representative
Klaudt requested information on how many vehicles the Department uses and the amount of mileage
accrued in the last year by Department employees. The Department will provide that information.
Senator Frederick assumed the gavel.
Senator Dennert requested clarification of the $30 per month allotted to nursing home occupants.
Secretary Ellenbecker noted the federal government sets the limit; the state must provide additional
funds if the state raises the limit.
MOTION:
ADJOURN
Deborah Rumrill