How South Dakota Got Its First New SNF In 30 Years

December 3, 2017, Maggie Flynn, Skilled Nursing News - The Evangelical Lutheran Good Samaritan Society’s new 30-bed skilled nursing facility in Rapid City, South Dakota, will be the first in the state since 1988.  That was the year that South Dakota implemented a moratorium on new nursing home construction.

It was also the year South Dakota repealed its certificate of need (CON) system, which covered skilled nursing facilities and other entities.

“CON was much broader in scope as it applied to a variety of health care facilities,” Tom Martinec, deputy secretary at South Dakota’s Department of Health, said in an email to Skilled Nursing News.  “At the time, South Dakota also had a very high per-capita nursing facility utilization rate compared to other states, and there were very limited other long-term care options available.”

Policymakers at the time of the CON repeal felt the moratorium was necessary to help control increasing long-term care costs to the state and to foster other long-term care options in South Dakota, he explained.

In 2005, the moratorium, which had been time-limited and required extensions via legislation, was extended indefinitely.

Under the moratorium, the number of beds per facility and the number of beds statewide is capped, Martinec said.  Currently, South Dakota can have 7,945 beds under the moratorium; of those, 6,665 beds are currently licensed by the Department of Health.

CON programs are primarily intended to prevent facilities from building more capacity than necessary and originated to regulate the number of beds in nursing homes and hospitals, according to the National Conference of State Legislatures (NCSL).  While 14 states have discontinued their CON programs since a federal mandate linking funding to CON programs was repealed, 34 states currently have some type of CON program and three have CON variants, according to the NCSL.

Redistribution of beds

Good Samaritan’s facility, St. Martin Village, had to go through a bidding process to obtain the 30 beds for its facility, Philip Samuelson, regional vice president for South Dakota at the Good Samaritan Society, told SNN.  These beds were available for redistribution from closed facilities in the state for the Rapid City area.

The redistribution mechanism came about in part because of a shift in population centers, Martinec said.  As the population in urban communities increased and the population in rural areas dwindled, existing nursing home beds were not always located in the areas where additional nursing facility capacity was needed, he explained.

“In 2012 the state implemented a mechanism to redistribute unused beds to identified areas of need through the statutory Request for Proposals (RFP) process,” Martinec wrote.  “This was a measure that was intended to incorporate some flexibility into the moratorium.”

Beds from facilities that have closed since 2005 comprise the pool of unused beds eligible for redistribution — along with beds voluntarily relinquished by facilities that participate in the Access Critical Program, which helps South Dakota’s rural hospitals in the changing health care environment.

There are some rules that govern the redistribution.  Beds can only be moved within 15 miles, and the Good Samaritan Society, the largest not-for-profit senior care and services provider in the United States, had no skilled nursing facilities within 15 miles of Rapid City.

The society began talks with the St. Martin Benedictine Sisters in December of 2007 about establishing a new community for seniors, Samuelson said.  But the RFP for the 30 beds in the Rapid City area did not come until 2015, when Good Samaritan was awarded the beds for St. Martin Village.

Good Samaritan is factoring the population shift into its considerations for expansion in South Dakota.  The population growth for people age 65 and older in Pennington County, South Dakota — where Rapid City is located — is expected to be about 24.5% from 2015 to 2020, Samuelson said, citing the South Dakota State University Census Data Center.

“We’re trying to position ourselves in communities where there is health care, and ultimately the big regional hospitals are in Sioux falls and Rapid City,” he said in a phone interview with SNN.

SNF Use Declining in SD

Nursing facility utilization in South Dakota has been steadily decreasing, due mainly to other long-term care options and the desire of older South Dakotans to stay in home and community-based settings, Martinec said.  He also said the moratorium has been effective, as a strong assisted living industry has developed in the state.

Home and community-based services will likely grow, but the need for skilled nursing facilities won’t disappear, Samuelson said.

Earlier this year, the state Department of Health has issued another RFP to distribute additional beds, with 75 earmarked for the Rapid City area and 75 for Sioux Falls.  In addition, 45 more were allotted for any community in the state.  The results of that RFP are pending, Martinec said.

Good Samaritan has applied for a new RFP for an additional 30 beds on the St. Martin Campus.  Those beds will be built by January 2020 if the bid is successful, according to Samuelson.

“There’s going to be no way to get additional beds without the RFP process,” he said.

But Samuelson thinks that’s good enough.

“I think at this point it seems to be the process that we have and seems to be a process that’s working,” he said.