SD lawmakers form workgroup to address concerns that disability program could violate federal law

Nov. 21—SIOUX FALLS, S.D. — A group of lawmakers will take a deeper look at ways to improve Family Support 360, a program servicing hundreds of disabled individuals in South Dakota. On top of stringent rules that participants say add stress to an already difficult situation, some lawmakers fear that the management of the program could be violating federal disability regulations.

At the Nov. 11 Interim Appropriations Committee meeting, Sen. Jack Kolbeck proposed forming a workgroup to bring together affected families, service providers and the Department of Human Services to begin addressing concerns. Though a date has yet to be set for the workgroup, lawmakers say it will meet before the next Appropriations meeting on Dec 14.

"Families don't ask for a lot. We don't expect everything. And we know there have to be parameters with any program," Brenda Smith, a longtime disability advocate in the state whose adult son is part of the Family Support 360 program, told the committee. "But we need parameters that are developed with the Community Service Providers that are providing some of those services, and with families and individuals with disabilities who have that lived experience."

In short, Family Support 360 is a program that seeks to keep disabled children and adults out of institutional settings and either with their families at home or in an independent situation. However, the state does not completely leave these individuals alone; they subsidize companion care workers and cover certain eligible materials for care.

According to

estimates from the Department of Human Services,

the expected spending per person in the Family Support 360 program during the 2023 fiscal year is about $7,000.

The estimated annual cost per person in institutional settings, according to these same documents, can go as high as $315,000.

These costs, as with all other Medicaid-based disability programs, are shared by state and federal funding; in 2023, South Dakota will cover about 43 cents of every dollar spent on disability services under Medicaid.

Considering there are around 1,400 people in the Family Support 360 program, the state saves at a minimum tens of millions of dollars per year by offering flexibility to disabled individuals and their families.

Yet more important than these savings for lawmakers and program participants is the way that family centered care can be flexible and, in many cases, meet the needs of disabled family members better than in an institutional setting.

"These families want to help their disabled children, whatever their disability may be, to be a part of our citizenry in the state of South Dakota and to be hopefully someday part of the workforce," Kolbeck said at the Government Operations and Audit Committee, which spent a major part of its Oct. 18-19 meeting hearing testimony on the difficulties with the program.

While the program has often been a win-win throughout its decades of implementation, families say that recently they have not been getting enough support from the state.

Outside of a general lack of communication and outreach, the major policy problems identified by participants in the program include a 20-hour cap on companion care, a decentralized system for finding service providers and a difficult process to get necessary items for care covered.

In the program, families directly hire and direct companion care workers. However, these care workers are under the umbrella of eight community service providers, private businesses that handle Medicaid paperwork and manage applications among other administrative tasks, essentially acting as co-employers with the families.

These providers would have to fund employee benefits for companion care workers working above 20 hours per week; providers say this would be impossible to support financially without a change in state funding.

After hearing from participants in the program about the difficulty this cap imposes on family members filling in the gaps in service, lawmakers say the state should think about increasing funding to these providers to backstop an increase to full-time work for families that may need it.

Hourly limits and hiring quotas — which some families say have led to "hiring freezes" — are controlled by annual contacts that providers say they have little ability to negotiate with the state before implementation.

"I really question whether these contracts couldn't be made such that full reimbursement total compensation claim benefits can be added to those contracts," Sen. Wayne Steinhauer said at the Government Operations and Audit Committee meeting on Oct. 19. "You can't do it unless you're negotiating before the contract goes into effect. So that needs to happen, and we need to figure out a way to reimburse these agencies for all their costs, and that will open up the 20-hour barrier."

Another relatively recent change to the program is not a policy alteration but rather a more stringent interpretation of which items can be reimbursed. Although there is an appeals process for getting items related to care covered by the state, it can be "adversarial."

Further, providers that used to front money generously for investments into disabled family members with the expectation of reimbursement have become more cautious.

Ann Van Stedum, whose daughter is in the Family Support 360 program, told the Government Operations and Audit Committee that a request for a weighted blanket had been denied since it was "a toy."

"It's not a toy. Weighted blankets are critical," Linda Duba, a member of the Appropriations Committee, told Forum News Service. "It's very common. We use them at school for kids who are struggling to try to get them to regulate. They're very helpful."

The final major issue is a decentralized application and waiting list, which forces individual families to apply to individual service providers, often landing them on several waiting lists at one time. Public testimony indicated that this waiting list can be two years long in some cases.

"The state needs to step in and create some sort of front door where families can ask for assistance, and then the state would then be an intermediary between those families and the providers," said Sen. Reynold Nesiba, a member of the Appropriations Committee.

The Department of Human Services says it is working on a centralized application and waiting list process that should be ready next year.

During the Oct. 19 Government Operations and Audit Committee meeting, there was one particular back-and-forth that worried some lawmakers.

"Are we in violation of any federal or state law or state rule with the existence of the wait list as they are now?" Sen. Reynold Nesiba asked Jaze Sollars, who provides service coordination for the Family Support program.

"We are currently not (in violation)," she said. "However, the moment that (the waiting list) becomes a state-operated list, we would be if we were at the current status."

Essentially, the complexity in the answer comes down to the decentralized waiting list; technically, the department says it is not "aware" of the long waiting periods faced by families applying for the program since those lists are maintained by individual providers. Nesiba was nearly in disbelief at this answer.

"Aren't we now aware? I think this meeting is a public hearing, I think we're all aware of the list," Nesiba said.

The fear that the program's waiting list and limiting of hours violates federal rules stems from a

2014 letter

from the Department of Justice and the Department of Health and Human Services, which reminds states that "no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity."

The wording is taken directly from the Americans with Disabilities Act.

The letter goes on to say "implementation of across-the-board caps risks violating the ADA if the caps do not account for the needs of individuals with disabilities and consequently places them at serious risk of institutionalization or segregation."

This could be read to require a waiving of the weekly hour cap on companion care if going without that care would require a disabled individual to enter a more restrictive setting.

On the point of the waiting list, state administrative rules also require that, for department-managed waiting lists, the department place higher priority individuals at the front of the waiting list.

A set of recommendations by the Government Operations and Audit Committee instructed the state's Department of Human Services to make "reasonable modifications" to ensure that disabled individuals are cared for in the "least restrictive setting," which often means at home.

Although the department continued to maintain that it has "no reason to believe" that there is a compliance issue at the Nov. 11 Appropriations meeting, the potential reality that disabled individuals in the state are going without services should be a major thread of the coming workgroup.

"The state needs to take action to make sure that we are in compliance with federal law, that we are meeting the needs of South Dakota families and that we are working in a cooperative way with our providers," Nesiba told Forum News Service.

Jason Harward is a

Report for America

corps reporter who writes about state politics in South Dakota. Contact him at