MedicaidReimbursementHigh impact
SFY27 Reimbursement
South Dakota Medicaid·SD·Claims & Billing
Effective date
Jul 1, 2026
We identified it
Jul 7, 2026
Summary
South Dakota Medicaid is implementing comprehensive reimbursement rate increases effective July 1, 2026, including hospital methodology changes (MS-DRG to APR-DRG), FQHC alternative payment methodology, Care Connect tier rate adjustments, and 1.4% inflationary increases across professional services capped at 100% of Medicare. Billing teams must update fee schedules, verify rate changes for specific procedure codes, and align claims submission to new reimbursement methodologies.
Action Required
By June 30, 2026: Billing team must download and implement updated fee schedules from https://dss.sd.gov/medicaid/providers/feeschedules/. Specifically: (1) Update billing system to reflect new Care Connect PMPM rates (Tier 1: $35.15, Tier 2: $58.99, Tier 3: $99.54, Tier 4: $166.35); (2) Verify all professional service rates have been increased to minimum 96.5% of Medicare or capped at 100% of Medicare using South Dakota non-qualifying APM conversion factor; (3) Update transportation service codes (A0100, A0120, A0130, S0209, S0215, T2001, T2005, T2049) with new rates in billing software; (4) Update G9151 (prenatal care enhanced payment) rate to $333.30; (5) Coordinate with hospital billing if applicable regarding transition from MS-DRG to APR-DRG methodology; (6) For FQHCs, confirm alternative cost-based weighted average payment methodology is active in claims processing system. Verify all changes are live before July 1, 2026. Failure to update rates will result in underpayment or claim denials due to rate mismatches with payer records.