Oct. 8, 2025

The South Dakota Department of Social Services and LifeScape have reached a resolution regarding proposed changes that LifeScape believed could have drastically slashed Medicaid reimbursements.

The department “will continue to exempt LifeScape from the initially proposed DRG/APC system of reimbursement,” according to a statement from LifeScape.

“The agreement reflects the shared commitment of both organizations to ensuring the delivery of high-quality care while maintaining financial responsibility and compliance with Medicaid requirements.”

Last month, dozens of families pleaded with the Department of Social Services not to change LifeScape’s exemption. The issue arose as the state sought to modernize its decades-old reimbursement system in alignment with federal guidance.

Supporters plead with state to rethink reimbursement change affecting LifeScape