South Dakota Gov. Larry Rhoden has signed the first bill into law for this legislative session, committing $402 million toward rural healthcare for Fiscal Year 2026.
House Bill 1044’s approval lays out the foundation for the state to make concerted efforts in supplementing rural healthcare through the five-year Rural Health Transformation Program (RHTP). The program aligns with the federal initiative by the same name, aimed at strengthening healthcare systems in rural communities as part of the One Big Beautiful Bill. The administration previously allocated $189.4 million to kickstart South Dakota’s RHTP.
Plans for the program will be based off four core strategies:
- Connecting technology and data.
- Advancing the rural workforce.
- Keeping healthcare access local and strong.
- Transforming systems for sustainability.
Modernizing healthcare delivery will be one of the state’s main priorities as officials develop a comprehensive approach to digital health infrastructure and health information exchange. The program’s focus will address clinical and technology needs as well as expanding essential operational infrastructure: telecommunications, cybersecurity, equipment and emergency preparedness systems.
The state will develop the Data Atlas to function as the portal hub for healthcare information throughout the statewide electronic health record systems. Healthcare providers and facilities will use the portal to source local and state agency data used to guide decision-making processes.
Among the major changes planned for the state’s healthcare system, the RHTP will implement an alternative payment model to make healthcare more affordable, accessible and sustainable for underserved residents. Components of the model will include:
- Implementing a predictable monthly investment in each patient enabling physicians to prioritize high-value care over visit volume.
- Using year-end primary care Healthcare Effectiveness Data and Information Set (HEDIS) measures to determine quality payments.
- Creating a shared case management infrastructure option to better support rural clinics.
- Establishing a structure for patient-directed quality goals.
With the expansion of South Dakota’s rural healthcare system, the state will need to take additional steps to ensure the network can be maintained and sustained with a skilled, trained workforce. Plans include combining recruitment incentives, retention supports and education partnerships to build and reinforce the workforce.
The state will also expand the Community Health Workers (CHWs) and Community Health Representatives (CHRs) workforce through training, certification, Medicaid billing support and organizational integration. Officials plans to achieve both objectives by establishing the Rural Health Forward: Training and Resource Hub to simplify and improve skill development, training and efficacy.
Additional initiatives featured in the plan include:
- Implementing the Medicaid Rural Health Access and Quality Grants program to help rural hospitals and clinics evaluate and update care delivery models for long-term success.
- Establishing three regional OB hubs focused on clinical care and broader maternal and infant care coordination.
- Investing in chronic disease management.
- Expanding regional coverage through the state’s Behavioral Health Care System by establishing the Certified Community Behavioral Health Clinic and Collaborative Care models.
- Strengthening the state’s Emergency Medical Services (EMS) by addressing workforce challenges, advancing regionalized EMS hubs and improving technology and data integration.
The next steps for the plan will take place over the next couple months, starting with the state launching foundational Requests for Proposals and planning efforts.
Photo by Vidal Balielo Jr. from Pexels
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