South Dakota - Day Habilitation Services — Licensing, Medicaid Enrollment and Startup Requirements

Last reviewed: 2026-09-10

The South Dakota Department of Human Services (DHS), Division of Developmental Disabilities (DDD) certifies Day Habilitation Services under the CHOICES Waiver for individuals with intellectual and developmental disabilities. Prospective agencies must secure formal certification as a Community Support Provider (CSP) pursuant to Administrative Rules of South Dakota (ARSD) 46:11:02 before any Medicaid enrollment application will be accepted.

Approval requires passing a DHS-DDD facility readiness review, proving physical plant compliance with life safety codes, and maintaining active accreditation through a state-designated national quality assurance organization. Once CSP certification and accreditation are secured, agencies execute a provider agreement with DHS/DDD and submit their application through the South Dakota Medicaid Provider Enrollment Portal.

1. Service Definition and Scope

Day Habilitation Services in South Dakota provide structured daytime programming outside the participant's residence to build self-help, socialization, and adaptive skills. These services are funded primarily through the CHOICES Waiver, administered by DHS-DDD.

The service focuses on enabling participants to attain or maintain their maximum functional level. Programming must align with the participant's Individualized Support Plan (ISP) and be delivered in a facility that meets specific physical and safety standards.

• Target Population: Individuals with intellectual and developmental disabilities enrolled in the CHOICES Waiver.
• Service Setting: Non-residential, facility-based community settings.
• Core Focus: Socialization, adaptive skills, and self-help skill development.
• Space Requirement: Minimum of 20 square feet of usable space per participant.
• Plan Alignment: Activities must directly track progress against the participant's Individualized Support Plan (ISP).

2. Regulatory and Oversight Agencies

Oversight is split between the agency managing the waiver and the agency handling Medicaid funds. DHS-DDD handles programmatic certification, facility reviews, and quality assurance.

The Department of Social Services (DSS) manages the financial enrollment, claims processing, and provider revalidation through the state's MMIS.

• Programmatic Certifier: South Dakota Department of Human Services (DHS), Division of Developmental Disabilities (DDD) (https://dhs.sd.gov/division-developmental-disabilities).
• Medicaid Authority: South Dakota Department of Social Services (DSS) (https://dss.sd.gov).
• Enrollment System: South Dakota Medicaid Provider Enrollment Portal (https://dss.sd.gov).
• Case Management System: Therap, utilized by DHS/LTSS for participant tracking and service documentation.

3. Gatekeeping Prerequisites: Who Can Even Apply

South Dakota strictly gates entry into the CHOICES Waiver through a formal provider designation process. An agency cannot simply enroll in Medicaid to offer Day Habilitation; it must first achieve specific organizational statuses.

The state requires agencies to be certified as a Community Support Provider (CSP) or Community Services Provider (SP) by DHS-DDD. Furthermore, the agency must secure and maintain active accreditation from a state-recognized national accrediting body.

• Required Designation: Certification as a Community Support Provider (CSP) or Community Services Provider (SP) by DHS-DDD.
• Accreditation Mandate: Active accreditation through a state-designated national quality assurance organization is required to deliver CHOICES Waiver services.
• Corporate Registration: Must be a registered business with the South Dakota Secretary of State.
• Tax Identification: Must possess a valid Employer Identification Number (EIN) and a Type 2 National Provider Identifier (NPI).

4. Licensure and Certification Requirements

South Dakota does not issue a standalone "Day Habilitation License." Instead, the service is governed under the overarching CSP certification rules found in ARSD 46:11:02.

Certification involves a rigorous physical plant inspection and policy review. Facilities must demonstrate compliance with specific fire safety codes and spatial requirements before DHS-DDD issues the certification.

• Regulatory Citation: Administrative Rules of South Dakota (ARSD) 46:11:02 (Certification of Community Support Providers).
• Fire Safety: Proof of facility compliance with the 2000 edition of the Life Safety Code (NFPA 101).
• Physical Plant: Verified building floor plans reflecting minimum square footage requirements (20 sq. ft. per participant).
• Readiness Review: DHS-DDD conducts a facility readiness review prior to issuing agency certification.

5. Medicaid Provider Enrollment

After obtaining CSP certification and a DHS/DDD provider agreement, agencies must enroll as billing providers through the South Dakota Medicaid Provider Enrollment Portal.

The Department of Social Services (DSS) processes these applications. Failure to secure the DHS/DDD contract prior to submitting the DSS application will result in immediate denial of the Medicaid enrollment.

• Enrollment Platform: South Dakota Medicaid Provider Enrollment Portal.
• Prerequisite Contract: Must have a signed purchase of services agreement (contract) with DHS/DDD before applying.
• Required Forms: Submission of a compliant W-9 and proof of insurance coverages.
• Out-of-State Providers: Must complete the LTSS HCBS Out-of-State Provider Enrollment Request form and identify a current SD resident needing their services.

6. Staffing, Training and Background Checks

Direct support professionals delivering Day Habilitation must meet training standards outlined in ARSD 46:11:04:15.01. Agencies are responsible for ensuring all staff are competent to address the specific needs of the individuals they serve.

Training must be documented and maintained in personnel files for state surveyors to review during quality assurance audits.

• Training Regulation: ARSD 46:11:04:15.01 dictates minimum training and documentation requirements.
• Core Competencies: Staff must be trained on the minimum requirements necessary to address the individual's specific needs as outlined in the ISP.
• System Training: Providers must complete Therap system training provided by a Therap representative upon account setup.
• Background Checks: Standard state and federal criminal background checks are required for all direct-care staff prior to independent participant contact.

7. Documentation, Policies and Records

Providers must maintain comprehensive policy manuals and participant records to survive DHS-DDD audits. The state requires specific operational policies to be submitted during the initial self-assessment phase.

Daily service documentation must directly correlate with the goals and objectives established in the participant's ISP, recorded within the state's mandated electronic system.

• Policy Manual: Agency-specific Day Habilitation Policy & Procedure Manual must be submitted.
• Service Tracking: Detailed documentation tracking progress against each participant's Individualized Support Plan (ISP) must be accurately maintained.
• Insurance Requirements: Proof of general liability, commercial property, and specialized commercial auto insurance.
• Self-Assessment: Providers must complete the LTSS HCBS Provider Self-Assessment survey within 30 days of issuance, attaching all required policies.

8. Billing, Rates and Claims

Day Habilitation claims are submitted to the South Dakota Medicaid MMIS following the guidelines in the Medicaid Provider Billing Manuals.

Rates for CHOICES Waiver services are established by DHS-DDD and published in the state's fee schedules. Providers must ensure all billed units are supported by corresponding Therap documentation.

• Billing System: Claims are processed through the South Dakota Medicaid MMIS.
• Rate Setting: Reimbursement rates are determined by DHS-DDD and published in official fee schedules.
• Documentation Tie-in: Medicaid billing audits require accurate ISP progress documentation to substantiate claims.
• Guidance Source: Providers must adhere to the national standards detailed in the South Dakota Medicaid Provider Billing Manuals.

9. Approval Sequence and Timeline

The pathway to becoming a billing provider is strictly sequential. Agencies must establish their corporate entity, secure physical space, and pass DHS-DDD reviews before touching the Medicaid portal.

Timelines vary based on agency capacity and state queue volumes, but the sequence of approvals cannot be bypassed or run concurrently.

• Step 1: Register business with the South Dakota Secretary of State and obtain EIN/Type 2 NPI.
• Step 2: Apply to DHS-DDD for Community Support Provider (CSP) certification and pass facility readiness review.
• Step 3: Obtain required national accreditation.
• Step 4: Execute provider agreement/contract with DHS/DDD.
• Step 5: Submit application through the South Dakota Medicaid Provider Enrollment Portal.
• Step 6: Complete Therap system setup and mandatory training.

10. Common Denials and Survey Findings

Applications are frequently rejected when providers attempt to enroll in Medicaid before securing their DHS-DDD contract. Surveyors also heavily scrutinize physical plant safety and documentation practices.

Maintaining compliance requires strict adherence to the Life Safety Code and ensuring that daily service notes reflect actual progress toward ISP goals, rather than generic activity descriptions.

• Premature Enrollment: Medicaid applications denied because the provider lacks an approved DHS/DDD purchase of services agreement.
• Physical Plant Failures: Inability to prove compliance with the 2000 edition of the Life Safety Code (NFPA 101).
• Space Deficiencies: Floor plans failing to demonstrate the required 20 square feet of usable space per participant.
• Documentation Gaps: Audits revealing service notes that do not track progress against the participant's ISP.
• Change of Ownership: Failure to provide the required 30 days' advance written notice before a sale or transfer of control.

11. Key Contacts and Resources

Prospective providers should utilize the official state portals and manuals to guide their application process. The DHS and DSS websites host the most current regulatory requirements and forms.

Direct communication with the Division of Developmental Disabilities is essential for navigating the CSP certification and facility readiness review processes.

• DHS Division of Developmental Disabilities: https://dhs.sd.gov/division-developmental-disabilities
• South Dakota Medicaid Provider Enrollment: https://dss.sd.gov
• Medicaid Provider Billing Manuals: https://dss.sd.gov/medicaid/providers/billingmanuals/default.aspx
• Dakota at Home (Resource Directory): 833-663-9673

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