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South Dakota - Integrated Employment — Licensing, Medicaid Enrollment and Startup Requirements

Last reviewed: 2026-08-16

In South Dakota, Integrated Employment is formally recognized as Supported Employment Services, primarily funded and administered through the CHOICES Waiver. This service provides individualized job development, placement, and on-site coaching designed to help individuals with developmental disabilities secure and maintain competitive, integrated employment at or above minimum wage in the general workforce.

The single biggest structural barrier to entry for new providers in South Dakota is the mandatory pre-contracting phase. South Dakota does not utilize a Certificate of Need (CON) or closed managed care network for this service, but applicants cannot simply submit a Medicaid enrollment application. A prospective provider must first pass a Provider Readiness Review and secure a formal Purchase of Services Agreement (contract) directly with the Department of Human Services (DHS). Any Medicaid application submitted to the Department of Social Services (DSS) without this executed DHS contract already in place will be automatically denied.

1. Service Definition and Scope

Supported Employment Services under the South Dakota CHOICES Waiver assist individuals with disabilities in preparing for, finding, and keeping a paid job in the community. Services are strictly tailored to individual goals outlined in the Individualized Support Plan (ISP) and must align with Employment First principles, ensuring employment is the primary goal of adult waiver services.

The scope of approved service delivery encompasses both pre-employment preparation and post-placement support. This includes on-site job coaching, task adaptation, and follow-along services to ensure long-term success, provided the setting meets all federal Home and Community-Based Services (HCBS) Settings Rule requirements for community integration.

2. Regulatory and Oversight Agencies

Oversight of Supported Employment in South Dakota is bifurcated between programmatic approval and financial enrollment. The Department of Human Services (DHS) handles all programmatic elements, including waiver provider certification, readiness reviews, and contracting.

The Department of Social Services (DSS) acts as the State Medicaid Agency, handling the actual Medicaid provider enrollment, claims processing, and financial audits through the state's Medicaid Management Information System (MMIS).

3. Gatekeeping Prerequisites: Who Can Even Apply

South Dakota does not require a Certificate of Need (CON), nor does it restrict Supported Employment providers through closed Managed Care Organization (MCO) networks or competitive Request for Proposals (RFP) procurement windows. The state operates on a fee-for-service model for the CHOICES Waiver.

However, the absolute structural precondition that blocks an applicant before a Medicaid application is accepted is the DHS Purchase of Services Agreement. A provider must submit a Provider Self-Assessment to DHS, pass a Readiness Review, and be awarded this contract. Without this specific contract, DSS will reject the Medicaid enrollment application outright.

4. Licensure and Certification Requirements

South Dakota does not issue a distinct, standalone facility license for Supported Employment. Instead, providers are certified as approved CHOICES Waiver providers through the DHS Division of Developmental Disabilities. This certification process replaces traditional licensure.

To achieve this certification, agencies must complete the LTSS HCBS Provider Self-Assessment. This requires submitting a comprehensive Policy and Procedure Manual that demonstrates compliance with HCBS Settings Rules, participant rights, and Employment First principles, followed by a formal Readiness Review by DHS staff.

5. Medicaid Provider Enrollment

Once the DHS Purchase of Services Agreement is executed, the provider must enroll with South Dakota Medicaid through the DSS Provider Online Portal. South Dakota operates primarily on a fee-for-service basis, meaning providers bill the state directly rather than routing claims through managed care plans.

During enrollment, providers must select the exact taxonomy codes that match their DHS approval. The application requires uploading the DHS contract, ownership disclosure forms, and banking information for Electronic Funds Transfer (EFT).

6. Staffing, Training and Background Checks

Direct support professionals and job coaches delivering Supported Employment services must meet strict background and training criteria before working with CHOICES Waiver participants. Agencies are responsible for maintaining these records in individual personnel files.

South Dakota mandates fingerprint-based criminal background checks through the Division of Criminal Investigation (DCI) for all staff. Additionally, staff must complete state-approved training on Employment First principles, incident reporting, and the specific needs outlined in the participant's ISP.

7. Documentation, Policies and Records

South Dakota DHS requires Supported Employment providers to maintain rigorous documentation to justify Medicaid billing and demonstrate progress toward competitive employment. All service delivery must directly trace back to the goals authorized in the participant's Individualized Support Plan (ISP).

Providers must utilize the state's designated LTSS Case Management System (Therap) for certain documentation and incident reporting. Daily service notes must capture the exact start and stop times, the specific interventions provided, and the participant's response to the job coaching.

8. Billing, Rates and Claims

Supported Employment under the CHOICES Waiver is reimbursed on a fee-for-service basis directly by South Dakota Medicaid. Providers submit claims through the DSS Provider Online Portal or via an approved clearinghouse using standard EDI 837P formats.

Services must be prior-authorized by the waiver case manager before any billable activity occurs. Rates are established by the South Dakota legislature and published in the DHS fee schedule; providers cannot bill Medicaid for services provided concurrently with other waiver services.

9. Approval Sequence and Timeline

Becoming a fully approved Supported Employment provider in South Dakota is a sequential process that typically takes 3 to 5 months from initial business registration to the first billable service. Steps cannot be completed out of order.

The longest phase is often the DHS Readiness Review and contracting process, which must be fully finalized before the DSS Medicaid enrollment application can even be initiated. Delays in submitting compliant policy manuals will significantly extend this timeline.

10. Common Denials and Survey Findings

The most frequent cause for application denial in South Dakota is attempting to enroll through the DSS Medicaid portal before securing the DHS Purchase of Services Agreement. DSS will automatically reject these premature applications.

During post-enrollment audits and surveys, DHS frequently cites providers for failing to maintain strict compliance with the HCBS Settings Rule, particularly regarding community integration, or for billing discrepancies where service notes do not match the authorized ISP goals.

11. Key Contacts and Resources

Prospective providers should begin their journey by contacting the DHS Division of Developmental Disabilities to request the LTSS HCBS Provider Self-Assessment. Technical assistance for the Medicaid enrollment portal is handled separately by DSS.

Providers are strongly encouraged to review the South Dakota HCBS Settings Guide and the LTSS Provider Policy Manual before drafting their agency policies to ensure alignment with state expectations.

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