How Services are Funded
The primary system of funding for Community Support Provider (CSP) services comes from a Medicaid program called Home and Community Based Services (HCBS). HCBS funding allows Medicaid beneficiaries to receive services in their home and community rather than institutional settings. The funding mechanism is most often referred to as an HCBS Waiver. This term is used because the program waives certain Federal regulations pertaining to Intermediate Care Facilities for Individuals with Intellectual Disability (ICF/IID) programs. States can tailor HCBS Waiver programs to target specific populations (e.g. people with developmental disabilities, elderly populations, people with physical disabilities, and people with behavioral conditions) and can operate as many HCBS plans as they desire.
Funding for services is shared between the state and federal government and requires at least a 1/3 non-federal match of the reimbursement rate. Individual reimbursement rates are determined via a rate methodology that uses cost report data, national and state cost data, individual service records, and the Inventory for Client and Agency Planning (ICAP) assessment tool. The methodology combines these factors to generate reimbursement rates for specific services. All CSP reimbursements for the CHOICES Medicaid waiver are fee-for-service based.
All 21 South Dakota CSP Providers participate in HCBS CHOICES waiver programs. Below is a brief description of the HCBS Waiver plans that Community Support Providers utilize.
HCBS Medicaid Waivers are the Right Choice
Home and Community-Based Services (HCBS) Medicaid waivers for people with intellectual and developmental disabilities are widely recognized as both a fiscally responsible and legally sound strategy for states. Decades of data show that supporting people in their homes and communities costs significantly less than institutional care, often by 20–40%, while producing better long‑term outcomes in health, employment, and independence. At the same time, federal disability law—including the Americans with Disabilities Act and the Supreme Court’s Olmstead v. L.C. decision—requires states to offer services in the least restrictive setting appropriate to a person’s needs. HCBS waivers are the primary mechanism that allows states to meet these civil rights obligations while controlling costs, reducing reliance on expensive institutional beds, and strengthening local workforces and community infrastructure. In short, HCBS waivers are not just compassionate policy—they are the most efficient, sustainable, and legally compliant way for states to support people with IDD.
CHOICES Medicaid Waiver
This waiver program provides a wide range of services including residential supports (e.g. group home settings, supervised apartments, and independent living arrangements), health and medical assistance, vocational supports (e.g. pre-vocational facility-based employment, group supported employment, and supported employment), and day habilitation services. It also offers the Shared Living program which is a service model delivered in the participant’s own home, family member home, or host home. This model offers a different approach to services and is administered by a local CSP. All 21 CSPs in South Dakota offer services under the Choices Waiver with a smaller number providing Shared Living.
Family Support Waiver
This waiver program is flexible and designed for individuals to receive services from more natural or informal sources (e.g. family members, friends, community organizations, churches, neighbors etc.). The waiver program also helps participants and families connect to more formalized services available in communities. The participant is assisted by a Family Support Coordinator and has access to a flexible pool of funds for purchasing needed services or products.
Community Training Services (CTS)
CTS is the only funding source available for services that is strictly state general funds. It is the smallest funding program, but also the most flexible. CTS is typically utilized for individuals that need less intensive services or who do not meet the financial eligibility for ICF/IID or HCBS funded services. The three main services provided under the CTS program are prevocational training, community living training and expanded follow along/support.
