The cash-strapped state agency that runs Medicaid in South Carolina has come up with a new plan to get its costs under control.
Department of Health and Human Services Director Tony Keck told a House subcommittee Wednesday he has found a way to trim more than $200 million off the agency’s budget. The catch? It would require cutting how much the state pays hospitals and doctors to treat Medicaid patients.
Some hospitals said they can’t afford the change and may have to lay off employees, while rural hospitals said they may have to stop serving Medicaid patients. Governor Nikki Haley said her director was working to make sure that doesn’t happen.
Keck said the agency would need $1.1 billion next year. While that’s more than the state has given in the past, it is still a smaller budget than last year’s, which was funded largely by federal stimulus money.
Currently, DHHS is operating at a $225 million deficit. Keck says the main reason for the lack of money is an eight percent growth in the number of people receiving Medicaid in the state.
Along with provider rate cuts, Keck also proposed cutting administrative fees paid for patients in managed care plans, and moving forward with previously-announced ideas to eliminate some optional services, such as speech and disability therapy.
However, any plan to lower provider rates would require help from state legislators, who have consistently put language in the budget that prevents the agency from cutting payments to doctors.