The state’s Medicaid agency says it has a plan to cut $125 million off its budget for next year by slashing hospital payments and requiring patients to contribute more.
The bulk of the cuts at Department of Health and Human Services would come through lower provider rates for hospitals that treat Medicaid patients. The state agency said it tried to keep the cuts as low as possible so hospitals could preserve quality of care.
DHHS is expected to finish the current fiscal year with a $200 million deficit. Agency director Tony Keck said the proposed cuts, along with higher projected funding this upcoming year, would allow the department to operate within its means next year.
Medicaid Directors in red and blue states are generally forecasting fiscal train wrecks in the coming years. Ultimately, the state must continue to drive excess cost out of the entire system if we are to truly have any chance of making health care more affordable to more people and to prevent health care costs from overwhelming our state budget.
In April, the Legislature passed a bill that gave the agency the power to make the cuts. Prior to that, South Carolina was the only state that locked its provider rates in place. The agency estimates it will save $38.6 million this year with an across-the-board three percent reduction to all providers.
The newly announced cuts include eliminating payments completely for out-of-state hospitals that teach grad students from South Carolina. It would also trim 10 percent off in-state teaching hospitals.
Hospitals would also no longer be reimbursed to treat patients that picked up infections while staying at the hospital.
Patient co-pays will increase from $2.30 to $3.30 for doctor, clinic, and home health visits. That’s the maximum allowable by federal law. People enrolled in programs for the disabled and elderly would also have to make co-pays on some services for the first time.
The proposal would cut 4 percent off in-patient and out-patient services, but would make an exception for small, rural hospitals.
The DHHS announcement said primary care and pediatric specialists would see a 2 percent reduction, while dental reimbursements would drop by 3 percent.
The public has until July 6 to comment on the proposal. To read the announcement, click here.