South Carolina’s Medicaid director says his agency will begin covering 100 percent of the costs for rural hospitals to provide “charity care.” That is, free or reduced health care for low-income South Carolinians who may not be able to afford it. It’s also known as “uncompensated care.”
State Department of Health and Human Services director Tony Keck told legislators in the House Ways & Means Committee last week that the idea is to help those rural hospitals that are struggling to stay afloat financially.
“We’re trying to target our limited money to the places where there is the most need,” he said in testimony Thursday. “As you look at rural hospitals… and the types of patients that they see, they see a large number of uncompensated care patients and a large number of Medicaid and Medicare patients who pay a lot less.”
Gov. Nikki Haley first announced the “Rural Hospital Transformation” idea during her State of the State address on January 16. “We’ve long known that rural hospitals face challenges that larger hospitals don’t, and now, for the first time ever, the state of South Carolina is going to treat them that way,” Haley said in a release the next day.
19 hospitals that Medicaid has designated as “rural” in the state will receive 100 percent funding for any uncompensated care, starting in October. The investment, projected to cost $20 million across the 19 hospitals, will come from South Carolina’s Medicaid Disproportionate Share Hospital (DSH) program, Keck said.
The program reimbursed 57 percent of the charity care costs for all hospitals in the state last year, for a total of $461 million. The rate was flat and did not vary based on the hospital’s location or patient demographics. Now, those 19 hospitals will receive a larger share of the pot.
State Rep. Gilda Cobb-Hunter (D-Orangeburg) said she likes the idea behind the plan, but is concerned that it will not be implemented until October. She said she’s worried some hospitals could go out of business by then, much like Bamberg County Hospital did last year.
“I’m just trying to figure out whether or not Rural Hospital Transformation is going to come soon enough (and) quick enough for those hospitals that… may be on the bubble and be very close to closing,” she told Keck during the hearing.
But Keck said Bamberg County faced other larger issues beyond Medicaid, losing many of its patients to the nearby Orangeburg Regional Medical Center in recent years. However, he did not dispute that other rural hospitals are struggling to adapt as specialty (and more financially lucrative) care becomes centralized in larger hospital networks.
“Putting $20 million into rural hospitals… is a major, major investment in the ability of those hospitals to thrive, and not just survive,” he said, “But, I put ‘transformation’ because there are rural hospitals that, even with additional money,… if people continue just to drive on by to the next large, tertiary hospital that’s only 30 minutes down the road to get their surgery, there’s very, very, very little we could do as a state to prevent that.”
19 Hospitals Participating in Rural Hospital Transformation Initiative:
Abbeville County, Allendale County, Barnwell County, Chester County, Chesterfield General Hospital, Clarendon Memorial Hospital, Coastal Carolina Hospital, Colleton Medical Center, Edgefield County Hospital, Fairfield Memorial Hospital, Hampton Regional Medical Center, Lake City Community Hospital, Laurens County Hospital, Marion County Medical, Marlboro Park Hospital, McLeod Regional Medical in Dillon, Newberry County Hospital, and Williamsburg Regional Hospital