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Medicaid Survives In S.C. For Another Fiscal Year

From Greenville Online:

BY LIV OSBY • STAFF WRITER • PUBLISHED: JUNE 15. 2011 2:00AM

Medicaid services will continue through the rest of the fiscal year now that the State Budget and Control Board has voted to fund the Department of Health and Human Services’ remaining budget shortfall.

Last fall, DHHS said it would have to stop providing services in March because of a $228 million deficit. While the board allocated most of that deficit, $22.4 million remained. And officials said service cuts were in the offing unless it was allocated.

Tuesday, that amount was recognized as well.

“We’re happy that by working with the Budget and Control Board and the Legislature we are able to obtain the funds and authority necessary to continue paying Medicaid providers,” DHHS Director Tony Keck told GreenvilleOnline.com.

The department ran short of funds because of the sagging economy. Between 2007 and 2010, more than 100,000 people were added to the Medicaid rolls, according to DHHS.

The $5.8 billion Medicaid program now covers about 21 percent of the state’s residents.

John Ruoff, a South Carolina policy consultant, said critical safety net services, like health care, are needed most when times are hard, but that’s the same time that revenues decline.

“These are obviously difficult times,” he said. “The fundamental problem is they didn’t appropriate enough money in the first place.”

He added, “Even if you think there are legitimate ways to wring costs out of the system, there certainly isn’t time to do it between now and the end of the month.”

Columbia health care consultant Lynn Bailey said the allocation shows revenue collections are up, which is a sign of an improving economy.

“The good news here is that the economy is picking up,” she said. “And one of the signs that things are beginning to move is that revenues have gone up.”

On the other hand, she said, reimbursement cuts recently announced by DHHS mean health-care workers will lose their jobs. And that, in turn, will negatively impact the recovery.

Until recently, DHHS was only allowed by law to cut optional services for adults, such as prescription drugs, hospice care and adult day care. But the Legislature this year permitted the department to cut reimbursements to health care providers as well.

So on top of 3 percent across-the-board cuts in April, DHHS will cut reimbursements to hospitals, doctors and other providers beginning July 8 to help save $125 million in the fiscal 2012 budget and help ensure the long-term viability of the program, Keck said.

The new cuts are targeted, ranging from 2 percent for most doctors to 4 percent for most inpatient and outpatient hospital services.

Providers said the lower reimbursements could impact the services they offer, with hospitals predicting layoffs, hiring freezes and other cost-cutting measures and physicians saying they would be forced to take fewer Medicaid patients.

DHHS said it doesn’t expect access issues.

The changes also include other ways of cutting costs such as allowing more disabled residents to get less expensive home care and attacking waste and fraud. Beneficiary co-pays also will increase.

“The months-long process allowed the department to continue to shrink the size of the funding gap through provider and optional service reductions and gave us time to reorganize management and staff internally to obtain another $1 million in savings,” Keck said.

“I’ve committed to the governor and the Legislature that there will be no more funding gaps of this kind going forward.”