July 8, 2011: Medicaid Cuts Looming

Beginning July 1, patient co-pays will increase from $2.30 to $3.30 — the maximum amount allowed by federal law — for doctor, clinic, home health and optometrist visits. And for the first time, people enrolled in some programs for the elderly and disabled will be required to make co-pays for some medical services.

Starting July 8, Medicaid reimbursement rates to doctors, dentists and most hospitals will be cut for the second time in three months.

“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,” S.C. Department of Health and Human Services Director Tony Keck said in a statement.

Associations representing doctors and hospitals, however, have said the cuts will harm patients when the financial burden causes doctors to stop accepting Medicaid altogether.

“There are physicians that could be severely harmed by these additional cuts, which means that their patients may have added difficulty finding adequate care,” Todd Atwater, CEO of the S.C. Medical Association and a Republican legislator from Lexington, said in a statement.

Some doctors from the medical organization took a more tempered stance.

Gregory Tarasidis, the group’s former president, said the reductions announced Monday are reasonable compared with the 15 percent cuts that he said were “a real possibility earlier this spring.”

Monday’s announcement comes on the heels of an across-the-board 3 percent reimbursement rate reduction in

April. That cut will remain in effect for the upcoming fiscal year, state officials said.

When the April reductions took effect, hospital officials had been alarmed that small and rural hospitals, which already were struggling financially, would go out of business because of the high volume of Medicaid patients they serve.

Monday’s cuts spare two dozen such hospitals from additional cuts. The remaining hospitals will see a 4 percent reduction for both inpatient and outpatient services.

Allan Stalvey, a spokesman for the S.C. Hospital Association, said he was pleased the 24 hospitals were exempted, but worried large and urban hospitals would be affected disproportionately. “They’ll have to figure out ways to reduce costs,” Stalvey said. “It could be jobs or some service areas and things for the community.”

Medicaid no longer will cover treatment for hospital-acquired infections, meaning hospitals now must absorb those treatment costs.

Monday’s reductions vary by profession. Most primary care and pediatric specialists will see a 2 percent cut while dentists and anesthesiologists will see a 3 percent cut. Payments will be reduced by 5 percent to oncologists, endocrinologists, gastroenterologists, gynecologists and cardiologists. Payments will be cut by 7 percent to personal care attendants, podiatrists, audiologists, psychologists, chiropractors and some other health professionals.

The Medicaid agency also announced other projected savings Monday.

The agency hopes to reduce the number of low-birth-weight babies — whose care costs the state about 10 times that of normal-sized babies — by encouraging mothers to take prenatal vitamins and giving them drugs to reduce the chances of premature deliveries. The department expects nearly $1 million in savings from reducing the number of elective cesarean sections, spokesman Jeff Stensland said.

Additionally, the state will add 550 Community Long Term Care slots for people who qualify to live in nursing homes but prefer to stay in their own homes, where the state can care for them at about one-third the cost, Stensland said. Nearly 12,000 people currently are enrolled in that program, he said.

The $125 million in savings already is built into the agency’s $724.8 million state budget request, Stensland said. The current request still is about $435 million more than the current fiscal year, when the budget was supplemented by one-time federal stimulus dollars, he said.

What to expect

Changes taking effect July 1 for Medicaid patients:

• Patient co-payments will increase from $2.30 to $3.30 for doctor, clinic, home health and optometrist visits.
• Patients older than 19 who are enrolled in Community Long Term Care or some programs through the Department of Disabilities and Special Needs no longer are exempt from making co-pays.
• Medicaid no longer will cover home visits from social workers.
• Medicaid will reduce pest control, available to some people who are at risk for being placed in nursing homes, from six to four treatments annually.

Among the changes taking effect July 8 for Medicaid providers:

• Reimbursement will be cut 7 percent for lab and X-ray technicians; personal care attendants; podiatrists; audiologists; speech, physical and occupational therapists; behavioral health providers; psychologists; and chiropractors.
• Reimbursement will be cut 5 percent for optometrists, oncologists, endocrinologists, gastroenterologists, gynecologists and cardiologists.
• Reimbursement will be cut 2 percent for primary-care and pediatric specialists and their nursing staffs and for providers serving a host of programs through the S.C. Department of Disabilities and Special Needs, including adult day care workers. Obstetricians, neonatologists and maternal and fetal medicine doctors will be exempt from this rate cut.
• Reimbursement will be cut 3 percent for dental services and anesthesiologists and their nursing staffs.

Visit www.scdhhs.gov to view a complete list of changes.