SC Medicaid Cuts Projected To Save $125 Million

From Businessweek:

By SEANNA ADCOX–COLUMBIA, S.C.

South Carolina’s Medicaid agency announced Monday it plans to cut fees paid to doctors, dentists and other medical providers by between 2 percent and 7 percent next month.

The announcement follows 3 percent across-the-board cuts enacted in April for those who treat the state’s poor and disabled, expected to save $38.6 million in 2011-12.

The agency expects to save $52.5 million through additional cuts, including 2 percent for primary care and pediatric specialists, 3 percent for dentists, and 4 percent for hospital services, excluding small, rural hospitals.

The agency also plans to increase patients’ per-visit contributions by $1 to $3.30, which is the maximum standard co-payment that federal law allows. Other money-saving moves include reducing Caesarean-section deliveries.

The combined actions are expected to save $125 million in the fiscal year that starts July 1. That was the goal that Department of Health and Human Services Director Tony Keck told legislative budget writers he could save with rate cuts. But he pledged to vary the cuts depending on what providers could handle.

The agency had estimated a $225 million deficit for the budget year that ends June 30. But the state’s financial oversight board has approved bailing out $200 million of that, to be covered by state surpluses or reserves.

A law signed in April gave Keck the ability to cut rates. Since 2008, legislators had barred the agency in budget laws from reducing rates, making South Carolina the only state to do so.

An agency spokesman said Keck held more than 60 meetings with providers. In a statement, the South Carolina Medical Association applauded Keck for listening to its members’ concerns.

With a 15 percent cut being a possibility earlier this year, the announced reductions “show that Director Anthony Keck has heard our message loud and clear: there needs to be a priority placed on physicians and their patients,” said Dr. Gregory Tarasidis, the association’s immediate past president.

While there are no winners in the situation, Keck made a strong effort to ensure patients are properly cared for, he added.

Still, the group remains concerned the cuts could reduce patients’ access to care.

“The SCMA has and continues to oppose Medicaid reimbursement cuts to our physicians,” said its chief executive, Todd Atwater. “While some may be able to absorb these cuts, there are physicians that could be severely harmed by these additional cuts.”

The group pledges to monitor the cuts and their impact on patient access.