SC Medicaid Cuts To Cripple Several State Hospitals

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From The Post and Courier:

By Renee Dudley–Friday, June 10, 2011

State Medicaid cuts announced earlier this week will cause Charleston-area hospitals to lose tens of millions of dollars, forcing at least one of them to shed jobs and reduce services, hospital officials said.

Reductions announced Monday will cost the Medical University of South Carolina Hospital about $20 million in the upcoming fiscal year, said Lisa Montgomery, the hospital’s vice president for finance.

The loss will force the hospital to eliminate jobs, which probably would happen through attrition rather than layoffs, Montgomery said. Specific service reductions are yet to be determined, she said.

Roper St. Francis Healthcare expects to lose about $2 million among its hospitals and physician practices but “will be able to absorb the cuts without losing jobs,” said David Dunlap, president and CEO of the hospital system that oversees Roper, Bon Secours St. Francis and Mount Pleasant hospitals.

Michael Dacus, chief financial officer for East Cooper Medical Center, also expected no layoffs: “We do not anticipate the latest Medicaid reduction to be a major impact to the hospital,” Dacus said in a statement. He declined to provide the expected financial impact of the cuts.

Officials of Trident Health System, which oversees Moncks Corner, Summerville and Trident medical centers, declined comment.

On Monday, the S.C. Department of Health and Human Services announced a variety of reductions in reimbursement through Medicaid, the health insurance program for the poor and disabled. Coupled with reductions the agency announced in April, the cuts are expected to save the state about $125 million in the fiscal year that begins July 1. The federal government provides a three-to-one match of state Medicaid dollars — funds MUSC and Roper St. Francis Healthcare included in their loss estimates, officials from those hospitals said.

Beginning in July, the state agency will reduce Medicaid payments for inpatient and outpatient hospital procedures by 7 percent and cut doctors’ reimbursement by up to 10 percent. Additionally, the agency said it would stop paying for the often-costly care associated with hospital-acquired conditions, including infections that can send patients to expensive intensive care units. And starting in October, the agency will reduce the amount of money it compensates hospitals for uninsured, non-paying patients.

That specific reduction is not factored into MUSC’s projected $20 million loss, Montgomery said. Last year, MUSC provided $120 million in uncompensated care and received $30 million in reimbursement through the Medicaid program, she said.

The Roper St. Francis Healthcare system provides about $35 million in uncompensated care annually, Dunlap said. He said he did not know how much was reimbursed through Medicaid last year.

Officials from East Cooper Medical Center and Trident Health System declined to provide figures on uncompensated care.

Exempt hospitals

Hospitals that meet certain criteria, including small facilities in rural areas, are exempt from the Medicaid reimbursement reductions. Those hospitals include:

Abbeville County Memorial

Allendale County Hospital

Edgefield County Hospital

Fairfield Memorial Hospital

Williamsburg Reg. Hospital

Clarendon Mem. Hospital

Coastal Carolina Med. Ctr.

Bamberg County Memorial

Barnwell County Hospital

Chesterfield General

Hampton Reg. Medical Ctr.

Lake City Comm. Hospital

Marion Co. Medical Center

Doctors Hospital of Augusta (burn hospital for South Carolina residents)

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