The state Department of Health and Human Services announced Monday its plan to cut state Medicaid expenditures by $125 million.
The cuts would take effect July 8, for the state’s 2012 fiscal year.
"The proposed reductions . . .are the result of months of individual meetings with Medicaid providers, provider associations, legislators and other stakeholders," the state’s health agency said in a press release. "The agency’s goal is to preserve quality of care and access while working with stakeholders to reduce excess costs such as duplicative and unnecessary services, inefficiently delivered services and fraud.
Facing a $228 million deficit in its Medicaid program for the current budget year, the state cut its payments to doctors and hospitals by 3 percent in April. Prior to that cut, South Carolina had been the only state to bar its health agency from cutting payments to health-care providers.
The health agency said the new cuts include:
-- More than $18.5 million in savings that will be achieved through working with hospitals, doctors and others to reduce the number of high-cost, low birth-weight babies born in South Carolina; providing more opportunities for individuals with disabilities and the elderly to receive services in their homes and communities rather than in more expensive institutions; increasing patient co-payments for routine services to the maximum amount allowed by federal law; and reducing over-utilized services such as elective C-section deliveries and hospital readmissions.
-- Cutting reimbursement charges by $52.5 million, including a 2 percent reduction for primary care and pediatric specialists, excluding obstetricians, neonatologists and maternal and fetal medicine physicians; a 3 percent reduction in dental reimbursements; a 4 percent reduction for in-patient and out-patient hospital services, excluding isolated rural, small rural, and critical access hospitals; elimination of payments to out-of-state hospitals for graduate medical education and a 10 percent reduction in these payments to in-state teaching hospitals; and eliminating payments for illnesses contracted in a hospital, such as certain infections. Other providers will see rate reductions of up to 7 percent, the state helath agency said.
The 3 percent rate cut adopted in April for all providers will continue in fiscal 2012, resulting in additional savings of $38.6 million, the agency said, adding it expects to save another $15.4 million as part of ongoing negotiations with providers.
Health and Human Services Director Tony Keck said the cuts are necessary to ensure the long-term viability of the state’s Medicaid program and prevent cuts to services. He added the cits announced Monday will allow his agency to operate within its budget for fiscal 2012.
"Medicaid Directors in red and blue states are generally forecasting fiscal train wrecks in the coming years," Keck said in a statement. "Ultimately, 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."
Medicaid providers and the public can submit comments on the proposal to the agency by July 6 at 5 p.m. Comments can be submitted to:firstname.lastname@example.org.