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Medicaid doctors' pay cut in bill

The doctors and hospitals that provide South Carolina's Medicaid services said Tuesday there will be less service and lost jobs if the state cuts the amount they are paid.

They voiced their concerns as a Senate committee took up a bill that would give the state Department of Health and Human Services more control of payment levels. The committee will take up the bill again next week.

Health and Human Services Director Anthony Keck said the state needs to scrap laws restricting his control of rates as a step in dealing with deficits threatening to shut down health care programs for the poor, elderly and disabled.

"We need to get money out of the program," Keck said.

Small hospitals are worried that payment cuts of 5 percent or more are on the way, with or without plans to give the Department of Health and Human Services flexibility to tinker with rate schedules for doctors and hospitals, said Allan Stalvey, executive vice president of the S.C. Hospital Association.

"We don't know what we're dealing with in terms of cuts," Stalvey said. "I can tell you that some of the small hospitals cannot withstand any type of cut like that." He warned that 2,600 hospital jobs statewide would be lost if rates are cut by 10 percent.

The Medicaid program on Monday ended access to tooth extractions to save money. And dentists and oral surgeons worry more cuts are on the way. "This is about access to care that is going to be significantly limited with a decrease in fees," said Jim Mercer, a Columbia oral surgeon.

Keck said cutting rates to providers can be paired with other law changes that make it easier or less expensive for doctors and hospitals to provide care.

For instance, Keck said nursing homes may be able to lower staffing ratios because safety requirements may have changed. While they may be paid less, Keck argued they might be able to handle Medicaid clients more profitably with less staff.

But care providers are more than a little leery. Keck has been on the job for two weeks and legislators are months from writing a budget that will ultimately decide just how much of the Medicaid program is paid for in the new fiscal year as it faces a mammoth deficit.

Keck has found annual savings of $14 million yearly by trimming programs, a fraction of the $228 million deficit the agency faces in the current fiscal year. And the program is $663 million short in the upcoming budget year with its problems accounting for much of a $829 million gap in the $5.1 billion budget legislators are now writing.

Keck's boss, Republican Gov. Nikki Haley, has ruled out raising taxes to deal with the problems and has rejected care providers' efforts to raise taxes on themselves. And it doesn't help lower costs for providing the services, Keck noted.

Keck said there's a balance between payments to doctors and health.

"But simply paying providers more does not make better health or else South Carolina, which has some of the highest provider rates in the country, would then have some of the best health outcomes in the country," Keck said. "It doesn't work that way."

Whatever happens with the legislation, the state Medicaid system's fate will be decided next week. The state Budget and Control Board is set to decide whether it will bail out the program by allowing it run that $228 million deficit and let the state's budget, surplus or reserves absorb the shortfall. Without that, the program can't operate.

"It would be impossible," Keck said.