South Carolina moved a step closer Thursday to reducing payments to doctors, dentists and other medical providers who treat Medicaid patients - disappointing officials at some Grand Strand hospitals.
The House voted 67-45 to approve a bill allowing the state's Medicaid agency to reduce payments to providers who treat the state's poor and disabled, but the cuts won't happen as soon as officials wanted.
"Proposed Medicaid reimbursement cuts of 10 percent will pose a challenge to all hospitals, physicians and other healthcare entities that provide care to Medicaid enrollees," said Georgetown Hospital System CEO Bruce Bailey.
The Department of Health and Human Services announced a month ago that most Medicaid providers would see a 3 percent cut in their payments starting Monday.
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But that won't happen.
Implementation depended on final passage of the bill, and the measure requires another vote in the GOP-controlled House before heading to the governor's desk. That vote will likely be Tuesday, the next day legislators are in session. Republicans could not get the unanimous support needed to have the final vote happen automatically Friday. The Senate has already approved the measure.
"We are disappointed that Medicaid payments to physicians and hospitals could be reduced," said Grand Strand Regional Medical Center CEO Doug White.
The hospital saw 185,987 patients in 2010, and of those, 16 percent, or 29,828 were Medicaid enrollees, according to hospital spokeswoman Joan Carroza.
"A reduction in Medicaid payments may help balance the state budget, but it will not reduce the need for these patients to receive care. It will only shift the burden and cost to local communities, and there comes a point at which hospitals cannot continue to cost-shift to those who are insured," White said.
Georgetown Hospital System CEO Bruce Bailey said, "Proposed Medicaid reimbursement cuts of 10 percent will pose a challenge to all hospitals, physicians and other healthcare entities that provide care to Medicaid enrollees."
According to the Department of Health and Human Services, the cuts would shave $7.5 million from its projected shortfall.
Each day of delay costs the state $70,000, said agency spokesman Jeff Stensland.
House Democrats argued the true costs of the cuts are layoffs at rural hospitals, which will reduce access to health care. They said rural residents will have to travel farther to see a doctor.
"There are real people behind these cuts," said Rep. Gilda Cobb-Hunter, D-Orangeburg. "You've got good insurance. You don't have to worry about it, but the people you represent ... there's some serious implications to what we are doing."
Democrats tried unsuccessfully to exempt rural hospitals, or hospitals already in a deficit.
The agency has 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.
The agency has previously announced cuts of $3 million in services.
The 3 percent reduction to most of the agency's nearly 34,000 Medicaid providers - who serve more than 952,000 South Carolinians - would continue through June 30. Federal regulations require the agency to exclude some providers, such as hospices, rural health centers and those serving the Catawba Indian Nation.
Since 2008, legislators have barred the agency in budget laws from reducing rates, making South Carolina the only state to do so. The House has already approved removing those restrictions as part of its $5 billion spending plan for 2011-12. The budget is now moving through the Senate.
Staff writer Lorena Anderson contributed to this report.