S.C. team recovers Medicaid millions

WASHINGTON — South Carolina politicians sewed up a $125.3 million hole in this year’s state budget during a meeting Wednesday with federal Medicaid administrators.

Medicaid officials had been ready to withhold that sum, which state lawmakers and Gov. Mark Sanford already factored into the $5.1 billion state budget.

“If they had implemented what they had proposed, it would have been a budget death sentence for South Carolina,” said U.S. Sen. Lindsey Graham, R-S.C. “That’s not going to happen.”

“It would have been catastrophic,” said Gov. Mark Sanford, who flew up for the meeting.

With Sanford, a planeload of South Carolina’s top elected officials joined almost all of the state’s congressional delegation to make their case to Dennis Smith, acting director of the Centers for Medicare & Medicaid Services.

In the lobbying brigade were Sanford, Graham, six of the seven other members of the congressional delegation, House Speaker David Wilkins, Senate Finance Committee chairman Hugh Leatherman and House Majority Leader Richard Quinn.

Smith agreed that South Carolina would get the $125.3 million it expected for the 2003-04 fiscal year, which ends June 30. It is a significant part of South Carolina’s $4.2 billion Medicaid program, which reaches 805,000 poor, disabled and elderly South Carolina residents.

Despite Wednesday’s good news, the state is hardly off the hook.

Federal officials say South Carolina is misinterpreting some key rules of Medicaid, the federal-state program that pays for medical care for the poor, the elderly and children.

The rules involve payments to hospitals and “disproportionate share” money. Those funds go to hospitals based on their Medicaid patient caseload. They’re designed to make up the difference between government payments and private insurance payments.

South Carolina put $113 million into that program this year and the Centers for Medicare & Medicaid Services matched it with $262 million.

Though the sum in question for the current budget is safe, next year’s budget is another story.

South Carolina is asking for some federal Medicaid matching money for which it does not qualify, Smith said. More specifically, the state is defining some hospitals as public when they are actually private, and therefore not eligible for matching funds.

South Carolina is also asking for matching funds for some out-of-state hospitals, he said — another violation of the rules.

“I don’t agree with some of their findings,” said Graham. “Such as the status of (Palmetto Health) Richland hospital as not being a public hospital.”

Both Smith and the S.C. leaders said they expect a verdict soon on how South Carolina will fare with future federal Medicaid funds.

“We need to know what the rules are,” Wilkins said.

Reach Markoe at (202) 383-6023 or lmarkoe@krwashington.com