Officials attempt money talks

South Carolina officials are trying to set up a meeting to talk federal officials out of making the state repay $100 million in Medicaid money, a spokesman said.

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South Carolina is being asked by the federal Centers for Medicare and Medicaid Services to repay the matching money that the agency provides to support the health care program for the poor and disabled. Medicaid also is a major source of funding for nursing homes.

The meeting with acting CMS administrator Dennis Smith has not been set, regional spokesman Larry Jones said from Atlanta.

The state ran afoul of federal rules by using funds from out-of-state hospitals to draw down extra federal funding to support providers who carry a heavier Medicaid load, Mr. Jones said.

Medical College of Georgia Hospital and Clinics is one of those "disproportionate share" hospitals that transfer funds to the state program, then get their money back plus an extra payment once it is used to get the federal matching funds. MCG Health Inc. provides about $2 million a year and receives $3 million back, said CEO Don Snell.

The state has informed MCG Health about the disputed payment, and it has already been written off, Mr. Snell said.

"We have been told not to expect that money," he said, even though MCG Hospital and Clinics was South Carolina Medicaid's 12th largest provider, at $20.4 million last fiscal year.

Georgia uses a similar program with its heavy Medicaid hospitals to try to get extra reimbursement, but it does not use out-of-state funds, said Andy Boisseau, a spokesman for the Department of Community Health.

"Wow," he said when told of the payment demand. "That's a big chunk of change for a state like South Carolina."

Even with the extra payments, MCG Health will lose about $30 million in actual costs from treating Georgia and South Carolina Medicaid patients, Mr. Snell said.

Reach Tom Corwin at (706) 823-3213

or tom.corwin@augustachronicle.com.

--From the Thursday, February 5, 2004 printed edition of the Augusta Chronicle