printer friendly format sponsored by:
The New Media Department of The Post and Courier

THURSDAY, JANUARY 06, 2005 12:00 AM

Proposal calls for shift in Medicaid reimbursements for some services

MEDICAID

BY JONATHAN MAZE
Of The Post and Courier Staff

Gov. Mark Sanford's budget blueprint would mean more spending in some areas of health care as well as cuts in others, but even those on the receiving end were left grumbling.

In unveiling his 2005-06 spending plan, Sanford proposes to cut Medicaid reimbursements to pharmacies and use the savings to boost payments to doctors and nursing homes, in each case moving South Carolina's program closer to regional averages for state Medicaid programs.

Nursing home advocates said Sanford's proposal to boost payments by $7.8 million in the next fiscal year doesn't go nearly far enough to make up for a loss in federal funds. The result: Nursing homes estimate they would see a 12 percent cut in reimbursements next year.

"It's terrible," said Randy Lee, director of the South Carolina Health Care Association, a nursing home industry lobbying group. "I appreciate him putting us in the budget. But it's about ($13 million) in state dollars short."

Overall, Sanford's budget would set aside $1.2 billion in state general funds for health care, or about 5 percent more than last year. Total spending, including federal and other dollars, would increase 8 percent, from $5.6 billion this year to more than $6 billion next year, more than a third of the total state budget.

The budget does not figure in any savings from the administration's proposed Medicaid reform plan that would give most of the state's 800,000 recipients a debit card to use for doctor visits and prescription drugs. That program is months away from federal approval.

The governor's budget does call for spending more on preventive care.

He notes that South Carolina ranks 47th among states in overall health but 11th in per-capita health spending.

"We are clearly not getting a significant value on our health care dollars," Sanford wrote in his budget message.

Sanford's budget proposal would spend $5 million in grants for efforts to prevent health problems; an additional $1 million to help the Hollings Cancer Center's efforts to earn a coveted cancer center designation, and another $1 million for increased breast and cervical cancer screening, among other things.

The governor wants to shift reimbursements to change what he views as a disparity in how health care providers are paid.

South Carolina pharmacies, Sanford says, are paid among the highest rates in the Southeast. So the governor is proposing to cut those payments by $16.5 million in state funds next year.

Because the federal government matches state spending for Medicaid on a more than 2-for-1 basis, that cut would mean a total reduction that is at least three times that amount.

Jim Bracewell, executive vice president of the South Carolina Pharmacy Association, said Medicaid already has made numerous efforts to cut pharmacy prices in recent years.

"I think it's very unfortunate of the governor's office to seemingly pit one health care provider against the other," Bracewell said. "We don't suggest cutting teachers' salaries to put more highway patrolmen out on the streets."

Doctors, meanwhile, have been complaining for years that low payments from Medicaid are discouraging some of them from seeing Medicaid patients. In response, Sanford would boost payments by $8 million in state funds, according to the South Carolina Medical Association.

"We love it," said Todd Atwater, SCMA's chief executive. "It's a long time coming."

Nursing home advocates' reaction to the budget was different.

Lee, of the South Carolina Health Care Association, said that the state needs to increase its general fund appropriation by $21 million to make up for a loss of funds from a federal program used the past two years to increase nursing home payments.

The $7.8 million, Lee said, comes more than $13 million short. Such a loss means nursing homes would lose $15 a day per Medicaid resident.

"They'd close," Lee said. "I don't know of anybody in this state that could take a (12 percent) rate decrease."


This article was printed via the web on 1/25/2005 4:19:43 PM . This article
appeared in The Post and Courier and updated online at Charleston.net on Thursday, January 06, 2005.