Gov. Mark Sanford is leading a group that includes Senate Finance Chairman Hugh Leatherman and House Speaker David Wilkins.

"If we don't get some waivers, we're really in trouble," Leatherman, R-Florence, said. "We're short of money and if they don't give us some flexibility in our Medicaid program, I don't know what we're going to do."

Leatherman said much of the concern involves payments to hospitals and what's known as "disproportionate share" money. Those funds go to hospitals based on their Medicaid patient caseload 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 and Medicaid Services matched it with $262 million.

But the federal agency is changing its interpretation of what gets matched and is paying less in some cases.