Harvey Peeler

Governor wants lawmakers to lift decree so she can balance Medicaid agency’s budget

BY YVONNE WENGER

ywenger@postandcourier.com

Thursday, February 17, 2011
Gov. Nikki Haley called on legislators Wednesday to loosen their grip on the state’s Medicaid agency so she can balance its $228 million deficit.

Haley said she needs lawmakers to lift a legislative decree, known as a proviso, that stops the agency from cutting the rates paid to doctors and hospitals that treat Medicaid patients. South Carolina is the only state in the nation that is barred from doing so. Rates here are 16th-highest in the nation.

Her comments came as she announced that in her first month in office she has wiped out the second of the three department deficits that she inherited.

Under her watch, the Department of Corrections erased a $7.5 million deficit and the Department of Social Services eliminated a $28 million deficit, she said.

Haley’s call for eliminating the Medicaid proviso came two days after The Post and Courier published an investigation revealing that the state could save tens of millions of dollars by tossing some of the 946 provisos legislators wrote into the state’s $5 billion budget.

Provisos can be abused, but lawmakers have said they provide a useful function by giving instructions for agencies to carry out the Legislature’s budget plans. They also are similar to Congressional earmarks because state lawmakers can use them to protect special interests or funnel money to pet projects.

Haley said legislative authority to negotiate lower reimbursement rates for Medicaid providers would help manage the deficit. A 10 percent cut in those rates could save more than $100 million a year.

House budget writers on Tuesday recommended that the state lift the proviso on provider rates in next year’s budget that begins on July 1. Senate Majority Leader Harvey Peeler, R-Gaffney, is leading an effort to allow the rate cuts immediately. He said he has faced a lot of push-back from the filing of the legislation.

“It is strictly special-interest driven,” Peeler said. “We’ve experienced the largest economic downturn since the Great Depression. These are extraordinary times. We need extraordinary measures. It’s obvious we’re not going to raise taxes.”

Peeler said The Post and Courier’s reports on provisos have raised discussions inside the Statehouse as to how to improve the process.

“It’s all about shining a light,” Peeler said.