Harvey Peeler

The S.C. Senate gave key approval Thursday to a bill allowing immediate cuts in state payments to doctors and hospitals that treat patients in the state-run health care program for the poor and disabled.

Gov. Nikki Haley and the Department of Health and Human Services have sought to cut those payments in order to make up part of a $225 million deficit at the state’s Medicaid agency. Agency director Tony Keck said the state could save $2.4 million between now and June 30 for every percentage point that it cuts those payments.

The bill also requires HIV, AIDS, cancer and mental-health patients to use generic drugs or get prior approval from the state’s health agency to use more expensive, non-generic drugs.

The Senate’s action follows that of the House’s budget-writing committee, which has approved a spending plan for next year that would cut $125 million from what doctors and hospitals are paid.

However, the House Ways and Means Committee on Thursday sought to hedge that bet, setting aside $70 million in cigarette tax revenue in case doctors and hospitals are too hard-hit by the cuts.

A South Carolina Hospital Association analysis said a $100 million cut in what hospitals are paid would result in 2,600 lost jobs and the closing of some hospitals. Some doctors also might stop seeing Medicaid patients, the hospitals warned.

The health care cuts must pass the full House and Senate before they become law, which is expected. South Carolina is the only state in the country that now bars its Medicaid agency from reducing what doctors are paid.

During debate Thursday, lawmakers worried they were giving Keck and Health and Human Services too much latitude, allowing the agency to impose any cut without any supervision.

“They’re all willing to take the cuts,” said state Sen. Ronnie Cromer, a Newberry County pharmacist, of doctors and hospitals. “They’d just like to have a ballpark of how much the cuts will be.”

Keck said his agency must advertise any proposed cuts for 30 days before they can take effect. He said he will work with health care providers to find better ways to save the $125 million that his agency wants to save, but that any rate cuts imposed now likely would continue in next year’s budget, which takes effect July 1.

State Sen. Harvey Peeler, R-Cherokee, the bill’s sponsor, said lawmakers should grant the health agency the ability to deal with rising health care costs.

“He wants the ability … to right the ship,” Peeler said of Keck. “We need to address this problem now.”

In the House, Republicans addressed Democratic concerns about health care cuts by earmarking additional cigarette tax money for Medicaid.

A 50-cent-a-pack cigarette tax took effect in July, but lawmakers allowed the money to accumulate in a savings account for a year. The House budget spends two years of cigarette tax revenue. Part of the money — an estimated $70 million — would be put into an account for Health and Human Services to offset the impact of budget cuts on doctors and hospitals, if needed.

“We will now be able to ensure that all the people in the state … even those in rural South Carolina, that they have access to health care,” said state Rep. Harry Ott, D-Calhoun.

Courtesy: The State