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SC Medicaid director touts agency savings

Published on NewsOK Modified: January 17, 2013 at 6:55 pm •  Published: January 17, 2013

COLUMBIA, S.C. (AP) — South Carolina's Medicaid director said Thursday his agency's savings initiatives are allowing tens of millions of dollars to be spent on the state's many other needs.

Under the Department of Health and Human Services' preliminary budget request last fall, the escalating cost of Medicaid would have eaten up every dollar of additional revenue currently projected to come into state coffers next fiscal year.

But Gov. Nikki Haley's executive budget proposal recommends spending an additional $156 million. That's about $40 million less on the government health care program for the poor and disabled than that initial request.

Director Tony Keck told the House budget-writing committee that won't be a problem, saying the initial report was out before his agency could calculate savings from various initiatives. That included lowering administrative rates to managed care organizations and ending payments for unnecessary early deliveries, which were being scheduled for convenience but are more expensive and can result in even more costly intensive care stays.

Other initiatives to clamp down on costs are in the works, he said.

"We can spend less money on health care and get better results," Keck told the House Ways and Means Committee.

The federal government also slightly increased its share of the joint state-federal program, with the fraction of a percentage point resulting in $10 million less for the state to spend, he said.

The agency's revised budget calls for spending $6.5 billion on Medicaid in 2013-14, with $4.5 billion of that coming from the federal government.

Keck also explained his agency's decision to shift more Medicaid money to the state's small, rural hospitals next year. The 19 designated hospitals will be fully compensated for the cost of caring for people without health insurance, as Haley announced in her State of the State address Wednesday.

He said it's part of the agency's effort to focus on hotspots of poor health and disparities.

This year, the $461 million Medicaid fund covered about 60 percent of the cost of uncompensated care at hospitals statewide. But rural hospitals have a much higher share of patients who can't pay and are much sicker, Keck said.

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