Next week, Gov. Nikki Haley will propose spending $44.7 million to move more than 1,000 South Carolinians with intellectual disabilities and special needs off waiting lists and into programs that can meet their costly health care needs.

The proposal is a pillar of the governor's statewide budget recommendation to the Legislature that her staff will officially unveil Monday.

The money - $31 million of it coming from the federal government - would be used to enroll at least 1,010 individuals into one of four federal Medicaid waiver programs that cover medical expenses, such as in-home support, medical equipment, nursing services and prescription drugs. The number of people on these waiting lists already exceeds the number that are actually enrolled in one of these programs in South Carolina.

A report provided by Haley's office to The Post and Courier shows that more than 10,000 residents with disabilities and special needs in this state are waiting for a spot to become available in one of these waiver programs. Many of them are children with intellectual disabilities. A conservative estimate by Haley's staff shows that the funds could move about 1,000 residents off the list.

"We encounter desperate people on a regular basis," said Rick Magner, executive director of the Disabilities Board of Charleston County. "Anything that's going to reduce that waiting list is a good thing."

Potential pushback

Haley's office anticipates some political pushback about the proposal because she wants to change the way this $44.7 million flows through the system.

Instead of allocating the funds to the S.C. Department of Disabilities and Specials Needs, a non-Cabinet agency, Haley's office would rather give the money to the S.C. Department of Health and Human Services, also commonly called the state Medicaid agency, over which she has direct authority.

"It's about getting more people more services, but you can't do it in the old way that South Carolina has been doing it for all these years," said S.C. Medicaid Director Tony Keck, a member of Haley's Cabinet.

Keck already controls a $6.5 billion annual budget. He is requesting to spend nearly $7 billion during the next fiscal year.

"Providing the funds to HHS improves the state's overall ability to manage the program," said Christian Soura, Haley's deputy chief of staff. "Although it's DDSN that provides most services to the disabled and special needs communities, it's HHS that is ultimately responsible to the federal government for the use of those Medicaid funds."

Changing the funding mechanism may make DDSN leadership nervous, Keck said, but "we don't want the forest to be lost for the trees that we're actually increasing services for people who need them."

Haley's staff said her past two budget proposals have included additional dollars to DDSN to drive down the number of people with disabilities and special needs on the waiting lists, but the department has made little improvement.

"What we believe is that DDSN is using the money right now as efficiently as they possibly can, it's just fundamentally the way that we've structured the payments . doesn't work anymore and it's actually causing us to stall. There's no question that we've stalled for the past five years here," Keck said. "We're making no progress for the sickest kids in the program."

Accessing services

DDSN spokeswoman Lois Park-Mole said Friday she had no details on the governor's budget proposal but said she was "thrilled" about the prospect of using money to enroll more residents with disabilities and special needs into a Medicaid waiver program from the waiting lists.

"The waiting lists have grown over the past couple of years, and that's a direct result of the budget cuts," Park-Mole said. "Regardless of why they grew, what's really important is the fact that people who are in need of services will be able to access those services."

DDSN State Director Beverly Buscemi did not return a request for comment.

Magner said the governor's proposal could move some 100 Charleston County residents off the waiting list.

"To the people we serve, it doesn't matter how that money is funneled," he said.

The cost to administer these programs is hefty - and these residents with disabilities and specials needs cost the state much more to manage than the average healthy Medicaid patient. Residents who qualify to receive benefits under one program called the Intellectual Disabilities and Related Disabilities Waiver cost the government almost $4,000 a month. There are more than 4,700 residents on this waiting list alone.

Avoiding a lawsuit

Keck said reducing the number of residents on the state's waiting list is the right thing to do, but there are also potential legal pitfalls if the state fails to take action.

"It's actually a civil rights issue," Keck said. "A lot of states around the country have been sued by either the federal government or had class-action suits filed against them for effectively denying the civil rights of individuals with disabilities by not providing services that help them live in the least restrictive setting."

He cited examples of these lawsuits in Georgia, North Carolina and Louisiana, adding it's surprising South Carolina has not yet been sued.

"We are increasingly exposing ourselves to legal problems," he said. "If you wait that long before the Justice Department has to get involved, you're going to end up spending a lot more money in ways that you don't want to do it, as opposed to being proactive."

Expanding Medicaid

Haley's proposal will ultimately require approval from the General Assembly, which reconvenes for 2014 on Tuesday.

The Legislature must agree to front $13 million in state funds so that the Medicaid agency can draw down an additional $31 million from the federal government to fully fund the proposal.

This is, in some ways, an about-face from the 2013 legislative session, during which Keck and Haley were vocal about not spending more federal money on Medicaid. They both adamantly pushed back against heavy political pressure to accept billions of federal dollars to expand Medicaid eligibility under the Affordable Care Act, arguing that growing the state's Medicaid roll won't make the population any healthier.

South Carolina is one of about half of all states that have declined the option to expand Medicaid eligibility under Obamacare.

Keck said he won't consider accepting federal money to expand Medicaid eligibility to more residents when the program is already failing to meet the needs of people who qualify and deserve these services but aren't getting them.

"How can you keep thousands of people on a growing waiting list, sometimes for years, who are our most vulnerable and at the core of our mission, and talk about expanding Medicaid?" Keck said. "If government makes a promise - it shouldn't make promises it can't keep - but when it does, it needs to keep them."

Reach Lauren Sausser at 937-5598.