The South Carolina House voted Tuesday to repeal a 2008 proviso, or budget law, that forbids the state Medicaid agency from cutting reimbursement rates to health providers.
If Gov. Nikki Haley signs the bill, doctors and other health providers who accept Medicaid would face the first reimbursement rate cut in at least three years. Haley has expressed support for the bill in recent months. It is not clear how soon the full legislature will ratify it for her signature.
The 67-45 vote comes about three months after The Post and Courier published a report showing the 2008 proviso's key proponent has received tens of thousands of dollars in campaign contributions from hospitals and physicians. Just more than a week after that report, two state senators filed a bill to repeal the proviso.
Anticipating the bill's passage, the S.C. Department of Health and Human Services already has announced a 3 percent rate cut for providers who accept Medicaid, the state- and federally-funded health insurance program for the poor.
The cut was scheduled to take effect Monday, but the House still had not voted on the bill by then. The state Senate passed the bill in mid-March.
Health and Human Services officials have not publicly said when they now expect the rate cut to take effect.
The state loses an estimated $80,000 in savings daily before the cut takes effect, department spokesman Jeff Stensland said. The reduction was expected to save the state about $7.5 million and eliminate the need for further program cuts for people enrolled in Medicaid.
Even with the 3 percent cut, which will remain in effect when the new fiscal year begins in July, the state Medicaid program's remaining budget deficit still would be about $117.5 million, Stensland has said.
Department director Tony Keck called the bill's passage "an important step in helping South Carolina deal with out-of-control health care costs." The bill "allows Medicaid to protect patient services" that otherwise might be axed to save money, Keck said in a statement.
South Carolina is one of the few states where the Medicaid agency is barred from adjusting reimbursement rates to health providers. During the recession, all but a handful of states have used the tactic to save money and stave off cuts to entire programs that help the needy, such as therapy and dental services.