COLUMBIA -- South Carolina has not lost any Medicaid providers since the state cut the rate it pays doctors and hospitals that treat the state's poor, the Department of Health and Human Services director told the governor Tuesday.

Lawmakers warned for years that if the state paid the providers any less that Medicaid patients would have a hard time accessing treatment, especially in the rural areas.

The state might not be so lucky during the next fiscal year when officials plan to cut far more from the rates paid to Medicaid providers.

Tony Keck, Haley's Medicaid director, said the Health and Human Services Department is working with providers to help them cut waste so the rate cuts aren't a detriment to the companies' bottom line.

"If we want to ask them to be more cost effective, we need to make it less costly for them to do business with us," Keck said during the governor's Cabinet meeting.

Medicaid provider rates were cut by 3 percent in April, which saved the state about $7.5 million.

Haley and Keck successfully lobbied the Legislature earlier this year to lift a 2008 budget provision that locked the rate payments in place.

The money saved by eliminating the provision was used to help lower the then-$225 million agency deficit that the Haley administration inherited.

Prior to the cut, the state rates were 16th highest in the nation. South Carolina's Medicaid agency was the only one in the country that was banned from lowering the rate.

The legislative decision to lift the budget decree came in the weeks after The Post and Courier published a report describing the events that prompted the bar on Medicaid provider rate cuts in the 2008 law.

The rate cut in the current fiscal year that ends June 30 was made across the board. But in the next fiscal year, officials aim to make $125 million in cuts that will be targeted strategically, an agency spokesman said.

Keck said the Medicaid agency is working closely with providers to drive costs out of the system. One example of cost savings is the agency's work with hospitals to ensure babies are born at healthy weights. The costs to deliver and treat a low-birth-weight baby are 10 times as high as a normal-weight baby, Keck said.

Reach Yvonne Wenger at 803-926-7855, follow her at @yvonnewenger and read her Political Briefings blog.