Doctors may no longer receive Medicaid payments after March (AUDIO)

Officials at a state agency say they will not be able to pay doctors to treat Medicaid patients after next March, unless the state covers a deficit of more than $200 million.

The South Carolina Department of Health and Human Services says it will be short $228 million next year. In a report to the State Budget Office, the agency is asking for permission to run a deficit. Spokesman Jeff Stensland says this is largely due to more people receiving benefits.

Since the recession started, we’ve added over 100,000 people to the Medicaid rolls. Federal law restricts us from changing our eligibility rules, so there’s nothing we can do to slow down the number of people coming onto Medicaid.

The report says if the agency’s deficit isn’t covered, it will not be able to pay doctors to treat Medicaid patients. Agency spokesman Jeff Stensland says a major problem is state law.

The state legislature has said South Carolina Medicaid is not allowed to pay providers any less they pay them now. We’re the only state in the country with that restriction. At least 40 states have already reduced provider rates in order to make up for the budget deficits that they’re experiencing. We have not had that flexibility.

The report says a 10 percent decrease would cut the agency’s deficit almost in half.

Stensland said even if the legislature changes the law next year, it wouldn’t take effect by March, since the federal government would also have to approve. He says if the legislature doesn’t fix the law, he doesn’t know if a state Medicaid budget can be maintained at all in 2012.

AUDIO: Stensland explains restrictions (0:58)

The report says the new federal healthcare expansion doesn’t help, since it does not allow states to make tougher eligibility requirements. Stensland says if the Budget and Control Board turns down the agency’s request, they will have no way to pay Medicaid expenses.

We would not have the ability to pay claims at a certain point. There are some reductions of optional services that can be made, but the vast majority of those would require legislative approval. We can’t make changes that would run contrary to state law.

The Budget and Control Board will review the request in its December meeting.

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