Remaining DHHS FY2011 Deficit Recognized

Last Tuesday, the Department of Health and Human Services appeared before the State Budget and Control Board to address the Agency’s projected deficit. Both Senator Leatherman and Governor Haley asked HHS Director Tony Keck if the Agency was going to end the current fiscal year in the “black or the red”. Mr. Keck responded that if the Board recognized an additional shortfall of not to exceed $22.5 million, then the Agency would be in the black. Without approval of the deficit, $22.5 million in reimbursement payments to hospitals, physicians and other healthcare providers for Medicaid services would have been eliminated.
The Agency is currently working off of the original projected shortfall of $227.8 million. Previously, the Board had recognized $200 million of the deficit with a directive to the Agency to find ways to cover the balance. The Agency reported last Tuesday that “a package of service reductions and eliminations . . . are projected to reduce expenditures . . . by $2,775,432.” In addition, “the Department is implementing a reduction in Managed Care administrative allowance estimated to save $1,558,680.” Various human resource strategies are expected to result in $1,000,000 of savings. These reductions or savings sum to about $5.3 million which leaves the projected unrecognized shortfall of $22.5 million. The Agency has not factored in the effect of the provider rate reductions because they are awaiting final CMS approval. If federal approval occurs before the books are closed, then the shortfall will be less. The Budget and Control Board approved the increase in the recognized deficit from $200 million to not to exceed $222.5 million. Mr. Keck told the Board there would not be a deficit for the budget year beginning July 1.
The Board also unanimously approved the sale of the Bull Street Mental Hospital campus in Columbia.

06-21-2011 09:25 (EDT)