SC admits paying providers for putting up with Medicaid application backlog

The South Carolina health department acknowledged to McKnight's on Tuesday that it was compensating nursing homes for excessive delays by the state in processing Medicaid applications.

“A new eligibility system has created Medicaid application processing delays, and as a result, nursing homes have incurred otherwise unreimbursable costs while providing care to applicants in the expectation that those applications would be approved,” the South Carolina Department of Health and Human Services said in a statement. “To help defray these costs, the Department has offered enrolled nursing homes a one-time payment of approximately $3 for each licensed bed-day.”

The admission comes after a provider last week sent a letter to local news site FITSnews. Administrator P. Scott Jones called a reported $12 million “hush money” and offered up his own suggestions for remedying the application delays. Jones is also president of the South Carolina Nursing Home Association, a spinoff of the state branch of the American Health Care Association.

“The problem with this is the state owes a minimum of $50 million to these homes due to the fact that it can no longer process Medicaid applications in a timely fashion and does not have an answer as to how to fix the problem,” Jones wrote. “My suggestion on how to fix the problem is simple: All applications that go beyond the 45-day period CMS gives the state and SCDHHS to process applications should be approved — period.”

Jones claims the payments to providers are for nursing home operators who agree not to take action against the state for its slow Medicaid application processing times. A draft of the proposed settlement offer between the health department and providers was posted Monday in a follow-up on FITSnews.

McKnight's requests for input on the story from the South Carolina Health Care Association were not returned by production deadline Wednesday.

Vickie Moody, president and CEO of LeadingAge South Carolina, told McKnight's that she was aware of the FITSnews story, and added that the delay in processing applications has posed significant challenges for her members.

“Medicaid applications have been running behind,” Moody said. “It's a really big issue here — they're not getting paid for the care that they're delivering.”