SC Public Radio's Maayan Schechter asks S.C. Hospital Association President and CEO Thornton Kirby about the potential impact to hospitals in the Senate and House proposals as Congress races to pass President Donald Trump's big bill by July 4.
MAAYAN SCHECHTER, HOST: The Republican-controlled U.S. Congress wants to pass President Donald Trump's big, beautiful tax and spending bill by a self-imposed July 4 deadline to pay for the bill's tax cuts.
A Senate plan would, in part, restrict Medicaid provider taxes that states like South Carolina impose on hospitals to help pay for health care services for the more than 1.1 million South Carolinians on Medicaid.
Hospitals and some Republican senators say that could devastate hospitals, especially in rural areas and the people who receive care there.
Joining me to discuss the potential impact here in South Carolina is Thornton Kirby, president and CEO of the South Carolina Hospital Association.
Thornton, thanks for chatting with me.
THORNTON KIRBY: Maayan it's a pleasure. Thanks for having me on the show.
SCHECHTER: Let's start with the bills. The House and Senate treat Medicaid differently in their respective versions of the reconciliation bill. You have publicly spoken out against the proposed Senate plan. What in your view does the Senate version do that would hurt South Carolina hospitals? Why is the House's version more acceptable?
KIRBY: We have used a legal model, authorized by the federal government, to fund hospitals through our Medicaid program here in South Carolina. It's called a provider tax-funded, state-directed payment model. This is authorized by federal law. It's approved. It's used in many states. Some of the folks in Washington have decided they don't like this funding model, and they are attacking it. They're calling it a gimmick or a money laundering scheme. When in fact, it's been in place and authorized by federal law since the 1980s, and 49 out of the 50 states use this type model to fund part of their Medicaid programs. The House version would grandfather South Carolina's program, and therefore we're comfortable with their approach. Essentially, they're saying they don't want to see any more of these created, but they're not going to go back and erase the ones that already exist. The Senate version would do a different thing, and that is, phase them out, which leaves South Carolina with a very big hole financially.
SCHECHTER: And you said that that's, that's an over $2.3 billion hole?
KIRBY: Yes, $2.3 billion, $2.4 billion, somewhere in that range. It's a large amount of money.
SCHECHTER: What does that impact look like for South Carolinians, for folks who are on the Medicaid program here in South Carolina?
KIRBY: When the president and others talk about they don't want to cut Medicaid benefits, what people need to understand is, unlike Social Security where the government actually sends you a check and you deposit it, you spend the money, in Medicare and Medicaid, the money doesn't come to the beneficiary, it goes to the provider of services. So it's an important distinction. When they say they're not going to cut benefits to individuals, they can't cut the payments to providers without indirectly hurting the individuals who won't receive services. That's what we worry about, whether small, vulnerable, rural hospitals will be able to stay in business. But if you take $2.4 billion out of the state's hospital community, you're going to see layoffs, you're going to see service reductions, and the worst case scenario, closures.
SCHECHTER: So what's the situation? Would hospitals have to go to the state and ask for more money? Of course, the state spends billions of dollars every single year on Medicaid.
KIRBY: I think that the hospitals would go to the state and say, 'We need help.' After the COVID pandemic, the whole cost structure of hospitals in this country changed because of the increased labor costs. So many hospitals would not be able to survive the way they are without financial help. And that's why I have been concerned that since Congress and this bill is apparently going to protect all the 40 expansion states, the 10 that didn't expand, including South Carolina, are going to have a hard time not going down that road.
SCHECHTER: What has been the response of the state's federal delegation to the concerns that you've brought them?
KIRBY: Well, we've had two well-placed members of our delegation. Russell Fry, who is a House member and is on the House Energy and Commerce Committee. He was very sympathetic and concerned about the impact on hospitals, and he also had the viewpoint that we don't want to paint states into a corner that haven't chosen to expand. In other words, if you take away the only viable funding mechanism apart from expansion, you leave only Medicaid expansion, and that's not where a lot of the Republicans want to go. Sen. Tim Scott, on the Senate side, is on the Finance Committee, and he has the same view, and we appreciate that. We don't want to foreclose other avenues in South Carolina when our elected officials have wanted to avoid Medicaid expansion. But taking away this option would leave only Medicaid expansion, and those two have been really champions for our argument.
SCHECHTER: We'll be watching those developments as they turn. Thornton Kirby, president and CEO of the South Carolina Hospital Association. Thank you so much for joining me.
KIRBY: It's a pleasure.
