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South Carolina Healthcare Legislative Update


Email Alert

By Elizabeth T. Thomas and Carolyn A. Campbell*

July 15, 2009

The South Carolina General Assembly adjourned the first session of its 2009-2010 year on May 21, 2009. Numerous distractions such as the economic recession, budget crisis, and local debate over federal stimulus funding limited the progress made on pending legislation. Below is a review of the final actions taken on healthcare legislation recently introduced or previously summarized in South Carolina reform updates. Legislation still pending will be carried over to next year's session.

Legislation Passed

  • Fiscal Year (FY) 2009-10 State Appropriations Bill—Enacted and Upheld—Governor Mark Sanford's (Governor) vetoes of much of the $5.7 billion appropriations bill (Budget), including stimulus funding available under the American Recovery and Reinvestment Act of 2009 and multiple healthcare provisions, were quickly overridden by the General Assembly in May. The South Carolina Supreme Court subsequently upheld the Budget's constitutionality, holding in part that "the General Assembly has the authority to mandate that the Governor apply for federal funds which it has appropriated." Edwards & Williams v. State & SCASA v. Sanford, Opinion No. 26662 (June 4, 2009).

  • Mental Health Parity and Addiction Equity Act of 2009—This Act updates state law to reflect the similar federal law passed in 2008. The law creates parity for mental health and drug abuse treatment coverage in any policy in which a large group health plan (fifty-one or more employees) covers medical and surgical benefits as well as mental health and substance abuse coverage. The large group health insurer must apply annual and aggregate lifetime limits that are no less than those for medical and surgical benefits. Also, large group policies cannot impose more restrictive financial or treatment limitations on mental health or substance abuse benefits than are imposed on medical and surgical benefits. As a result, large group health plans will not be able to require larger deductibles or co-payments or limit the number of visits, unless the same or greater restrictions apply to medical and surgical benefits.

Legislation Pending

  • Cigarette Tax—On Senate Calendar for 2010 Session—Several competing bills have been filed proposing a significant increase in the South Carolina cigarette tax, the lowest in the nation. The House bill now pending on the Senate calendar for next year would increase the cigarette tax by fifty cents per pack and apply the revenues collected to a number of uses, which include providing tax incentives to small businesses for providing health insurance premium assistance to low income families, providing tax credits to individuals with qualified health savings accounts, and funding smoking cessation treatments. The Senate is currently in favor of applying the revenue toward other uses. The Governor continues to state that he will veto the cigarette tax if it is not part of a larger tax reform plan that is revenue neutral.

  • Behavioral Health—Approved by House, referred by Senate to Medical Affairs Committee—This bill would restructure and consolidate South Carolina's Department of Mental Health and Department of Alcohol and Other Drug Abuse into the Department of Behavioral Health Sciences, with the purpose of coordinating the provision of behavioral health services.

  • Certificate of Need (CON) Improvement—In-House 3M Committee Awaiting Subcommittee Assignment—This bill proposes certain changes to the Department of Health and Environmental Control's (DHEC) CON appeals process in an effort to improve the process and provide administrative relief to the agency. Specifically, it would: (1) limit influence of federal and state elected officials from contacting DHEC regarding a CON application; (2) limit and shorten the review, decision, and appeals process for CON applications and establish limits on discovery in cases appealed to the Administrative Law Court (ALC); (3) require that a person challenging an ALC decision post bond equal to 5% of the total project cost or $100,000, whichever is greater, up to a maximum of $1.5 million; and (4) if the Appellate Court affirms the ALC decision or dismisses the case, automatically award the bond to the party whose project is subject to appeal. The bill would not require a bond to appeal the denial of a CON by DHEC if no competing application is involved.

  • Income Tax Credits—No Activity Since Introduced In-House—This bill would create tax credits for small employers that provide certain health benefit plans.

  • Hospice—Approved by House, referred by Senate to Committee on Finance—A joint resolution would require the state to restore Medicaid funds for the hospice benefit cut in 2008. The General Assembly funded the Medicaid hospice benefit. The Governor vetoed the funding, but the General Assembly overrode the veto.

  • South Carolina HealthNet Program—Referred by House to Committee on Labor, Commerce, and Industry—This bill would create a pilot program to promote availability of health insurance to employees and to promote fair practices in the small-group health insurance market.

  • Insurance—Referred by House to Committee on Labor, Commerce, and Industry—A House bill would require insurers to pay network rates to providers during the remaining benefit period of the provider's patients if the provider is terminated from the network during the patient's benefit period. The insurers would not be able to require the patient to pay higher out-of-network deductibles or co-payments during the remaining benefit period. Likewise, if the provider does not renew or terminates the agreement, or is terminated for failure to meet credentialing standards, the provider would be required to accept in-network payments and would not be permitted to balance bill the patient.

    A Senate bill would require health benefit plans to extend coverage for a six-month period to a policy holder's child who served six months of active duty in the S.C. National Guard, the U.S. armed forces, or the reserves upon honorable discharge. To be eligible the child must be unmarried, under thirty, and have no other coverage.

  • Hospital Charges—Referred by House to Committee on Labor, Commerce, and Industry—This Senate bill would prohibit a hospital from charging uninsured patients more than the amounts charged for the same services to insured patients.

  • Pharmacy—Referred by House to Committee on Labor, Commerce, and Industry—This bill would require licensure and registration of pharmacy benefit managers (PBMs) in South Carolina, including mail-order pharmacies; impose certain standards for certification; and prohibit PBMs from discriminating against pharmacies on the basis of co-payments and days of supply. PBMs would be prohibited from intervening in the delivery or transmission of prescriptions between the prescriber and the pharmacist.

Legislators also continue to debate a number of other healthcare bills including those addressing such matters as reproductive rights, the scope of practice of optometrists and podiatrists, false claims, and mandatory professional insurance coverage for nursing homes, among others.

*AHLA wishes to thank Elizabeth T. Thomas, Esquire, and Carolyn A. Campbell, Esquire (Haynsworth Sinkler Boyd PA, Charleston, SC) for providing this email alert.

For summaries of other state healthcare initiatives, please visit the Healthcare Reform Educational Task Force's website and click on Email Alerts in the left-hand navigation menu.

The Healthcare Reform Educational Task Force is a joint endeavor of the Healthcare Liability and Litigation; Hospitals and Health Systems; In-House Counsel; Payors, Plans, and Managed Care; Physician Organizations; Regulation, Accreditation, and Payment; and Teaching Hospitals and Academic Medical Centers Practice Groups.

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