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Medicaid
Major overhaul
aims to cut costs
By WALT SMITH
ATLANTA (UPI) — The state
Medicaid program, which has
been criticized recently because
of alleged abuses, is to get a
major overhaul with emphasis
on tightening regulations to cut
down on soaring costs.
State Medicaid Director Sam
Thurmond outlined a series of
proposals Tuesday to a legisla
tive committee which he said
would eliminate abuses by both
recipients and health care
professionals.
Gov. George Busbee recently
suspended the dental and
Dptometry portions of the
program because of alleged
fraud in the form of massive
overpayments and payment for
work which was not performed.
Thurmond said 668,673 Geor
gians are certified eligible for
dedicaid and about 70 per cent
>f that number utilize the
orogram. He said expenditures
over the past six months have
iveraged $22.2 million a month
or the 23 different types of
covered services.
“The taxpayers in the state
ire not going to continue
laying the rising cost of all
hese welfare programs,” said
len. Paul Broun, D-Athens, who
aid the program had been
screwed up” since its incep
ion.
Poverty sets back New South
Bv NEA-London Economist News Service
RALEIGH - (LENS) -
Forty years after Franklin
Roosevelt offended southern
pride by calling the South the
country’s number one economic
problem, it is in distress again.
The present recession is under
mining some of the progress
made in the years between.
During the 19605, indeed, the
South's economy grew more
rapidly than that of any other
region and for two decades it
suffered no real recession.
The South s integration into
the national economy began
with World War 11, when many
big military camps were in
stalled in the southern states.
Thereafter, year by year, in
dustrialization, taking advan
tage of the labor released from
an increasingly mechanized and
diversified agriculture, provid
ed new kinds of employment
and higher levels of income.
Not only white families but
also many black ones, lived
well; the gap between southern
incomes and those in the rest of
the country narrowed. Between
1959 and 1968 there were major
reductions in the numbers of
families living in poverty, ex
cept among families dependent
on the earnings of black
women.
But beginning in December,
1973, unemployment in most of
the 11 southern states, from
Virginia to Texas, climbed
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The Joint Senate-House Medi
caid Overview subcommittee
approved Thurmond’s plans to
tighten controls on the pro
gram. Thurmond said some of
his recommendations would go
into effect immediately while
others would require further
study.
Thurmond said he would
implement, effective July 1,
regulations calling for a mini
mal payment by recipients for
optional non-institutional ser
vices such as prescription
drugs, dental services, eye
glasses, intermediate nursing
care and ambulance service.
He said recipients would be
charged 50 cents for a
prescription drug costing the
state less than $lO. If the state
payment is between sll-$25, the
cost to the recipient would be
sl.
The recipient’s payment for
intermediate nursing home care
would be limited to 50 per cent
of the state’s payment for the
first day of care, or $8 if the
charge was sl6 a day.
Thurmond also said he would
apply for a waiver from the
federal government which
would allow a minimum charge
to the recipient for mandatory
services such as hospital
services and skilled nursing
care facilities.
steeply. No southern state
equalled Michigan’s fall into
double-digit distress, with a
rate of unemployment that rose
from 5.4 to 11.1 per cent of its
labor force, but North
Carolina’s rise from 3.2 to 8.1
per cent was sharper.
By January, 1975, there were
263,000 North Carolinians
without work, compared with
only 103,000 a year earlier.
The impact of layoffs has
been most severe in goods
producing occupations. The
collapsing construction boom
has idled workers from lumber
camps to furniture factories
(furniture sales reflect the
building of new houses).
Non-durable goods, which es
caped in previous recessions,
have been hit hard. Unsold
stocks of textiles and clothing
— the traditional products of
the mill-towns of the southern
Piedmont — have discouraged
the placing of new orders by
businessmen. And textiles ac
count for almost a quarter of
the South’s output of manufac
tures.
The relative immunity of ser
vice industries is likely to be
brief; when chain saws and mill
spindles are silent, so are the
motors of big interstate lorries
and even the coffee machines of
quick-lunch places along
southern Main Streets.
What makes the South
vulnerable to recession is the
poverty which persists even in
boom times. A study issued by
the Southern Council and based
on the 1970 census points out
that only a quarter of the
American population lives in
the South, but this includes 38
per cent of the country’s poor,
10 million of the 27 million
families and individuals whose
income fall below nationally
determined poverty levels.
In 1969 four per cent of all
white families in the Southeast
and 17 per cent of all the black
families existed on incomes
that were less than half the
poverty level. A drop in
economic activity not only
pushes these people deeper into
poverty, but also pushes back
into poverty many of the near
The new regulations also
would limit total hospital days
per recipient per year unless
prior authorization was given to
exceed the limit, which has yet
to be established.
The committee also approved
creation of an advisory council
of medical professionals which
will assist in developing stand
ards for the level of treatment
of Medicaid patients.
Thurmond said a study would
be made to consider the
elimination of certain optional
services under the Medicaid
program. He also recommend
ed full cost audits for nursing
homes, but said it would cost
the state perhaps $1.5 million.
“There are so many allega
tions in the nursing home
industry,” he said. “Once and
for all, this would let us know
where we are. I’m sure we’ve
got some homes we would
drum out of business.”
Other possible actions which
will be studied include prohibit
ing Medicaid patients from
being assigned private hospital
rooms, eliminating elective
surgery without prior authoriza
tion, limiting the number of
outpatient hospital visits with
out prior authorization and
limiting the number of visits to
a physician without diagnosis of
a serious illness.
poor whose earnings in recent
years have lifted them out of it.
The kind of agricultural
poverty that was prevalent dur
ing the New Deal persists in
places such as Appalachia,
along the lower Mississippi and
along the Rio Grande, where
there is a large Mexican-
American population.
Elsewhere wages tend to be
low because the South’s
economy is based on low-wage
industries. Only 15 per cent of
the non-agricultural wage force
belongs to trade unions, com
pared with 28 per cent in the
country as a whole.
Many of the jobs available to
female heads of families — and
contrary to general belief about
a third of the white and two
thirds of the black women with
small children are working, the
blacks mostly in private
households — do not pay enough
to support a single person, let
alone a family.
Yet in 1970 only about six per
cent of southern families
received public assistance. The
federal government supplies
the bulk of the money, but it is
distributed under state
definitions of poverty which in
the South are lower than the
federal poverty line; most
southern states pay less than
even their own standards of
need require in theory,
(cl The Economist of London
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Page 13
Gr Iff in Dally News Wednesday, April 30, 1975