South Carolina now limits Medicaid patients to 12 days in the hospital each year. Missouri will not pay for more than two doctor visits a month. Illinois no longer pays for the tranquilizer Valium or the pain-killer Darvon. And California's new "health czar" has cut off Medicaid payments to 121 hospitals that refuse to give the state substantial discounts.
Many state officials meeting here at the National Governors' Association have moved far more aggressively than have their counterparts in Washington to curb the soaring cost of the federal-state Medicaid program for the poor.
"The increases in Medicaid have been staggering," said New Jersey Gov. Thomas H. Kean, who is pushing a resolution at the conference that calls on the Reagan administration to give states more flexibility in setting rules for Medicaid, for which they pay about half the bill.
According to George Washington University's Intergovernmental Health Policy Project, 30 states took some action last year to reduce health benefits, limit eligibility or cut payments to providers.
* Eleven states limited the number of days patients can remain in the hospital each year.
* Fourteen states required patients to pay part of the cost of optional services, such as prescription drugs, or increased such charges.
* Thirteen states reduced the amount, scope or duration of medical services.
* Ten states moved to cut back use of emergency rooms and outpatient clinics by denying or limiting payments.
* Eight states tightened their eligibility rules, and six of them dropped patients aged 18 to 21 from the rolls.
* Sixteen states cut payments to doctors or nursing homes.
* Nineteen states cut payments to hospitals, and 13 began setting advance ceilings on how much they will reimburse hospitals for the following year.
Kean's two-year experiment with paying New Jersey hospitals a fixed amount for each of 467 illnesses or procedures has been so successful that Congress recently adopted it for Medicare. He said the plan helped hold medical costs in New Jersey to about three-quarters of the national increase in 1981.
Under the plan, the state gives hospitals fixed Medicaid payments and requires the facilities to absorb any additional costs.
"Under the old system, the longer the person stayed in the hospital the better off the hospital was," Kean said. "This is the reverse. The incentive now is not to keep the person in the hospital . . . . It's saved our urban hospitals."
Kean also is opposing an administration effort to eliminate federally funded health planning agencies that regulate construction and expansionof medical facilities.
"Every hospital wants to have the latest advanced equipment in every single area," he said. "You have hospitals in neighboring towns building elaborate facilities to treat a relatively esoteric malady."
At least 32 states, including New Jersey, have sought federal "waivers" to allow Medicaid payments for home health care as a cheaper alternative to placing the elderly in nursing homes. In addition, 14 states have asked to waive Medicaid's "freedom-of-choice" provision so they can restrict poor patients to certain hospitals and doctors.
California has led the way by contracting with 244 hospitals that submitted the lowest bids and promised the cheapest rates for Medicaid patients in their areas. The state no longer makes Medicaid payments to other hospitals, except for emergency treatment.
"We tried to buy as much service as we needed as economically as we could," said James Foley, California's new health czar. He said the exclusive contracts will cut the state's $1.3 billion hospital bill by $238 million.
"There's always concern about whether we are creating a two-tiered system . . . and disrupting patients who used the hospitals that are no longer in the program," Foley said. But he said the state hopes to extend this approach to doctors and prepaid health plans.
In New York, Gov. Mario M. Cuomo has slapped a year-long moratorium on $5 billion in planned hospital construction, and the state plans to issue permits more selectively after the ban is lifted.
Cuomo also has pushed a pilot project to restrict care for 27,000 Medicaid recipients in East Harlem to designated hospitals and doctors. But black leaders have criticized the plan as a form of second-class treatment.
Cuomo aides respond that the poor already are deprived of freedom of choice because Medicaid fees are so low--$7 for an office visit--that 73 percent of the state's physicians now refuse to accept payments from the program.
States have played a leading role in medical cost containment for a long time. Maryland and New York, for example, have commissions that strictly regulate hospital charges.
And many federal programs--peer review by doctors, computerized management and certificates of approval for new facilities--began in state capitals.
While 13 states added new Medicaid services last year, most were looking for ways to cut back. Illinois has restricted emergency room payments to cases involving severe pain or life-threatening conditions. Iowa now requires patients to contribute $2 every time they call an ambulance. And Kentucky wants to cut back health benefits for 90,000 state employes and to require second opinions before surgery is performed.