SC's move to managed care for HCBS waivers: What providers need to know

Effective January 1, 2026, the South Carolina Department of Health and Human Services (SCDHHS) began enrolling certain Healthy Connections Medicaid members into managed care organizations (MCOs) — including adults who are dually eligible for Medicare and Medicaid, adults enrolled in the Community Choices, HIV/AIDS, or Mechanical Ventilator Dependent waivers, and nursing facility residents. A 180-day continuity-of-care period requires MCOs to honor existing authorizations. This is a meaningful shift for a state that has historically administered HCBS waivers almost entirely through fee-for-service.

What actually moved to managed care — and what didn't

The detail behind each row:

This is a carve-in of medical services, not waiver services. For members affected by the change, physician visits, hospital care, and other Medicaid state plan medical services are now authorized and paid through the member's assigned MCO. Waiver services themselves continue to be authorized and paid through the fee-for-service delivery model. That distinction matters enormously for provider billing: claims for medical services now go to the MCO, while claims for waiver-specific services (personal care, respite, habilitation, and similar) continue through the existing FFS process.

Nursing facility services are not carved into managed care and remain fee-for-service, and as of January 2026 nursing facilities no longer need to bill MCOs for the first 90 days of Medicaid skilled nursing facility services. However, nursing facility residents are among the groups enrolled in an MCO for medical services, so the MCO covers hospital and other medical claims for them. Hospice services for enrolled members also continue through fee-for-service while the member remains in the waiver or MCO.

The waivers operated by the SC Department of Behavioral Health and Developmental Disabilities' Office of Intellectual and Developmental Disabilities (BHDD OIDD) — Intellectual Disability/Related Disabilities (ID/RD), Community Supports (CS), and Head and Spinal Cord Injury (HASCI) — were not part of this initial medical-services carve-in, but providers serving members across multiple waiver types should expect this landscape to keep evolving and should not assume today's dividing line is permanent.

What this means operationally

1. Billing systems need to route correctly. Staff submitting claims need clear guidance on which claims go to the MCO and which stay in the FFS pipeline — this is the single most common point of confusion during a carve-in transition, and claim rejections spike when billing staff default to old habits.
2. Continuity of care matters during the transition window. SCDHHS has published continuity-of-care guidance for the carve-in — review it directly rather than relying on secondhand summaries, since specifics affect prior authorizations already in place.
3. Case managers need current MCO contact information. Community Long Term Care (CLTC) case managers and provider billing staff should have current prior-authorization and credentialing contacts for each MCO operating in South Carolina, since these differ by plan.

The bigger trend

South Carolina has moved more slowly toward managed care for long-term services and supports than many states — this carve-in represents incremental movement in that direction, not a wholesale shift. Providers should watch for further waiver amendments and renewals (CMS approved the five-year renewals of the Community Choices and HIV/AIDS waivers, retroactive to July 1, 2026, per SCDHHS Medicaid Bulletin MB# 26-029) as signals of where this trend is heading next.

This is general information, not legal or billing guidance specific to your organization — verify current requirements directly against SCDHHS's published carve-in FAQ and provider manual before changing internal processes.