The planned reductions would shave $7.5 million from the agency's projected shortfall, without further cutting services to disabled and poor residents, according to the state Department of Health and Human Services.
The agency has estimated a $225 million deficit for the budget year that ends June 30, but the state's financial oversight board approved a $100 million bailout last month.
The agency has announced cuts of $3 million in services.
The 3 percent reduction to most of the agency's nearly 34,000 Medicaid providers -- who serve more than 952,000 South Carolinians -- would continue through June 30. Managed care groups would also see a 3 percent cut in the monthly fee Medicaid pays them per patient, and a 12.5 percent cut in their administration fees.
"We wanted to come up with a reasonable figure that providers would be able to adapt to," agency spokesman Jeff Stensland said of the 3 percent.
Federal regulations require the agency to exclude some providers, such as hospices, rural health centers and those serving the Catawba Indian Nation.
Changes to provider rates require a 30-day notice. The plans depend on legislators passing a bill in the meantime giving the agency the ability to set rates immediately this fiscal year. The Senate approved the measure last Tuesday and sent it to the House.
The bill is on the agenda of a House Ways and Means subcommittee meeting Tuesday, and should be in full committee Wednesday, said Rep. Dan Cooper, R-Piedmont, the chairman of the budget-writing committee. That sets it up for passage by the GOP-controlled House the following week.