STAND. COM. REP. NO. 575________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1125
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Judiciary and Hawaiian Affairs, to which
was referred H.B. No. 1125 entitled: 

     "A BILL FOR AN ACT RELATING TO RECOVERY OF MEDICAL
     PAYMENTS,"

begs leave to report as follows:

     The purpose of this bill is to clarify and standardize
provisions relating to the recovery of medical assistance
payments by the State Department of Human Services in third-party
liability situations.

     Testimony in support of this bill was received from the
State Department of Human Services.  Testimony in opposition to
this bill was received from the Consumer Lawyers of Hawaii.

     Your Committee finds that the State Department of Human
Services annually recovers approximately $1,000,000 in
reimbursements for medical assistance from third parties
responsible for injuries suffered by medical assistance
recipients.  Such reimbursements help fund the medical assistance
program.

     Your Committee finds that there has been a steady increase
in the number of pending third party liability cases, making
direct State intervention or involvement impractical.  Your
Committee finds that this measure alleviates potential burdens
upon the Department of Human Services and the taxpayers of the

 
 
 
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                                 Page 2

 
State, and fairly distributes the responsibility for attorney
fees and costs incurred in the recovery of reimbursable funds.

     Your Committee has amended this bill as follows:

     (1)  By adding language that clarifies that where a lien
          attaches as provided by Section 346-37(g), Hawaii
          Revised Statutes, and the attorney representing a
          claimant is properly served with notice of the lien,
          the attorney shall pay the full amount of the lien,
          less a pro-rata share of attorneys fees and expenses
          incurred in the recovery of the lien, prior to
          disbursing any of the proceeds of the suit or
          settlement to the attorney's client;

     (2)  By adding language clarifying that the department's
          right of reimbursement is limited; and

     (3)  Making technical, nonsubstantive amendments for
          purposes of clarity and style. 

     As affirmed by the record of votes of the members of your
Committee on Judiciary and Hawaiian Affairs that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 1125, as amended herein, and recommends that
it be referred to the Committee on Finance, in the form attached
hereto as H.B. No. 1125, H.D. 1.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Judiciary &
                                   Hawaiian Affairs,



                                   ______________________________
                                   PAUL T. OSHIRO, Chair