STAND. COM. REP. NO. 881

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1125
                                     H.D. 2




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

Sir:

     Your Committee on Finance, to which was referred H.B. No.
1125, H.D. 1, 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 Department of Human Services (DHS) in third-party
liability situations.

     DHS testified in support of this measure.  The Department of
the Attorney General and Consumer Lawyers of Hawaii submitted
comments on this measure.

     Your Committee has amended this measure by:

     (1)  Removing the distinction between general and special
          damages;

     (2)  Clarifying that a DHS lien is a first lien;

     (3)  Clarifying that DHS is only required to contribute to
          attorney fees and costs if DHS fails to intervene, join
          the action, prosecute its own claims, or actively
          participate with the claimant or claimant's attorney in
          the prosecution of any claim;


 
 
                                 STAND. COM. REP. NO. 881
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     (4)  Clarifying that no reward should be given to claimant's
          attorneys if the attorneys fail to give timely written
          notice of any claim or action to DHS;

     (5)  Clarifying that if a contribution is required, DHS
          should only be responsible, for a reasonable
          contribution for attorneys' fees and expenses, which
          would be based solely upon legitimate costs;

     (6)  Allowing DHS to enter into any agreement with the
          claimant, the claimant's attorney or representative, or
          other party for the distribution of proceeds from a
          suit or settlement; and

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

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
1125, H.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as H.B. No. 1125, H.D.
2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Finance,



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair