STAND. COM. REP. NO. 3355

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2534
                                        H.D. 2
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 2534, H.D. 2, entitled: 

     "A BILL FOR AN ACT RELATING TO CRITICAL ACCESS HOSPITALS,"

begs leave to report as follows:

     The purpose of this bill is to enhance the federal medicare
rural hospital flexibility program by reimbursing critical access
hospitals on a cost basis under the medicaid program, using
matching federal funds.

     Your Committee finds that rural hospitals have been
particularly hard hit by reimbursement trends due to their lower
volume and high expense for caring for patients in rural areas.
The federal government has sought to alleviate this situation by
establishing a medicaid rural hospital flexibility program.  This
program designates critical access hospitals as limited service
hospitals eligible for medicaid certification and reimbursement.

     Hawaii will only receive this reimbursement if the federal
government approves Hawaii's rural health plan, the medicaid
payment methodology, and other modifications to the state
medicaid plan.  This bill makes those required changes.


 
a                                                     HB2534 SD1
 
 
 
 
                                   STAND. COM. REP. NO. 3355
                                   Page 2


     Your Committee has amended this bill by making
appropriations for the Department of Human Services'
Interdepartmental Transfer and Federal Fund ceilings to
accommodate the transfer of state matching funds.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
2534, H.D. 2, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as H.B. No. 2534, H.D.
2, S.D. 1.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
a                                                     HB2534 SD1