STAND. COM. REP. NO. 124

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 545
                                     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 Human Services and Housing, to which was
referred H.B. No. 545 entitled: 

     "A BILL FOR AN ACT MAKING AN APPROPRIATION FOR A
     DEMONSTRATION PROJECT FOR LONG-TERM CARE,"

begs leave to report as follows:

     The purpose of this bill is to provide a continuum of long-
term care services by appropriating funds to continue the design
and implementation of a managed long-term care demonstration
project.

     The Hawaii Long-Term Care Association, AlohaCare, the
Waimanalo Health Center, and two individuals submitted testimony
in support of this measure.  The Department of Human Services
(DHS) submitted testimony in support of the intent of this
measure.

     In Act 116, Session Laws of Hawaii, 1998, the Legislature
appropriated $40,000 to DHS to develop a Medicaid Long-Term Care
Demonstration Project that:

     (1)  Included the preparation of a waiver application to
          start up the demonstration project;

     (2)  Included a demonstration managed care program centering
          on home- and community-based services; and


 
 
 
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     (3)  Integrated preventive, primary, acute care, and long-
          term care services under a capitated structure with a
          strong emphasis on home- and community-based services.

     Your Committee is concerned that this original proposal is
too narrow in scope and will, therefore, be pursuing a provision
to provide more flexibility for DHS to encumber and expand
current funds.

     Your Committee suggests that DHS set up a time frame to
establish the demonstration project, and recommends that a
Request for Proposal to hire a consultant for the planning stage
be issued immediately.  Further the consultant's work should be
completed by July 1, 1999.  Furthermore, your Committee suggests
that the actuarial work be completed by December 31, 1999, and a
contract be awarded by July 1, 2000.

     Your Committee has amended this measure by:

     (1)  Specifying that the funds will be used to develop a
          planning document for the design and implementation of
          a Medicaid Managed Long-term Care Demonstration Project
          instead of Phase III of the QUEST program;

     (2)  Providing that funding be matched on a dollar-for-
          dollar basis by the federal government; 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 Human Services and Housing that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 545, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 545, H.D.
1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Human Services
                                   and Housing,



                                   ______________________________
                                   DENNIS A. ARAKAKI, Chair