Gives tax credit for dentists serving 25 plus Medicaid patients for up to 10% of total costs. Increases reimbursement up to 75% of usual, customary, and reasonable fees for Medicaid patients and appropriates $      to DHS. Requires DHS to standardize forms and report to governor and legislature by 9/1/2001.

A BILL FOR AN ACT

SECTION 1. The legislature finds that Hawaii dentists, like their counterparts on the mainland, provide dental services to Medicaid eligible patients. However, just less than thirty per cent of dental practices surveyed by the Hawaii Dental Association recently reported treating Medicaid patients. Of those that do provide such treatment, only seventy per cent file reimbursement claims. Government expenditures in the State for dental care under Medicaid are out of line with the private sector. About 5.3 per cent of the national health care dollar is spent on dentistry. Medicaid dental expenditures, however, account for only 0.8 per cent of the total Medicaid budget nationally.

The purpose of this Act is to increase reimbursements to dentists who provide services to Medicaid patients and to provide other relief, including a tax credit for dentists who treat Medicaid patients.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235-    Medicaid patient dental services tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, and who is a dentist licensed to practice pursuant to section 448-2, an income tax credit which shall be applied against the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. In the case of a partnership or S corporation, the tax credit allowable is for costs incurred by the entity for the taxable year. The cost upon which the tax credit is computed shall be determined at the entity level. Distribution and share of credit shall be determined by rule.

(c) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year. For the purpose of this section, "net income tax liability" means net income tax liability reduced by all other credits allowed under this chapter.

(d) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credits over liability shall be refunded to the taxpayer; provided that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1. All claims, including any amended claims, for tax credits under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(e) The director of taxation shall prepare forms as may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91."

SECTION 3. Dental services for Medicaid patients; reimbursement; standardized forms. (a) Beginning on July 1, 2001, the department of human services shall reimburse each dentist licensed under chapter 448, Hawaii Revised Statutes, up to seventy-five per cent of the usual, customary, and reasonable fees charged for dental services provided to Medicaid patients.

(b) In order to reduce paperwork and increase efficiency, the department of human services shall examine the possibility and practicality of standardizing all state reimbursement claim forms for Medicaid patients to conform to the forms used by the American Dental Association. The department shall report to the Governor and to the legislature no later than September 1, 2001 regarding its actions on standardizing claim forms required by this subsection.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $        , or so much thereof as may be necessary for fiscal year 2001-2002, and the same sum, or so much thereof as may be necessary for fiscal year 2002-2003, to fund the reimbursement increase for dental services provided to Medicaid patients required under section 3(a). The sums appropriated shall be expended by the department of human services.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval, except that section 4 making an appropriation shall take effect on July 1, 2001.