Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 1234, H.D. 1, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to appropriate funds to provide enabling services under QUEST.

Specifically, the bill requires the QUEST Medicaid agency to calculate and withhold from health plan capitation payments all dollars budgeted for perinatal services including obstetric and other delivery costs, and pool and distribute the funds retrospectively on a case rate basis when there is a documented pregnancy within the health plan's population. This carve out is to be effective on July 1, 2001.

The bill further requires QUEST to request state health plans to provide claims paid data on substance abuse and related behavioral health encounter information for the purpose of assessing the feasibility of a substance abuse carve out beginning July 1, 2002.

The bill also requires the Department of Human Services to define enabling services to be provided by QUEST and mandates various components of enabling services. The bill further requires the Department of Human Services to submit for federal review any changes in the state Medicaid plan.

Finally, the bill appropriates $1 for fiscal year 2001-2002 to provide enabling services under QUEST. The bill takes effect on July 1, 2003.

Your Committee received testimony in opposition to this measure from the Department of Human Services, the Hawaii Medical Service Association, and Kaiser Permanente.

Upon further consideration, your Committee has amended this bill by:

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. 1234, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1234, H.D. 1, S.D. 2.