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 S.B. No. 1111, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to allow the Department of Human Services to change its current method of reimbursement to noninstitutional providers of medical care from the customary methodology based on the charges of providers in a specialty to rates established by a fee schedule.

Your Committee finds that the current method of developing and maintaining reimbursement rates for noninstitutional providers is cumbersome and difficult to manage. Rates are based on percentages of customary provider charges, according to the specialties of their practices. Provider reimbursement for services in this manner is not equitable. A conversion to a fee schedule method, as proposed by this measure, will maintain reimbursement according to services provided instead of provider charges by specialty, greatly simplify the processing of claims, and result in more timely and accurate payments to providers.

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 S.B. No. 1111, S.D. 1, and recommends that it pass Third Reading.