Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Human Services and Housing, to which was referred S.B. No. 654, S.D. 2, entitled:

begs leave to report as follows:

The purpose of this bill is to set Medicaid payments at a level that fairly compensates providers by ensuring that payments are at least sufficient to cover the actual costs of care offered by providers.

The Hawaii Health Systems Corporation, Healthcare Association of Hawaii, Hawaii Long Term Care Association, Queen's Medical Center, Kapiolani Medical Center for Women and Children, North Hawaii Community Hospital, St. Francis Healthcare System of Hawaii, Kaiser Permanente, Leeward Integrated Health Services, and the Hawaii Nurses Association submitted testimony in support of this measure.

The Department of Human Services (DHS) and Department of Budget and Finance opposed this measure. DHS's primary concern with this measure is funding.

Your Committee finds that Medicaid payment rates are not sufficient to cover the actual costs of long-term care. One long-term care provider stated that providers receive as little as 37 percent of the actual cost of care. This bill seeks to remedy this situation and keep providers from closing their businesses.

Your Committee has amended this bill with the collaborative efforts of DHS and other affected organizations by:

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 S.B. No. 654, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 654, S.D. 2, H.D. 1, and be referred to the Committee on Finance.