STAND

STAND. COM. REP. 984

Honolulu, Hawaii

, 2003

RE: S.B. No. 1240

S.D. 2

H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Human Services and Housing, to which was referred S.B. No. 1240, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO MEDICAID,"

begs leave to report as follows:

The purpose of this bill is to fairly compensate Medicaid health care providers and maintain access to essential health services for all Hawaii residents by requiring the Department of Human Services (DHS) to:

(1) Withdraw its proposed amendments to the State Medicaid Plan that would:

(a) Pay only one-half of the Data Resource Index (DRI) McGraw-Hill inflation adjustment;

(b) Discontinue the return on equity (ROE) program; and

Withdrawing these amendments would prevent Medicaid payments to hospitals and nursing homes that provide care to the aged, blind, and disabled from falling further below levels that already are so low that they do not cover the actual costs of care provided;

(2) Set Medicaid payments to health care providers at a level that would at least cover the actual costs of health care provided; and

(3) Propose annual inflationary adjustments to the per capita payments, based on a factor that is generally accepted nationally.

Finally, this bill appropriates or authorizes funds for one-half of the DRI inflation factor and the ROE factor components of health care payments for aged, blind, and disabled Medicaid recipients.

The Hawaii Medical Service Association, Hawaii Pacific Health, Healthcare Association of Hawaii, Hawaii Long Term Care Association, and Drug Addiction Services of Hawaii, Inc., testified in support of this bill. The Department of Budget and Finance and DHS opposed this measure.

Your Committee has amended this bill by:

(1) Inserting appropriations of $1 for the purpose of continued discussion; and

(2) Making technical, nonsubstantive amendments for purposes of style and clarity.

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. 1240, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1240, S.D. 2, 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,

		____________________________ MICHAEL PUAMAMO KAHIKINA, Chair