Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1358, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to make an emergency appropriation of an additional $1,292,439 necessary to meet the federal Health Insurance Portability and Accountability Act (HIPAA) compliance costs for the Department of Health.

HIPAA is an unfunded federal mandate to improve portability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud, and abuse in health insurance and health care delivery, to promote the use of medical savings accounts, to improve access to long-term care services and coverage, to simplify the administration of health insurance, and to protect the confidentiality of individually identifiable health information.

Your Committee finds that the Department of Health requires immediate funding to comply with HIPAA standards within the federal deadlines in order to avoid the imposition of substantial fines that will impede the Department of Health's ability to receive federal reimbursement for the provision of direct services.

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. 1358, S.D. 1, and recommends that it pass Third Reading.