Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Health and Human Services, to which was referred S.B. No. 1358 entitled:

beg leave to report as follows:

The purpose of this measure is to appropriate an additional $2,179,400 necessary to meet the federal Health Insurance Portability and Accountability Act (HIPAA) for the Department of Health.

Testimony in support of this measure was submitted by the Department of Health and the Hawaii Early Intervention Coordinating Council.

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 Committees find 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. However, the Department of Health has determined that a reduced appropriation will be sufficient to meet their immediate needs.

Accordingly, your Committees have amended this measure by reducing the appropriation amount from $2,179,400 to $1,292,439 for compliance with HIPAA.

As affirmed by the records of votes of the members of your Committees on Health and Human Services that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1358, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1358, S.D. 1, and be referred to the Committee on Ways and Means.