Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2608, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to make permanent the payment methodology to critical access hospitals using medicare reasonable cost principles.

In addition, this bill also makes permanent the definition of critical access hospital and exempts these hospitals from medicaid reimbursement equity. To accomplish this, this bill amends Act 226, Session Laws of Hawaii 2000, by repealing that Act's sunset date of June 30, 2004.

Your Committee finds that rural areas typically face financial conditions that are more severe than those in urban settings due to the low volume of patients and the high expense of providing care in remote areas. The designation of a hospital as a critical care hospital increases medicare payments and relaxes operating requirements to help ensure the fiscal viability of participating hospitals. Your Committee finds that this bill assists the State's critical care hospitals by making permanent the payment methodology to critical access hospitals using medicare reasonable cost principles.

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. 2608, S.D. 1, and recommends that it pass Third Reading.