Provides for reimbursement to federally qualified health centers. Appropriates funds to DOH for direct medical services for uninsured. Removes cap on QUEST enrollment. Appropriates funds to accommodate QUEST coverage.

A BILL FOR AN ACT

SECTION 1. The legislature finds that approximately ten per cent of the population of the State of Hawaii has no public or private health insurance. The legislature further finds that, according to the Kaiser Commission on Medicaid and the Uninsured:

The significant number of uninsured residents has a considerable economic impact on the State's hospitals, community health centers, and other participants in the health care industry, threatening their ability to effectively serve the whole community.

It is in the best interests of the State to ensure access to primary and preventive health care for its residents. In addition to giving rise to a healthier population, providing access to care reduces state expenditures attributable to hospital and emergency room services for preventable injuries or illnesses.

The legislature further finds that the most effective means to encourage access to primary health care for residents without health insurance is through Hawaii's system of federally qualified health centers, which:

The legislature further finds that, while federally qualified health centers are the best system of community-based primary care for uninsured people, financial support for community health centers is inadequate to meet increasing demands.

The purpose of this Act is to provide cost-effective care for Hawaii residents who are uninsured while at the same time ensuring that the community health center system remains financially viable and stable in the face of a growing population of uninsured.

SECTION 2. Chapter 346, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§346-    Federally qualified health centers; rural health clinic; reimbursement. (a) Notwithstanding any law or waiver to the contrary, federally qualified health centers and rural health clinics, as defined in section 1905(1) of the Social Security Act (42 U.S.C. 1396 et seq.), shall be reimbursed in accordance with section 1902(bb) of the Social Security Act, as that section was originally added in 2000 by section 702(b) of Public Law No. 106-554 and as amended in 2001 by section 2(b)(1) of Public Law 107-121, and services of federally qualified health centers and rural health clinics shall remain mandatory services as provided in sections 1902(a)(10)(A) and 1905(a)(2)(B) and (C) of the Social Security Act.

(b) Reimbursement rates paid to federally qualified health centers may be adjusted if costs exceed         per cent for changes related to the intensity, duration, or amount of service provided, facilities utilized, regulatory requirements, or other extraordinary circumstances; provided that the federally qualified health center shall submit to the department an adjusted cost report covering a period of the previous two years. The director shall review the filing within a period of sixty days. The period may be extended by the director for an additional period not to exceed thirty days upon written notice to the filer. A filing shall be deemed to be approved unless disapproved by the director within the initial filing period or any extension thereof."

SECTION 3. The department of health shall provide resources to nonprofit, community-based health-care providers for direct medical care for the uninsured, including primary medical, dental, behavioral health care, and ancillary and pharmacy services. Distribution of funds may be on a "per visit" basis, taking into consideration need on all islands.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $      , or so much thereof as may be necessary for fiscal year 2006-2007, for direct medical care to the uninsured.

The sum appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 5. The legislature finds that it is critical to achieve universal health coverage for Hawaii's residents. Hawaii's QUEST program goes a long way toward this goal. However, the program cannot handle all eligible uninsured adults, and a cap has been placed on participation in the QUEST program, thus leaving out tens of thousands of eligible uninsured adults.

The current cap prevents many adults, especially non-pregnant women, who are income- and asset-eligible from enrolling in the program. These excluded but eligible adults are at high risk for not getting necessary primary and preventive care, not getting necessary prescription drugs, and are more likely to incur or generate unnecessary emergency room costs because of their uninsured status. Uninsured adults are a financial burden on hospitals, emergency rooms, community health care centers, and others that provide uncompensated care.

The legislature finds that the cap on enrollment in the QUEST program should be removed.

SECTION 6. Chapter 346, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§346-    Medical assistance to adults. The department shall not impose a cap on enrollment in the QUEST health insurance program. The department shall enroll all adults who meet the program's income and asset eligibility criteria."

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $       , or so much thereof as may be necessary for fiscal year 2006-2007, to provide QUEST health insurance program coverage for all adults who meet the program's income and asset eligibility criteria.

The sum appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 8. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2006.