Increases medical care payments. Appropriates funds. (SD1)

A BILL FOR AN ACT

SECTION 1. The legislature finds that Hawaii's medicaid and QUEST reimbursement rates for medical care are inadequate to cover the cost of providing medical care services. These reimbursement rates have only marginally increased in the past several years. If the State does not contribute its fair share to cover these costs, providers of medical care will inevitably turn to private payers to make up the difference. In turn, this cost shifting will invariably increase the cost of health care for Hawaii's employers. The purpose of this Act is to ensure that Hawaii's medicaid program fairly reimburses providers for providing medical care services to eligible medicaid recipients, both through the fee for service and the QUEST program and appropriates the funding which is estimated at $34.8 million.

SECTION 2. Section 346-59, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

"(b) Rates of payment to providers of medical care who are individual practitioners, including doctors of medicine, dentists, podiatrists, psychologists, osteopaths, optometrists, and other individuals providing services, shall be based upon the Hawaii medicaid fee schedule. The amounts paid shall not exceed the maximum permitted to be paid individual practitioners or other individuals under federal law and regulation, [the medicare fee schedule for the current year,] the state limits as provided in the appropriation act, or the provider's billed amount.

The appropriation act shall indicate the percentage of the medicaid fee schedule for the most current year [2000 to] that shall be used as the basis for establishing the Hawaii medicaid fee schedule[.]; provided that the percentage shall not be less than the most current medicare fee schedule. For any [subsequent] adjustments to the fee schedule, the legislature shall specify the extent of the adjustment in the appropriation act.

(c) In establishing the payment rates for other noninstitutional items and services, the rates shall not exceed [the current medicare payment,] the state limits as provided in the appropriation act[, the rate determined by the department,] or the provider's billed amount."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $34,800,000 or so much thereof as may be necessary for fiscal year 2005-2006, and the same sum, or so much thereof as may be necessary for fiscal year 2006-2007, for reimbursing health care providers at not less than the current medicare fee schedule.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2005.