Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Human Services, to which was referred S.B. No. 24 entitled:

begs leave to report as follows:

The purpose of this measure is to ensure that Hawaii's medicaid program fairly reimburses providers for providing medical care services to eligible medicaid recipients, both through fee for service and the QUEST program.

Testimony in support of this measure was submitted by the Healthcare Association of Hawaii. Testimony in opposition to this measure was submitted by the Department of Human Services.

Your Committee 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. Thus, your Committee believes that Hawaii's medicaid program fairly reimburses providers for providing medical care services to eligible medicaid recipients.

Your Committee adopted an amendment to appropriate $34.8 million to pay providers of medical care the current medicaid fee schedule.

As affirmed by the record of votes of the members of your Committee on Human Services that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 24, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 24, S.D. 1, and be referred to the Committee on Ways and Means.