Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.C.R. No. 77, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to request the Legislative Reference Bureau to conduct a study of recommended procedures that will ensure adequacy of state health care reimbursements to providers who provide services for Medicaid or QUEST recipients for the actual costs of health care services.

Testimony in support of this measure was submitted by Healthcare Association of Hawaii, Kaiser Permanente, Hawaii Pacific Health, the Hawaii Business Roundtable, and the Hawaii Long Term Care Association. The Legislative Reference Bureau submitted comments on this measure.

Your Committee finds that the State pays for a considerable amount of health care and controls certain types of payments for health care made to providers. Your Committee further finds that it is in the public interest to ensure that these health care payments made with state funds or controlled by the State are sufficient to cover the actual costs of care in the Medicare or QUEST context and under the workers compensation insurance system.

Accordingly, your Committee has amended this measure by requesting that the Legislative Reference Bureau conduct two studies that examine payments to providers of health care services: one for Medicaid or QUEST recipients and another for injured employees under workers compensation insurance. Your Committee further amended this measure by requesting that the Legislative Reference Bureau submit these two studies on a staggered basis prior to the Regular Sessions of 2007 and 2008.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Housing that is attached to this report, your Committee concurs with the intent and purpose of S.C.R. No. 77, S.D. 1, as amended herein, and recommends its adoption in the form attached hereto as S.C.R. No. 77, S.D. 2.