STAND. COM. REP. NO. 389

Honolulu, Hawaii

RE:    S.B. No. 1672

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Human Services and Public Housing, to which was referred S.B. No. 1672 entitled:

"A BILL FOR AN ACT RELATING TO HEALTH,"

begs leave to report as follows:

     The purpose of this measure is to amend the law pertaining to the Medicaid Fee Schedule to require an annual adjustment for inflation; appropriate funds to retroactively adjust for inflation, payments made to fee-for-service providers for fiscal year 2001-2002 and bienniums 2003-2005 and 2005-2007; and change the Medicaid Fee Schedule to one hundred per cent of the 2006 Medicare Fee Schedule.

     Kaiser Permanente; Hawaii Chapter, American Physical Therapy Association; and Hawaii Pacific Health submitted testimony in support of this measure.  The Department of Human Services submitted testimony in opposition.

     Your Committee received a statement from the Department of Human Services that this measure, if passed, would cost the State approximately $40,619,356 for the Medicaid Fee-For-Service Program and $29,557,498 for the Medicaid QUEST Program each fiscal year.  According to the Department of Human Services, the rates for the QUEST health plans are based on the prevailing Medicaid Fee Schedule, and any increases to the Medicaid fees will also increase the QUEST fees.

     Your Committee finds that inadequate payment and reimbursement from Medicaid have compromised access to medical care not only for the uninsured and those covered by Medicaid, but also for those individuals who have private employer-based health insurance.  Hawaii's hospitals in particular have been detrimentally affected by the inadequacy of Medicaid reimbursements and payments that are far below cost.

     It is your Committee's intent to try and meet rising health care costs and ensure that Hawaii's residents have continued access to quality health care.  Your Committee has amended this measure by making technical, nonsubstantive changes for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Human Services and Public Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1672, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1672, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Human Services and Public Housing,

____________________________

SUZANNE CHUN OAKLAND, Chair