HB2572

SECTION 1. The legislature finds there is a lack of access to psychiatric services in all areas of Hawaii, urban and rural areas alike.

Mental health consumers, including persons who live lives of desperation because of undiagnosed mental illness, may be volatile and could be dangerous to themselves and to others. These consumers need fast and direct access to quality psychiatric services.

There are a much greater number of MedQuest patients with mental illnesses than any other medical condition. Some estimate that the prevalence of mental illness among the MedQuest population who are being seen by primary care physicians in community health centers is as high as 70 per cent. These primary care physicians are overwhelmed and unable to provide the quality of care necessary to stabilize and treat patients with mental health problems. Options for the primary care physician are to refer the patient to a psychiatrist in private practice or refer them to the community mental health centers. However, there are problems with the availability of care from both of these referral sources.

Recent surveys have shown that Hawaii appears to have an adequate number of psychiatrists. However, many psychiatrists in private practice are reluctant to see MedQuest patients for reasons such as:

(1) The low reimbursement Medicaid provides, which is currently at 66 per cent of Medicare, and is not enough to cover office expenses; and

(2) The potential loss of reimbursements for mental health patients who are notorious for not keeping appointments.

The department of health's adult mental health division has a comprehensive network of community mental health centers, but they can only see patients meeting the criteria of seriously, chronically mentally ill. Patients with depression, anxiety, situational disorders, post-traumatic stress disorder, and substance abuse patients are being left untreated.

The costs of untreated mental illness to our community are staggering when the consequences are considered, and which include disability, unemployment, substance abuse, homelessness, inappropriate incarceration, and suicide.

Increasing the rate of reimbursement provided to psychiatrists will open up treatment services on Oahu to MedQuest patients. Adding a neighbor island differential will provide incentives for psychiatrists living on neighbor islands to start seeing MedQuest patients once again and encourage Oahu-based psychiatrists to provide services on neighbor islands. Increasing reimbursements has proven successful in other states such as Wyoming which had seven unfilled psychiatry positions in its most rural areas of the state. Skepticism was high that the Wyoming department of health would ever fill those vacancies because of the rural location. The state legislature stepped in and raised the reimbursements and salaries to make the state psychiatry positions nationally competitive. Within a year, all positions were filled. Alaska is another state that has successfully used incentives and rate differentials to improve access to adult and child mental health services. Hawaii can benefit from the use of this same strategy.

The purpose of this Act is to increase the rate of reimbursement provided to psychiatrists who provide services to Medicaid beneficiaries in Hawaii, to not less than 100 per cent of Medicare, and to add a neighbor island differential of an additional $30 per visit for psychiatric services to improve access to psychiatric care throughout the state.

SECTION 2. Chapter 432, Hawaii Revised Statutes, is amended by adding a new section to article 1 to be appropriately designated and to read as follows:

"§432:1- Reimbursement; medicare fee schedule. Effective January 1, 2009, and for each succeeding calendar year thereafter, each participating psychiatrist within the network of a mutual benefit society in the state shall be reimbursed for the provision of medical services to Medicaid beneficiaries, at a rate of not less than one hundred per cent of the Medicare fee schedule in effect for the current year; provided that psychiatrists practicing in the counties of Hawaii, Kauai, or Maui shall be reimbursed an additional $30 per visit."

SECTION 3. Chapter 432D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§432D- Reimbursement; medicare fee schedule. Effective January 1, 2009, and for each succeeding calendar year thereafter, each participating psychiatrist within the network of a health maintenance organization in the state shall be reimbursed for the provision of medical services to Medicaid beneficiaries, at a rate of not less than one hundred per cent of the Medicare fee schedule in effect for the current year; provided that psychiatrists practicing in the counties of Hawaii, Kauai, or Maui shall be reimbursed an additional $30 per visit."

SECTION 4. Section 346-59, Hawaii Revised Statutes, is amended to read as follows:

"§346-59 Medical care payments. (a) The department shall adopt rules under chapter 91 concerning payment to providers of medical care. The department shall determine the rates of payment due to all providers of medical care, and pay such amounts in accordance with the requirements of the appropriations act and the Social Security Act, as amended. Payments to critical access hospitals for services rendered to medicaid beneficiaries shall be calculated on a cost basis using medicare reasonable cost principles.

(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 medicare fee schedule for the year 2000 to be used as the basis for establishing the Hawaii medicaid 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.

(d) Payments to health maintenance organizations and prepaid health plans with which the department executes risk contracts for the provision of medical care to eligible public assistance recipients may be made on a prepaid basis. The rate of payment per participating recipient shall be fixed by contract, as determined by the department and the health maintenance organization or the prepaid health plan, but shall not exceed the maximum permitted by federal rules and shall be less than the federal maximum when funds appropriated by the legislature for such contracts require a lesser rate. For purposes of this subsection, "health maintenance organizations" are entities approved as such, and "prepaid health plans" are entities designated as such by the Department of Health and Human Services; and "risk" means the possibility that the health maintenance organization or the prepaid health plan may incur a loss because the cost of providing services may exceed the payments made by the department for services covered under the contract.

(e) Subsections (a), (b), and (d) notwithstanding, rates of payment for services rendered to Medicaid beneficiaries by psychiatrists shall be not less than one hundred per cent of the medicare fee schedule for the current year; provided that psychiatrists practicing in the counties of Hawaii, Kauai, or Maui shall be reimbursed an additional $30 per visit; provided further that the level of reimbursement required by this subsection and established by contract for the provision of medical care shall be contingent on payment of that same level of reimbursement to the psychiatrist that renders the services.

[~~(e)~~] (f) The department shall prepare each biennial budget request for a medical care appropriation based upon the most current Hawaii medicaid fee schedule available at the time the request is prepared.

The director shall submit a report to the legislature on or before January 1 of each year indicating an estimate of the amount of money required to be appropriated to pay providers at the maximum rates permitted by federal and state rules in the upcoming fiscal year."

SECTION 5. 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 2008-2009 representing the State's share of funding, for the purposes of this Act.

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

SECTION 6. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 7. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2008.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2572
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII