STAND. COM. REP. NO. 849

Honolulu, Hawaii

RE:    H.B. No. 594

       H.D. 2

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Human Services, to which was referred H.B. No. 594, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO HEALTH,"

begs leave to report as follows:

     The purpose and intent of this measure is to appropriate funds to the Department of Human Services to match available federal Disproportionate Share Hospital (DSH) funds allocated to the State.

     Your Committee received testimony in support of this measure from Kaiser Permanente; Healthcare Association of Hawaii; The Queen's Medical Center; The Chamber of Commerce of Hawaii; Hawaii Government Employees Association, AFSCME, Local 152, AFL-CIO; and one individual.  Your Committee received comments on this measure from the Department of Human Services.

     Your Committee finds that the federal government makes DSH payments available to hospitals that serve high numbers of low-income patients.  DSH partially pays for care that is not covered by insurance such as Medicare, Medicaid, or private health insurance.  Your Committee further finds that Hawaii does not receive DSH funding on a regular basis.  Hawaii temporarily lost DSH funding when the State created its QUEST program.  However, Hawaii's Congressional Delegation has been able to secure $10,000,000 per year in DSH payments through legislation such as the Patient Protection and Affordable Care Act.  These federal funds may be matched by state funds using the Federal Medical Assistance Percentage.

     According to testimony received by your Committee, the Department of Human Services submitted a state plan amendment to the federal Centers for Medicare and Medicaid Services covering the period from July 1, 2009, through June 30, 2010.  The DSH payment for this period was paid to hospitals in February 2011.  Your Committee also finds that the next DSH period will be July 1, 2010, through June 30, 2011, and the applicable Federal Medical Assistance Percentage is expected to be 50.48 percent for that period, which corresponds to $9,809,826 for the State's share.

     Accordingly, your Committee has amended this measure by:

     (1)  Inserting an appropriation amount of $9,809,826; and

     (2)  Making a technical, nonsubstantive amendment for the purposes of clarity and consistency.

     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 H.B. No. 594, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 594, H.D. 2, 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,

____________________________

SUZANNE CHUN OAKLAND, Chair