STAND. COM. REP. NO. 2075

Honolulu, Hawaii

RE:    S.B. No. 2842

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Human Services, to which was referred S.B. No. 2842 entitled:

"A BILL FOR AN ACT MAKING AN EMERGENCY APPROPRIATION TO THE DEPARTMENT OF HUMAN SERVICES FOR THE MED-QUEST DIVISION,"

begs leave to report as follows:

     The purpose and intent of this measure is to appropriate $6,020,727 in general funds as an emergency appropriation to the Department of Human Services for general support for health care payments to address the funding shortfall in the Medicaid program resulting from a delay in reimbursement.

     Your Committee received testimony in support of this measure from the Department of Human Services, Community Alliance for Mental Health, and one individual.  Your Committee received comments on this measure from the Hawaii Health Connector.

     Your Committee finds that the Department provided services and funding to the Hawaii Health Connector to develop components of the health insurance exchange required by the Patient Protection and Affordable Care Act.  The services and funding provided, along with a mandatory 5.25 percent cost allocation for the Medicaid Kauhale On-Line Eligibility Assistance system, were paid for with general funds with the understanding that the Hawaii Health Connector would reimburse the Department through the Hawaii Health Connector's own federal funds.  As of November 1, 2013, the costs owed to the Department totaled $6,020,727.  While encumbered, the Department is unable to use these funds for other purposes and cannot fund its core operations.

Your Committee received testimony from the Department of Human Services indicating that, since the original emergency appropriation request, the Hawaii Health Connector has reimbursed the Department for some of the services and monies provided by the Department.  Your Committee finds that the Department has been reimbursed for the following:

     (1)  Work performed that would have allowed Connector system functionality so individuals could browse for and select qualified health plans for both Medicaid and the Connector at the same time;

     (2)  Work performed on the transition necessary to revise the Connector system to separate the browsing and selection functions for Medicaid and the Connector when the design was changed; and

     (3)  Work performed to allow the Connector to interface with the state data services hub.

     Accordingly, your Committee has amended this measure by:

     (1)  Adding language reflecting the services and corresponding amounts for which the Department of Human Services has recently been reimbursed;

     (2)  Amending the appropriation to $4,854,037 to reflect the $1,166,690 the Department has recently received from the Hawaii Health Connector; and

     (3)  Making technical, nonsubstantive amendments 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 S.B. No. 2842, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2842, 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