STAND. COM. REP. NO. 3107

Honolulu, Hawaii

RE:    S.C.R. No. 79

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committees on Human Services and Health, to which was referred S.C.R. No. 79 entitled:

"SENATE CONCURRENT RESOLUTION REQUESTING THE DIRECTOR OF HUMAN SERVICES TO REBASE THE BASIC PROSPECTIVE PAYMENT SYSTEM RATES FOR INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH INTELLECTUAL DISABILITIES THAT SERVE MEDICAID RECIPIENTS TO BE EFFECTIVE JULY 1, 2015, AND THE DIRECTOR OF HEALTH TO INCLUDE SUFFICIENT FUNDING TO COVER ANY INCREASE IN BASIC PAYMENT SYSTEM RATES RESULTING FROM REBASING IN ITS 2015-2017 BIENNIUM BUDGET,"

beg leave to report as follows:

     The purpose and intent of this measure is to prevent a one year delay in rebasing of the prospective payment system rates for intermediate care facilities for individuals with intellectual disabilities that serve Medicaid recipients by:

     (1)  Requesting the Department of Human Services to perform the rebasing for the fiscal year ending June 30, 2016, to be effective July 1, 2015, and using cost reports from providers from the base year ending June 30, 2013; and

     (2)  Urging the Director of Health to include sufficient funding to cover any increase in basic prospective payment system rates resulting from the rebasing in its 2015-2017 biennium budget.

     Your Committees received testimony in support of this measure from the Department of Health, State Council on Developmental Disabilities, The Arc in Hawaii, ARC of Maui County, Hawaii Disability Rights Center, and forty-three individuals.  Your Committees received comments on this measure from the Department of Human Services.

     Your Committees find that, especially due to suspended annual inflation adjustments and increased costs of workers' compensation insurance, a one year delay in rebasing of prospective payment rates would be a significant financial burden for operators of intermediate care facilities for individuals with intellectual disabilities that serve Medicaid recipients.  According to section 17-1739.2-17, Hawaii Administrative Rules, the Department of Human Services is required to perform a rebasing using updated cost report data so that basic prospective payment system rates are recalculated every eight years at minimum.  Your Committees received testimony from the Department of Human Services indicating a willingness to rebase the prospective payment system rates for operators of intermediate care facilities to be effective July 1, 2015, so long as the Department of Health provides the funding necessary to cover the rebasing.

     As affirmed by the records of votes of the members of your Committees on Human Services and Health that are attached to this report, your Committees concur with the intent and purpose of S.C.R. No. 79 and recommend that it be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Human Services and Health,

____________________________ JOSH GREEN, Chair

____________________________ SUZANNE CHUN OAKLAND, Chair