STAND. COM. REP. NO. 378

Honolulu, Hawaii

RE:    S.B. No. 307

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Madam:

     Your Committees on Health and Commerce and Consumer Protection, to which was referred S.B. No. 307 entitled:

"A BILL FOR AN ACT RELATING TO HEALTH,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Establish a licensure requirement for suppliers of durable medical equipment, prosthetics, orthotics, and related equipment (DMEPOS) participating in the nationwide competitive bidding program through an annual inspection by the Office of Health Care Assurance; and

     (2)  Appropriate funds from the Office of Health Care Assurance special fund to administer the durable medical equipment licensing program.

     Your Committees received testimony in support of this measure from the Hawaii Health Systems Corporation, Healthcare Association of Hawaii, and Hawaii Primary Care Association.  Your Committees received testimony in opposition to this measure from the Executive Office on Aging.  Your Committees received comments on this measure from the Department of Health, Department of the Attorney General, Department of Commerce and Consumer Affairs, and Hawaii Medical Service Association.

     Your Committees find that Medicare beneficiaries in Hawaii are experiencing a reduction in access to quality care as a result of the change in the way Medicare purchases its DMEPOS.  Because only thirteen of the ninety-seven vendors selected are located within the State, the minimum shipping time is two to four days, and the typical wait time for physician-ordered wheelchairs and hospital beds is four to eight weeks.

     Your Committees further find that without access to timely, local services, Medicare beneficiaries in Hawaii have been forced to forego necessary durable medical equipment devices.  This restricted access to care has led to reductions in health, increases in preventable admissions and readmissions, and increases in costs to beneficiaries and the Medicare system.

     Your Committees have amended this measure by:

     (1)  Amending the definition of "supplier" and other references to apply licensure requirement to any supplier of DMEPOS, not just those participating in the national bidding program;

     (2)  Changing the licensing agency from the Executive Office on Aging to the Office of Health Care Assurance;

     (3)  Clarifying that a licensed supplier of DMEPOS must provide proof of business registration law compliance, including required tax identification numbers;

     (4)  Adopting the Department of Health's recommendation to authorize, rather than require, the Office of Health Care Assurance to establish rules for the purposes of implementing the licensure program;

     (5)  Clarifying that a supplier must provide proof of business registration law compliance and tax identification numbers to the Office of Health Care Assurance in order to be licensed and for annual inspections;

     (6)  Expanding the purpose of the appropriations to fill two permanent full-time equivalent positions to establish the durable medical equipment licensing program as well as help support other current licensure programs;

     (7)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (8)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Health and Commerce and Consumer Protection that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 307, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 307, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Health and Commerce and Consumer Protection,

____________________________ ROSALYN H. BAKER, Chair

____________________________ JOSH GREEN, Chair