STAND. COM. REP. NO. 193

Honolulu, Hawaii

RE:    S.B. No. 912

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Madam:

     Your Committee on Human Services and Housing, to which was referred S.B. No. 912 entitled:

"A BILL FOR AN ACT RELATING TO LONG-TERM CARE FACILITIES,"

begs leave to report as follows:

     The purpose and intent of this measure is to provide an inflationary adjustment to long-term care facility prospective payment rates.

     Your Committee received testimony in support of this measure from the Healthcare Association of Hawaii, The Queen's Health Systems, and Hawaii Health Systems Corporation.  Your Committee received comments on this measure from the Department of Human Services.

     Your Committee finds that about seventy percent of patients in long-term care facilities are Medicaid enrollees, and that payments for Medicaid enrollees do not cover the actual costs of care, which creates a financial challenge for facilities trying to provide quality healthcare.  Your Committee further finds that long-term care facilities have not received an inflationary update to their reimbursement rates for many years, and the gap between costs and reimbursements has widened considerably.

     Your Committee received testimony from the Department of Human Services expressing concern that increasing the long-term care facility prospective payment rate would create cost implications that could adversely impact priorities in the executive budget and limit the Department's ability to adjust the Medicaid budget in response to fiscal down turns and other fluctuations.  While recognizing the important role that long-term care facilities play in the State, your Committee also acknowledges the Department's position and determines that more information is needed to illustrate the financial challenges facing long-term care facilities as well as the effects of an increase to the reimbursement rate.

     Therefore, your Committee has amended this measure by:

     (1)  Deleting the language that would have increased the long-term care facility prospective payment rate and replacing it with language requiring the Department of Human Services to submit a report to the Legislature every three years that demonstrates long-term care facilities' annual fiscal year costs and reimbursements for Medicaid enrollees as well as the potential impact of increasing the prospective payment rate; and

     (2)  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 and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 912, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 912, 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 and Housing,

____________________________

SUZANNE CHUN OAKLAND, Chair