STAND. COM. REP. NO 31

Honolulu, Hawaii

RE:    S.B. No. 308

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committees on Human Services and Commerce, Consumer Protection, and Health, to which was referred S.B. No. 308 entitled:

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

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Beginning with fiscal year 2017-2018, provide an annual inflationary adjustment in the methodology used to reimburse facilities for the long-term care of Medicaid recipients; and

     (2)  Appropriate funds to provide an inflationary adjustment to long-term care facilities' provider-specific prospective payment rates for fiscal years 2017-2018 and 2018-2019.

     Your Committees received testimony in support of this measure from the Hawaii Health Systems Corporation; East Hawaii Region of the Hawaii Health Systems Corporation; Ohana Pacific Management Company, Inc.; The Queen's Health Systems; Hawai‘i Pacific Health; Healthcare Association of Hawaii; One Kalakaua Senior Living; Oahu Care Facility; and two individuals.  Your Committees received comments on this measure from the Department of Human Services.

     Your Committees find that long-term care facilities in the State face major financial challenges in providing quality health care for Hawaii residents, largely because the payments for Medicaid enrollees do not cover the actual costs of care.  The Legislature did approve funding for an inflationary update to Medicaid rates for long-term care facilities in 2016, the first increase in approximately seven years.  That one-time appropriation of approximately $1,500,000 for fiscal year 2016-2017 generated an additional $2,500,000 in federal funds.  However, despite that infusion of funds, the Medicaid shortfall will likely persist as the rising costs of care continue to outpace reimbursements.

     As affirmed by the records of votes of the members of your Committees on Human Services and Commerce, Consumer Protection, and Health that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 308 and recommend that it pass Second Reading and be referred to your Committee on Ways and Means.

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

________________________________ ROSALYN H. BAKER, Chair

________________________________ JOSH GREEN, Chair