STAND. COM. REP. NO. 299

Honolulu, Hawaii

RE: S.B. No. 462

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committees on Human Services and Commerce, Consumer Protection, and Health, to which was referred S.B. No. 462 entitled:

"A BILL FOR AN ACT RELATING TO THE NURSING FACILITY SUSTAINABILITY PROGRAM,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Extend the nursing facility sustainability fee program to 2021;

(2) Allow the nursing facility sustainability fee to be used to enhance capitated rates for the purpose of paying quality incentives;

(3) Increase the nursing facility sustainability fee limit from 4.0 percent to 5.5 percent of net patient service revenue;

(4) Increase the per resident daily maximum fee from $13.46 to $20 for each facility, and increases the per resident reduced daily maximum fee from $5.85 to $9 for facilities that meet certain exceptions; and

(5) Appropriate funds.

Your Committees received testimony in support of this measure from the Department of Human Services, The Queen's Health Systems; Ohana Pacific Management Company, Healthcare Association of Hawaii, and O‘ahu County Committee on Legislative Priorities of the Democratic Party of Hawai‘i.

Your Committees find that nursing facilities in the State face major financial challenges in providing quality long-term care for Hawaii residents. As a result, the Legislature created the nursing facility sustainability program to increase Medicaid payments to nursing facilities in recognition that Medicaid payments to nursing facilities are below the actual costs of care. The additional federal funds obtained via the fee program authorized by the nursing facility sustainability program have helped to reduce the amount of losses incurred by long-term care facilities and maintain access to care for Medicaid recipients. This measure extends the nursing facility sustainability program, which will preserve access to quality health care for Medicaid recipients.

Your Committees have amended this measure by:

(1) Clarifying that all facilities owned, operated by, or affiliated with the Hawaii Health Systems Corporation are exempted from the nursing facility sustainability fee, as these facilities participate in a different program to cover uncompensated care costs; and

(2) 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 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. 462, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 462, S.D. 1, 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

________________________________ RUSSELL E. RUDERMAN, Chair