STAND. COM. REP. NO. 63

Honolulu, Hawaii

RE: S.B. No. 397

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Health and Human Services, to which was referred S.B. No. 397 entitled:

"A BILL FOR AN ACT RELATING TO PROFESSIONAL MEDICAID SERVICES,"

begs leave to report as follows:

The purpose and intent of this measure is to appropriate funds to increase Medicaid reimbursements to eligible health care professionals to match the current Medicare fee schedule.

Your Committee received testimony in support of this measure from the Department of Human Services; State Council on Developmental Disabilities; University of Hawai‘i System; Alohacare; AARP Hawai‘i; Hawaii Association of Health Plans; Healthcare Association of Hawaii; Hawai‘i State Center for Nursing; Hawai‘i Association of Professional Nurses; Kaiser Permanente Hawai‘i; Palolo Chinese Home; Hilo Medical Center Foundation; Aloha House, Inc.; Democratic Party of Hawai‘i Kūpuna Caucus' Health and Medical Services Sub-Committee; Kauai Community Health Alliance; Hawai‘i Pacific Health; Hawaii Substance Abuse Coalition; Hawai‘i Health & Harm Reduction Center; One Kalakaua Senior Living Association; The Queen's Health System; Hawaii Provider Shortage Crisis Task Force; and eight individuals.

Your Committee finds that health care in Hawaii is financed primarily by Medicare, Medicaid, and private health care insurance. According to the Department of Human Services, Medicaid enrollment has increased in the State by over forty percent in the last three years. As a result, nearly one-third of Hawaii residents are covered by Medicaid. Due to the significant number of Hawaii residents enrolled in Medicaid, health care providers who care for Medicaid recipients are receiving less reimbursement than those who provide the same care for patients covered by Medicare or private health care insurance. Moreover, while some providers (including critical access hospitals, community health centers, and providers who perform certain services) are reimbursed at cost or at the same rates as Medicare, most individual health care professionals (including physicians, psychiatrists, psychologists, and advanced practice registered nurses) are not. Your Committee further finds that the lesser reimbursement rate contributes to the challenges these providers face in sustaining their practices, leading some to limit or refuse to accept Medicaid patients, and adding to Hawaii's health professional shortage.

Your Committee also finds that with the additional general fund appropriation of $30,000,000 provided by this measure, the Department of Human Services with federal approval, will qualify to access federal matching funds of approximately $43,000,000, which will be used to implement the Medicaid reimbursement rate increase to eligible health care professionals in the State who provide care for Medicaid recipients. The increase may encourage health care providers to accept Medicaid patients and improve access to health care for Medicaid patients in the State.

Your Committee has amended this measure by:

(1) Inserting an effective date of December 31, 2050, to encourage further discussion; 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 Health and Human Services that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 397, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 397, S.D. 1, and be referred to your Committee on Ways and Means.

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

________________________________

JOY A. SAN BUENAVENTURA, Chair