THE SENATE	S.B. NO.	1564
THIRTY-THIRD LEGISLATURE, 2025		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO MEDICAID.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that there is a strong demand for community-based care options for kupuna. In a 2021 quantitative research study conducted by AARP, among Hawaii residents aged forty-five years and older, seventy-five per cent said that having affordable long‑term care options in their community was an important independent living issue. Maintaining a connection with family and friends and the ability to continue to visit familiar health care providers is much easier when the State's kupuna can be cared for close to home.

The legislature further finds that reimbursement rates that do not have medicare rates for equivalent services, such as all community‑based waiver services, are reviewed and determined by the department of human services at least every five years. The last review of home- and community‑based reimbursement rates for residential services by the department of human services' med-QUEST division was conducted through a third-party study by the actuarial firm Milliman and reported on December 30, 2022. The study developed benchmark comparison rates for certain home- and community-based services, including residential services provided in community care foster family homes and expanded adult residential care homes, in-home services, and case management services for home- and community-based case management agencies.

The legislature additionally finds that, for all provider types included in the study conducted by Milliman, current median direct care wages paid by the home- and community-based services providers fell below the United States Bureau of Labor Statistics twenty-fifth percentile for those occupation codes and titles, except for licensed practical nurses, who fell just below the fiftieth percentile. Providers face significant wage pressures for registered nurses and certified nursing assistants and are competing with facilities, which are reimbursed at higher rates by medicaid, and private pay services for the same labor force. Most providers therefore relied on contracted registered nurses. Providers were not able to offer benefits, including health insurance, to their employees and relied on substitute caregivers who were sometimes unpaid, including families and friends of the providers. High inflation has also further increased costs for operators providing residential services in community care foster family homes and expanded adult residential care homes.

Accordingly, the purpose of this Act is to appropriate funds to increase the long-term care reimbursement from medicaid to fund certain medicaid home- and community-based services, including licensed developmental disability domiciliary homes, community care foster family homes, certified adult foster homes, and Type II expanded adult residential care homes. It is the intent of the legislature that funding for services in this Act, when combined with the maximum federal matching funds available for this expenditure, increases by $2,127 per client per month, for a new total payment equivalent of $3,824 per client per month for service providers.

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to increase the funding of certain medicaid home- and community-based services, including adult day programs and residential services offered in community care foster family homes and expanded adult residential care homes; provided that the department of human services shall obtain the maximum federal matching funds available for this expenditure.

The sums appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 3. This Act shall take effect on December 31, 2050.

Report Title:

DHS; Medicaid; Home- and Community-Based Services; Developmental Disability Domiciliary Homes; CCFFH; ARCH; Adult Foster Care; Appropriations

Description:

Appropriates funds to the Department of Human Services to increase the funding of certain Medicaid home- and community-based services, including adult day programs and residential services offered in community care foster family homes and expanded adult residential care homes. Effective 12/31/2050. (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.