HOUSE OF REPRESENTATIVES

H.R. NO.

222

TWENTY-FOURTH LEGISLATURE, 2007

 

STATE OF HAWAII

 

 

 

 

 

HOUSE  RESOLUTION

 

 

urging the Hawaii Congressional Delegation to seek amendments to the Medicare payment system to increase reimbursements to Hawaii's hospitals.

 

 

 


     WHEREAS, although Hawaii has a proud history of providing essential health services in an innovative and cost-effective manner, a harsh reality is that the high cost of living in Hawaii has had a detrimental impact on our health care industry; and

 

     WHEREAS, one of the biggest problems is that Medicaid and Medicare reimbursements are too low to cover costs; and

 

     WHEREAS, Medicare has altered provider payments in various ways as a method to address concerns about access, especially in rural areas; and

 

     WHEREAS, one of those methods alters the adjustments made to Medicare physician fees that account for geographic differences in practice costs known as the geographic practice cost indices (GPCIs); and

 

     WHEREAS, GPCIs are geographically based price indexes for 89 Medicare payment localities that include; "physician work" that accounts for the professional earnings in the area; "practice expense" that accounts for resource costs such as rent and staff salaries; and "professional liability" costs; and

 

     WHEREAS, Medicare also bases its physician payment system on a set of relative value units (RVUs) representing physician work, practice expense, and professional liability insurance for the specific physician services provided; and

 

     WHEREAS, to determine payment for physician services, the RVU for physician work is multiplied by the GPCI for physician work, and the same is done for practice expense and professional liability insurance, the products are summed, and the sum is multiplied by a dollar amount "conversion factor" to determine a physician payment; and

 

     WHEREAS, in 2003 the RVUs for physician work, practice expense, and professional liability insurance were 17 percent higher in the State of Alaska than in Hawaii; and

 

     WHEREAS, although the cost of living in Hawaii is greater, Alaska has been afforded an increased amount for health care service reimbursements based on its "frontier" status; and

 

     WHEREAS, the Hawaiian Islands are the Earth's most isolated parcels of land lying in the middle of the North Pacific Ocean, 2400 miles from both the nearest continental land mass, North America, and the rest of the Polynesian islands in the South Pacific Ocean; and

 

     WHEREAS, because of Hawaii's geographic location and other factors, the cost of living in Hawaii greatly exceeds the cost of living in most other states; and

 

     WHEREAS, the federal government pays nonforeign area cost-of-living allowances (COLAs) based on differences in living costs between the allowance areas and the Washington, DC area; and

 

     WHEREAS, Section 5941 of Title 5, United States Code, limits COLAs to a maximum of 25 percent of basic pay; and

 

     WHEREAS, in recognition of Hawaii's higher cost of living federal employees in the state are provided COLA payments of 25 percent of basic pay while Alaska federal employees are afforded 24 percent in consideration of that state's lower cost of living; and

 

     WHEREAS, a joint study conducted by the Taubman Center for State and Local Government at Harvard University's John F. Kennedy School of Government and the office of United States Senator Daniel Patrick Moynihan revealed that if per capita income is measured in real terms, Hawaii ranks 47th at $19,755 compared to the national average of $24,231; and


     WHEREAS, federal reimbursements must be increased to Hawaii to provide fairer reimbursements and more revenue for Hawaii's ailing health care system; now, therefore,

 

     BE IT RESOLVED by the House of Representatives of the Twenty-fourth Legislature of the State of Hawaii, Regular Session of 2007, that the Hawaii Congressional Delegation (Delegation) is urged to seek amendments to the Medicare payment system to change reimbursement formulas that negatively affect small states like Hawaii with efficient use statistics and comparatively low reimbursements; and

 

     BE IT FURTHER RESOLVED that the Delegation is also requested to seek changes in Medicare payment policies to provide fairer, more equitable reimbursements to Hawaii's physicians; and

 

     BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to Hawaii's Congressional Delegation, the Governor, and Director of Human Services.

 

 

 

 

OFFERED BY:

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Report Title: 

Medicare Reimbursements; Hawaii Health Care Industry