STAND. COM. REP. NO. 1052_______

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1413
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Finance, to which was referred H.B. No.
1413 entitled: 


begs leave to report as follows:

     The purpose of this bill is to require the Department of
Human Services (DHS) to modify the QUEST risk factor adjustment
by taking into account serious medical conditions in determining
compensation to individual community health centers.

     AlohaCare, the Hawaii Nurses' Association, Kalihi-Palama
Health Center, Waianae Coast Comprehensive Health Center,
Waimanalo Health Center, and several individuals submitted
testimony in support of the measure.  The Department of Human
Services, the Hawaii State Primary Care Association,  Hawaii
Medical Service Association, Kaiser Permanente, and Queen's
Health Management commented on the measure.

     Your Committee has amended the bill by:

     (1)  Requiring DHS to conduct an annual review of risk
          factor adjustment;

     (2)  Clarifying that DHS compensates health plans under
          contract and not the individual community health

                                 STAND. COM. REP. NO. 1052_______
                                 Page 2

     (3)  Specifying that any risk factor adjustment shall use
          actual QUEST member experience data;

     (4)  Requiring DHS to consult with the various health plans
          to identify high risk health characteristics to be used
          in readjusting the risk factor; and

     (5)  Deleting section 3 which required DHS to adjust its
          current payment to health centers.

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
1413, as amended herein, and recommends that it pass Third
Reading in the form attached hereto as H.B. No. 1413, H.D. 1.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Finance,

                                   DWIGHT Y. TAKAMINE, Chair