Honolulu, Hawaii



RE:    S.B. No. 2542

       S.D. 1




Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii




     Your Committees on Health and Human Services and Public Housing, to which was referred S.B. No. 2542 entitled:




beg leave to report as follows:


     The purpose of this measure is to ensure that the community health center system remains financially viable and stable in the face of the increasing needs of the population of uninsured and underinsured residents.


     Specifically, this measure establishes a process that enables community health centers and rural health clinics to receive supplemental Medicaid payments and seek modifications to their scope of services.  In addition, this measure appropriates funds to adequately pay federally qualified community health centers for services for the uninsured.


     Your Committees received testimony in support of this measure from the Hamakua Health Center, Inc., West Hawaii Community Health Center, Inc., Waikiki Health Center, Kalihi-Palama Health Center, and the Waimanalo Health Center.  The Department of Health, the Department of Human Services, Hawaii Primary Care Association, and Waianae Coast Comprehensive Health Center submitted testimony in support with comments.


     Your Committees find that federally qualified health centers and rural health clinics are essential components of Hawaii's health care system.  Two of the most important sources of operating revenues for these community health centers are the Med-QUEST program and subsidies for care for the uninsured.  These revenue sources continue to provide inadequate funding and reimbursements that are more than a year overdue, causing the much needed community health centers to be financially unstable and putting the public's health at risk.


     Your Committees amended this measure by:


     (1)  Deleting its contents and inserting language that will make the State federally compliant with all established deadlines;


     (2)  Inserting language that simplifies the process by which federally qualified health centers and rural health clinics receive supplemental Medicaid payments and authorizes the prospective payment system rates to be adjusted for changes in the scope of services furnished by participating federally qualified health centers and rural health clinics;


     (3)  Deleting the appropriation for the implementation of the prospective payment system, based on the Department of Human Services indication that there are no fiscal implications for prospective payment services changes for fiscal year 2009; and


     (4)  Making technical, nonsubstantive changes for the purposes of clarity, consistency, and style.


     As affirmed by the records of votes of the members of your Committees on Health and Human Services and Public Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2542, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2542, S.D. 1, and be referred to the Committee on Ways and Means.


Respectfully submitted on behalf of the members of the Committees on Health and Human Services and Public Housing,