S.B. NO.



S.D. 2


H.D. 1














     SECTION 1.  Doctors are critical components of our society, providing a very important service to everyone in the State, and it is the job of the legislature to ensure that the State provides the best quality of life possible for all of its residents.  Addressing the needs and concerns of health care providers is a key step toward keeping Hawaii healthy.

     Over the years, a number of doctors have retired or left Hawaii, especially the neighbor islands, citing reasons that include high medical malpractice insurance rates, low insurance reimbursement rates, and the high cost of living.  Hawaii has been unable to replace these doctors in a manner that provides Hawaii residents with timely access to adequate health care.

     Furthermore, in addition to the general shortage of doctors in Hawaii, many of the remaining physicians are reluctant to accept and treat medicaid patients, making it even more difficult for this particular population to receive medical services on a regular and emergency basis.

     The purpose of this Act is to address the shortage of physicians in Hawaii, including those who are willing to accept medicaid patients, by establishing a tax credit for physicians or clinics if at least       per cent of a physician or clinic's total patient caseload consists of medicaid patients, the physician or clinic is located in and treats patients from a rural area, or the physician or clinic responds to emergency calls.

     SECTION 2.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

     "§235‑    Medicaid physician tax credit.  (a)  There shall be allowed to each qualified taxpayer subject to the taxes imposed by this chapter, a medicaid physician tax credit that shall be applied to the qualified taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

     (b)  The tax credit shall be in an amount equal to      per cent of the amount of medical malpractice insurance premium paid by the qualified taxpayer for the taxable year in which the credit is properly claimed.

     (c)  As used in this section, "qualified taxpayer" means

a physician licensed under chapter 453 or a clinic that employs physicians licensed under chapter 453, physician assistants licensed under chapter 453, or advanced practice registered nurses registered under section 457-8.5 and pays the cost of their malpractice insurance premiums; provided that

at least        per cent of the physician's or clinic's total patient caseload consists of medicaid patients accepted and treated by the physician or clinic; and provided further that the physician or the clinic does not owe the State delinquent taxes, penalties, or interest.

     (d)  The director of taxation shall prepare forms that may be necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91 necessary to effectuate the purposes of this section.

     (e)  Claims for the tax credit under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the taxable year for which the credit may be properly claimed."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2050, and shall apply to taxable years beginning after December 31, 2010.


Report Title:

Medicaid Physicians; Tax Credit



Establishes a tax credit equal to        per cent of the amount of medical malpractice insurance premium paid by a physician or clinic if at least       per cent of their total patient caseload consists of patients on Medicaid.  Effective July 1, 2050.  (SB595 HD1)





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