STAND. COM. REP. NO. 61

 

Honolulu, Hawaii

                   

 

RE:     S.B. No. 404

        S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

 

Sir:

 

     Your Committee on Health and Human Services, to which was referred S.B. No. 404 entitled:

 

"A BILL FOR AN ACT RELATING TO THE HOSPITAL SUSTAINABILITY PROGRAM,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to preserve access to health care for Medicaid recipients in the State by continuing and strengthening the Hospital Sustainability Program by:

 

     (1)  Modifying the program to:

 

          (A)  Expand the definition of private hospitals subject to the program;

 

          (B)  Increase the fee cap on various hospital sustainability fees;

 

          (C)  Require the Department of Human Services to consult and negotiate with the hospital trade association located in Hawaii regarding fee participation and rates; and

 

          (D)  Require the hospital sustainability fee to discontinue under certain circumstances and provide guidelines for the distribution of remaining funds;

 

     (2)  Making the program permanent;

 

     (3)  Permanently exempting the Hospital Sustainability Program Special Fund from the central service expenses assessment and administrative expenses assessment; and

 

     (4)  Appropriating funds out of the Hospital Sustainability Program Special Fund for the purposes of the program.

 

     Your Committee received testimony in support of this measure from Department of Human Services, Hawaii Pacific Health, The Queen's Health System, Healthcare Association of Hawaii, Kaiser Permanente Hawaii, Hilo Medical Center Foundation, Hawaii Primary Care Association, Democratic Party of Hawaii Kūpuna Caucus' Health and Medical Services Sub-Committee, and One Kalakaua Senior Living Association.

 

     Your Committee finds that the Hospital Sustainability Program and Hospital Sustainability Program Special Fund, established in 2012, play a major role in protecting hospital access for Medicaid beneficiaries, which is especially important as the State continues to work its way out of the coronavirus disease 2019 pandemic and resulting shortage in the State's health care workforce.  The program functions by assessing provider fees, known as hospital sustainability fees, on inpatient and outpatient care services provided by private hospitals.  The collected fees are then used as a basis to obtain federal Medicaid matching funds.  The aggregate state and federal funds are distributed to hospitals as supplemental payments to reduce Medicaid uncompensated care losses.  Your Committee also finds that due to the nature of the federal Medicaid matching formula, increasing the provider fees assessed on hospitals under the program can result in a substantial increase in the State's receipt of federal Medicaid payments without negatively impacting the State's budget.  Your Committee also finds that the Hospital Sustainability Program, which has successfully helped acute care facilities treat the most vulnerable patients in the State, is scheduled to be repealed on December 31, 2023, with funding provisions scheduled to be repealed on June 30, 2024.  This measure will enhance and make the program permanent, thereby preserving and improving access to quality health care for Medicaid recipients.

 

     Your Committee has amended this measure by:

 

     (1)  Adding certain technical, nonsubstantive amendments to sections 36-27 and 36-30, Hawaii Revised Statutes, pertaining to the Hospital Sustainability Program Special Fund exemption from the central service expenses assessment and administrative expenses assessment;

 

     (2)  Inserting an effective date of December 31, 2050, to encourage further discussion; and

 

     (3)  Making other technical, nonsubstantive amendments for the purposes of clarity and consistency.

 

     As affirmed by the record of votes of the members of your Committee on Health and Human Services that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 404, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 404, S.D. 1, and be referred to your Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committee on Health and Human Services,

 

 

 

________________________________

JOY A. SAN BUENAVENTURA, Chair