| 47 | | - | SECTION 1. The legislature finds that nearly one-third of the State's residents and half of the State's children are enrolled in medicaid. As a result of the coronavirus disease 2019 pandemic, medicaid enrollment in the State has increased forty per cent since March 2020. However, timely access to providers can prove difficult, particularly in rural areas where health care providers are in short supply. In 2022, the State had a shortfall of more than seven hundred fifty full-time physicians and nearly four thousand nonphysician, patient-facing health care workers, such as nurses, technicians, and patient service representatives. The legislature further finds that due to the significant number of Hawaii residents receiving medicaid coverage, health care providers often receive less reimbursement from medicaid than from medicare or commercial insurance for the same service. While some providers, such as large hospitals, large nursing centers, and providers who perform certain services, are reimbursed at cost or at the same rates as medicare, most individual health care professionals, such as physicians, psychiatrists, psychologists, community-based caregivers, advanced practice registered nurses, nurses, certified nursing assistants, and nurse assistants, are not. Lesser reimbursements contribute to the challenges providers face in sustaining practices, leading some health care providers to limit or refuse to accept medicaid patients. Community-based care homes are a vital part of the State's long-term health care continuum that provide round-the-clock care to over twelve thousand patients, many of whom are medicaid patients. If only large hospitals and large nursing centers receive medicaid reimbursement equal to the medicare reimbursement rate, this would cause a substantial reduction of the number of community-based care homes in the State and will lead to a significant number of patients transferring from these care homes to large nursing centers and hospitals, who would not be able to accept the thousands of new patients. The legislature therefore finds it is vital to ensure support, with fair pay, to licensed community-based caregivers, including but not limited to community care foster homes, type-I adult residential care homes, expanded adult residential care homes, and developmentally disabled domiciliary homes. The legislature further finds that the department of human services med-QUEST division completed a study of home and community-based rates paid for community care foster family homes, expanded adult residential care homes, and other home and community-based services. The department of human services med‑QUEST division contracted Milliman, an actuarial firm, for a wide range of services and to conduct the study. The study commenced in July 2022, and the med-QUEST division issued the final report on December 30, 2022. The legislature finds that a key part of the rate study included stakeholder outreach and engagement with home and community-based service providers and their associations, collecting provider cost and wage survey data, and getting provider feedback on draft rate calculations. Not surprisingly, the provider surveys showed significant wage pressure given the current labor market. The rate study methodology used wage and salary data for direct-care staff and supervisors, employee‑related expenses, transportation and administration, program support, overhead, and United States Bureau of Labor Statistics and industry wage indices to pay for employee benefits such as health insurance. The legislature believes that the pandemic dramatically impacted health care and long-term care delivery systems. Many of these changes, particularly as they relate to patient preferences, facility staffing practices, and technology utilization, will persist long after the pandemic abates. Accordingly, now is an opportune time to revisit prior thinking about long-term care reimbursement and investigate ways that it can be reimagined to promote patient care quality, support livable wages for staff, and maximize efficiency. The legislature further finds that the med-QUEST division should undertake rate studies to better understand how the pandemic has shaped long-term care providers. These studies should consider how patient preferences have shifted away from institutional settings and to home and community-based ones; how patient needs evolve with the aging population; the growing complexity of patient care; and what can be done to align reimbursement with long-term trends in Hawaii. Specific attention is also necessary on programs that reward high-quality care; incentivize accepting and caring for medicaid beneficiaries, especially those with complex needs; pay wages necessary for the recruitment and retention of staff across the long-term care continuum; and consider the need to update the aging physical infrastructure of many of the State's facilities. The legislature also finds that it is important to focus on home and community-based service providers who serve groups with high utilization of services and who have gone the longest without a rate update, such as case management agencies, community care foster family homes, and adult day health and day care centers. The Centers for Medicare and Medicaid Services is also changing payment methods for nursing facilities. State medicaid agencies will need to adopt new reimbursement methodologies that align with the new federal payment system. These factors all create opportunities to revise how providers of long‑term care are reimbursed to better meet current and future needs. Accordingly, the purpose of this Act is to ensure the achievement of fair and full funding of medicaid medical care and long-term supports and services providers by: (1) Adjusting the method by which the department of human services calculates payments to providers of medical care and long-term supports and services; and (2) Appropriating funds. SECTION 2. Section 346-59, Hawaii Revised Statutes, is amended to read as follows: "§346-59 Medical care and long-term supports and services payments. (a) The department shall adopt rules under chapter 91 concerning payment to providers of medical care. The department shall determine the rates of payment due to all providers of medical care[,] and long-term supports and services, and pay [such] the amounts in accordance with the requirements of the [appropriations] appropriation act and the Social Security Act, as amended. Payments to critical access hospitals for services rendered to medicaid beneficiaries shall be calculated on a cost basis using medicare reasonable cost principles. (b) Rates of payment to providers of medical care who are individual practitioners, including doctors of medicine, dentists, podiatrists, psychologists, osteopaths, optometrists, and other individuals providing services, shall be based upon the Hawaii medicaid fee schedule. The amounts paid shall not exceed the maximum permitted to be paid individual practitioners or other individuals under federal law and regulation, the medicare fee schedule for the current year, the state limits as provided in the appropriation act, or the provider's billed amount. [The appropriation act shall indicate the percentage of the medicare fee schedule for the year 2000 to be used as the basis for establishing the Hawaii medicaid fee schedule. For any subsequent adjustments to the fee schedule, the legislature shall specify the extent of the adjustment in the appropriation act.] (c) In establishing the payment rates for other noninstitutional items and long-term supports and services, the rates shall not exceed the current medicare payment[,]; the state limits as provided in the appropriation act[,]; the rate determined by the department, which shall be reviewed for services without medicare comparisons on a consistent schedule but no longer than five years in duration; or the provider's billed amount. (d) Payments to health maintenance organizations and prepaid health plans with which the department executes risk contracts for the provision of medical care to eligible public assistance recipients may be made on a prepaid basis. The rate of payment per participating recipient shall be fixed by contract, as determined by the department and the health maintenance organization or the prepaid health plan, but shall not exceed the maximum permitted by federal rules and shall be less than the federal maximum when funds appropriated by the legislature for such contracts require a lesser rate. For purposes of this subsection, "health maintenance organizations" are entities approved as such[, and]; "prepaid health plans" are entities designated as such by the Department of Health and Human Services; and "risk" means the possibility that the health maintenance organization or the prepaid health plan may incur a loss because the cost of providing services may exceed the payments made by the department for services covered under the contract. (e) The department shall prepare each biennial budget request for a medical care appropriation based upon the most current Hawaii medicaid fee schedule available at the time the request is prepared[.] and the payment rates pursuant to subsection (d). The legislature shall consider the rates determined by the department pursuant to subsection (c) in making the legislative appropriation. The director shall submit a report to the legislature on or before January 1 of each year when the department reviews rates without medicare comparisons, indicating an estimate of the amount of money required to be appropriated to pay providers [at the maximum rates permitted by federal and state rules in the upcoming fiscal year.] according to the rates determined by the department without medicare comparisons pursuant to subsection (c)." SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2023-2024 to fund any costs that may arise while the department of human services establishes payment rates pursuant to section 346‑59(c), Hawaii Revised Statutes. The sum appropriated shall be expended by the department of human services for the purposes of this Act. SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 5. This Act shall take effect on July 1, 2050; provided that section 3 shall take effect on July 1, 2023. |
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| 47 | + | SECTION 1. The legislature finds that nearly one-third of the State's residents and half of the State's children are enrolled in medicaid. As a result of the coronavirus disease 2019 pandemic, medicaid enrollment in the State has increased forty per cent since March 2020. However, timely access to providers can prove difficult, particularly in rural areas where health care providers are in short supply. In 2022, the State had a shortfall of more than seven hundred fifty full-time physicians and nearly four thousand nonphysician, patient-facing health care workers, such as nurses, technicians, and patient service representatives. The legislature further finds that due to the significant number of Hawaii residents receiving medicaid coverage, health care providers often receive less reimbursement from medicaid than from medicare or commercial insurance for the same service. While some providers, such as large hospitals, large nursing centers, and providers who perform certain services, are reimbursed at cost or at the same rates as medicare, most individual health care professionals, such as physicians, psychiatrists, psychologists, community-based caregivers, advanced practice registered nurses, nurses, certified nursing assistants, and nurse assistants, are not. Lesser reimbursements contribute to the challenges providers face in sustaining practices, leading some health care providers to limit or refuse to accept medicaid patients. Community-based care homes are a vital part of the State's long-term health care continuum that provide round-the-clock care to over twelve thousand patients, many of whom are medicaid patients. If only large hospitals and large nursing centers receive medicaid reimbursement equal to the medicare reimbursement rate, this would cause a substantial reduction of the number of community-based care homes in the State and will lead to a significant number of patients transferring from these care homes to large nursing centers and hospitals, who would not be able to accept the thousands of new patients. The legislature therefore finds it is vital to ensure support, with fair pay, to licensed community-based caregivers, including but not limited to community care foster homes, type-I adult residential care homes, expanded adult residential care homes, and developmentally disabled domiciliary homes. The legislature further finds that the department of human services med-QUEST division completed a study of home and community-based rates paid for community care foster family homes, expanded adult residential care homes, and other home and community-based services. The department of human services med‑QUEST division contracted Milliman, an actuarial firm, for a wide range of services and to conduct the study. The study commenced in July 2022, and the med-QUEST division issued the final report on December 30, 2022. The legislature finds that a key part of the rate study included stakeholder outreach and engagement with home and community-based service providers and their associations, collecting provider cost and wage survey data, and getting provider feedback on draft rate calculations. Not surprisingly, the provider surveys showed significant wage pressure given the current labor market. The rate study methodology used wage and salary data for direct-care staff and supervisors, employee‑related expenses, transportation and administration, program support, overhead, and United States Bureau of Labor Statistics and industry wage indices to pay for employee benefits such as health insurance. The legislature believes that the pandemic dramatically impacted health care and long-term care delivery systems. Many of these changes, particularly as they relate to patient preferences, facility staffing practices, and technology utilization, will persist long after the pandemic abates. Accordingly, now is an opportune time to revisit prior thinking about long-term care reimbursement and investigate ways that it can be reimagined to promote patient care quality, support livable wages for staff, and maximize efficiency. The legislature further finds that the med-QUEST division should undertake rate studies to better understand how the pandemic has shaped long-term care providers. These studies should consider how patient preferences have shifted away from institutional settings and to home and community-based ones; how patient needs evolve with the aging population; the growing complexity of patient care; and what can be done to align reimbursement with long-term trends in Hawaii. Specific attention is also necessary on programs that reward high-quality care; incentivize accepting and caring for medicaid beneficiaries, especially those with complex needs; pay wages necessary for the recruitment and retention of staff across the long-term care continuum; and consider the need to update the aging physical infrastructure of many of the State's facilities. The legislature also finds that it is important to focus on home and community-based service providers who serve groups with high utilization of services and who have gone the longest without a rate update, such as case management agencies, community care foster family homes, and adult day health and day care centers. The Centers for Medicare and Medicaid Services is also changing payment methods for nursing facilities. State medicaid agencies will need to adopt new reimbursement methodologies that align with the new federal payment system. These factors all create opportunities to revise how providers of long‑term care are reimbursed to better meet current and future needs. Accordingly, the purpose of this Act is to ensure the achievement of fair and full funding of medicaid medical care and long-term supports and services providers by: (1) Adjusting the method by which the department of human services calculates payments to providers of medical care and long-term supports and services; and (2) Appropriating funds. SECTION 2. Section 346-59, Hawaii Revised Statutes, is amended to read as follows: "§346-59 Medical care and long-term supports and services payments. (a) The department shall adopt rules under chapter 91 concerning payment to providers of medical care. The department shall determine the rates of payment due to all providers of medical care[,] and long-term supports and services, and pay [such] the amounts in accordance with the requirements of the [appropriations] appropriation act and the Social Security Act, as amended. Payments to critical access hospitals for services rendered to medicaid beneficiaries shall be calculated on a cost basis using medicare reasonable cost principles. (b) Rates of payment to providers of medical care who are individual practitioners, including doctors of medicine, dentists, podiatrists, psychologists, osteopaths, optometrists, and other individuals providing services, shall be based upon the Hawaii medicaid fee schedule. The amounts paid shall not exceed the maximum permitted to be paid individual practitioners or other individuals under federal law and regulation, the medicare fee schedule for the current year, the state limits as provided in the appropriation act, or the provider's billed amount. [The appropriation act shall indicate the percentage of the medicare fee schedule for the year 2000 to be used as the basis for establishing the Hawaii medicaid fee schedule. For any subsequent adjustments to the fee schedule, the legislature shall specify the extent of the adjustment in the appropriation act.] (c) In establishing the payment rates for other noninstitutional items and long-term supports and services, the rates shall not exceed the current medicare payment[,]; the state limits as provided in the appropriation act[,]; the rate determined by the department, which shall be reviewed for services without medicare comparisons on a consistent schedule but no longer than five years in duration; or the provider's billed amount. (d) Payments to health maintenance organizations and prepaid health plans with which the department executes risk contracts for the provision of medical care to eligible public assistance recipients may be made on a prepaid basis. The rate of payment per participating recipient shall be fixed by contract, as determined by the department and the health maintenance organization or the prepaid health plan, but shall not exceed the maximum permitted by federal rules and shall be less than the federal maximum when funds appropriated by the legislature for such contracts require a lesser rate. For purposes of this subsection, "health maintenance organizations" are entities approved as such[, and ]; "prepaid health plans" are entities designated as such by the Department of Health and Human Services; and "risk" means the possibility that the health maintenance organization or the prepaid health plan may incur a loss because the cost of providing services may exceed the payments made by the department for services covered under the contract. (e) The department shall prepare each biennial budget request for a medical care appropriation based upon the most current Hawaii medicaid fee schedule available at the time the request is prepared[.] and the payment rates pursuant to subsection (d). The legislature shall consider the rates determined by the department pursuant to subsection (c) in making the legislative appropriation. The director shall submit a report to the legislature on or before January 1 of each year when the department reviews rates without medicare comparisons, indicating an estimate of the amount of money required to be appropriated to pay providers [at the maximum rates permitted by federal and state rules in the upcoming fiscal year.] according to the rates determined by the department without medicare comparisons pursuant to subsection (c)." SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2023-2024 to fund any costs that may arise while the department of human services establishes payment rates pursuant to section 346-59(c), Hawaii Revised Statutes. The sum appropriated shall be expended by the department of human services for the purposes of this Act. SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 5. This Act shall take effect on June 30, 2024; provided that section 3 shall take effect on July 1, 2023. |
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