HB 2501: DOH; HHSC; SHPDA; Auditor; Hospitals; Hospital Systems; Medicare Patients; Uninsured Patients; Reports; Rules; Financial Assistance

A BILL FOR AN ACT

RELATING TO HEALTH CARE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that health care institutions in the State expend significant financial resources providing care to medicare beneficiaries with extraordinary medical needs and to uninsured patients who lack the ability to pay.  These costs are borne unevenly across these institutions, threatening the long-term sustainability of essential health care services.

     The purpose of this Act is to balance the financial burden of high-cost medicare and uninsured patients among health care institutions that receive state funding by requiring:

     (1)  Hospitals and hospital systems to submit annual certified reports regarding costs associated with medicare and uninsured patients to the department of health, Hawaii health systems corporation, and state health planning and development agency;

     (2)  The department of health, Hawaii health systems corporation, and state health planning and development agency to review the reports, establish standards and procedures, and adopt rules;

     (3)  The department of health to consider the reports when determining the department's budget request and designate financial assistance requests in an equitable way; and

     (4)  The office of the auditor to conduct periodic audits of the financial assistance distributed to hospitals and hospital systems.

     SECTION 2.  Chapter 323D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§323D-     Mandatory reporting; medicare and uninsured patients; audits; rules; budget.  (a)  Every hospital or hospital system that receives any state general fund appropriation, capital improvement funds, or other state financial assistance shall submit an annual report certified by the auditor to the department of health, Hawaii health systems corporation, and state health planning and development agency that provides the following information:

     (1)  The number of medicare patients whose annual cost of care exceeded $50,000 and the net loss to the hospital or hospital system to provide care to these patients; and

     (2)  The number of uninsured patients whose annual cost of care exceeded $5,000 and the net loss to the hospital or hospital system to provide care to these patients.

     (b)  The department of health, in coordination with the Hawaii health systems corporation and the state health planning and development agency, shall:

     (1)  Review and verify the reports submitted pursuant to subsection (a);

     (2)  Establish uniform accounting standards and reporting procedures; and

     (3)  Adopt rules pursuant to chapter 91 necessary to carry out the purposes of this section, including rules related to:

          (A)  Cost accounting methodologies;

          (B)  Patient eligibility determinations;

          (C)  Reporting formats and timelines;

          (D)  Verification and audit procedures; and

          (E)  Redistribution calculations.

     (c)  In determining the amount of general fund appropriations, capital improvement funding, or other state financial assistance to be requested in the department of health's budget, the department of health shall consider the reports filed pursuant to subsection (a) and designate financial assistance requests, not to exceed $          , in such a way as to equitably distribute the financial burden associated with medicare and uninsured patients across all hospitals and hospital systems that receive state funds.

     (d)  The office of the auditor shall conduct periodic audits of the funds distributed to hospitals and hospital systems pursuant to subsection (c) to ensure compliance with this section.

     (e)  For the purposes of this section, "hospital" means an institution licensed by the department of health pursuant to section 321-14.5."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 3000.

Report Title:

DOH; HHSC; SHPDA; Auditor; Hospitals; Hospital Systems; Medicare Patients; Uninsured Patients; Reports; Rules; Financial Assistance

Description:

Requires hospitals and hospital systems to submit annual certified reports regarding costs associated with Medicare and uninsured patients to the Department of Health, Hawaii Health Systems Corporation, and State Health Planning and Development Agency.  Requires the Department of Health, Hawaii Health Systems Corporation, and State Health Planning and Development Agency to review the reports, establish standards and procedures, and adopt rules.  Requires the Department of Health to consider the reports when determining the department's budget request and designate financial assistance requests in an equitable way.  Requires the Office of the Auditor to conduct periodic audits of the financial assistance distributed to hospitals and hospital systems.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to health care.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that health care institutions in the State expend significant financial resources providing care to medicare beneficiaries with extraordinary medical needs and to uninsured patients who lack the ability to pay.  These costs are borne unevenly across these institutions, threatening the long-term sustainability of essential health care services.

     The purpose of this Act is to balance the financial burden of high-cost medicare and uninsured patients among health care institutions that receive state funding by requiring:

     (1)  Hospitals and hospital systems to submit annual certified reports regarding costs associated with medicare and uninsured patients to the department of health, Hawaii health systems corporation, and state health planning and development agency;

     (2)  The department of health, Hawaii health systems corporation, and state health planning and development agency to review the reports, establish standards and procedures, and adopt rules;

     (3)  The department of health to consider the reports when determining the department's budget request and designate financial assistance requests in an equitable way; and

     (4)  The office of the auditor to conduct periodic audits of the financial assistance distributed to hospitals and hospital systems.

     SECTION 2.  Chapter 323D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§323D-     Mandatory reporting; medicare and uninsured patients; audits; rules; budget.  (a)  Every hospital or hospital system that receives any state general fund appropriation, capital improvement funds, or other state financial assistance shall submit an annual report certified by the auditor to the department of health, Hawaii health systems corporation, and state health planning and development agency that provides the following information:

     (1)  The number of medicare patients whose annual cost of care exceeded $50,000 and the total amount expended by the hospital or hospital system to provide care to these patients; and

     (2)  The number of uninsured patients whose annual cost of care exceeded $5,000 and the total amount expended by the hospital or hospital system to provide care to these patients.

     (b)  The department of health, in coordination with the Hawaii health systems corporation and the state health planning and development agency, shall:

     (1)  Review and verify the reports submitted pursuant to subsection (a);

     (2)  Establish uniform accounting standards and reporting procedures; and

     (3)  Adopt rules pursuant to chapter 91 necessary to carry out the purposes of this section, including rules related to:

          (A)  Cost accounting methodologies;

          (B)  Patient eligibility determinations;

          (C)  Reporting formats and timelines;

          (D)  Verification and audit procedures; and

          (E)  Redistribution calculations.

     (c)  In determining the amount of general fund appropriations, capital improvement funding, or other state financial assistance to be requested in the department of health's budget, the department of health shall consider the reports filed pursuant to subsection (a) and designate financial assistance requests, not to exceed $          , in such a way as to equitably distribute the financial burden associated with medicare and uninsured patients across all state hospitals and hospital systems.

     (d)  The office of the auditor shall conduct periodic audits of the funds distributed to hospitals and hospital systems pursuant to subsection (c) to ensure compliance with this section.

     (e)  For the purposes of this section, "hospital" means an institution licensed by the department of health pursuant to section 321-14.5."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

Report Title:

DOH; HHSC; SHPDA; Auditor; Hospitals; Hospital Systems; Medicare Patients; Uninsured Patients; Reports; Rules; Financial Assistance

Description:

Requires hospitals and hospital systems to submit annual certified reports regarding costs associated with Medicare and uninsured patients to the Department of Health, Hawaii Health Systems Corporation, and State Health Planning and Development Agency.  Requires the Department of Health, Hawaii Health Systems Corporation, and State Health Planning and Development Agency to review the reports, establish standards and procedures, and adopt rules.  Requires the Department of Health to consider the reports when determining the department's budget request and designate financial assistance requests in an equitable way.  Requires the Office of the Auditor to conduct periodic audits of the financial assistance distributed to hospitals and hospital systems.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  844-26

Honolulu, Hawaii

                , 2026

RE:   H.B. No. 2501

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

     Your Committee on Finance, to which was referred H.B. No. 2501, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HEALTH CARE,"

begs leave to report as follows:

     The purpose of this measure is to require:

     (1)  Hospitals and hospital systems to submit annual reports certified by the Auditor regarding costs associated with Medicare and uninsured patients to the Department of Health, Hawaii Health Systems Corporation, and State Health Planning and Development Agency;

     (2)  The Department of Health, Hawaii Health Systems Corporation, and State Health Planning and Development Agency to review the reports, establish standards and procedures, and adopt rules;

     (3)  The Department of Health to consider the reports when determining the Department's budget request and designate financial assistance requests in an equitable way; and

     (4)  The Office of the Auditor to conduct periodic audits of the financial assistance distributed to hospitals and hospital systems.

     Your Committee received testimony in support of this measure from the State Health Planning and Development Agency.  Your Committee received comments on this measure from the Office of the Auditor; Hawaiʻi Health Systems Corporation; Healthcare Association of Hawaii; and The Queen's Health Systems.

     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. 2501, H.D. 1, and recommends that it pass Third Reading.

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

STAND. COM. REP. NO.  475-26

Honolulu, Hawaii

                , 2026

RE:   H.B. No. 2501

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

     Your Committees on Health and Consumer Protection & Commerce, to which was referred H.B. No. 2501 entitled:

"A BILL FOR AN ACT RELATING TO HEALTH CARE,"

beg leave to report as follows:

     The purpose of this measure is to balance the financial burden of high-cost Medicare and uninsured patients among health care institutions that receive state funds by:

     (1)  Requiring hospitals and hospital systems to submit annual certified reports detailing the costs of care for certain Medicare and uninsured patients;

     (2)  Requiring the Department of Health, Hawaii Health Systems Corporation, and State Health Planning and Development Agency to review the reports, establish standards and procedures, and adopt rules;

     (3)  Directing the Department of Health to consider the reports when determining the Department's budget request and to designate financial assistance requests in an equitable manner; and

     (4)  Requiring the Office of the Auditor to conduct periodic audits of the financial assistance distributed to hospitals and hospital systems.  

     Your Committees received comments on this measure from the Department of Health; Office of the Auditor; Hawaii Health Systems Corporation; Healthcare Association of Hawaii; and The Queen's Health Systems.

     Your Committees find that the State's hospitals and hospital systems bear significant and often uneven financial burdens when providing care to high-need Medicare beneficiaries and uninsured patients, with health care institutions serving rural or medically underserved areas bearing a disproportionately large share of the uncompensated costs.  Your Committees further find that a standardized, statewide system for quantifying and comparing these expenses will enable the State to better understand the budgetary needs and financial pressures faced by individual institutions.  This measure is intended to strengthen the financial stability of the State's health care infrastructure and improve the State's ability to ensure equitable care for all residents by requiring the Department of Health to collect certain financial data from State hospitals and hospital systems for use in its budget determinations.

     Your Committees have amended this measure by:

     (1)  Requiring hospital and hospital systems to report on their net loss from caring for high-need Medicare beneficiaries and uninsured patients, rather than the total amount expended;

     (2)  Changing the effective date to July 1, 3000, to encourage further discussion; and

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

     As affirmed by the records of votes of the members of your Committees on Health and Consumer Protection & Commerce that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2501, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2501, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committees on Health and Consumer Protection & Commerce,