SB 1564: RELATING TO MEDICAID.

A BILL FOR AN ACT

RELATING TO MEDICAID.

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

     SECTION 1.  The legislature finds that there is a strong demand for community-based care options for kupuna.  In a 2021 quantitative research study conducted by AARP, among Hawaii residents aged forty-five years and older, seventy-five per cent said that having affordable long‑term care options in their community was an important independent living issue.  Maintaining a connection with family and friends and the ability to continue to visit familiar health care providers is much easier when the State's kupuna can be cared for close to home.

     The legislature further finds that reimbursement rates that do not have medicare rates for equivalent services, such as all community‑based waiver services, are reviewed and determined by the department of human services at least every five years.  The last review of home- and community‑based reimbursement rates for residential services by the department of human services' med-QUEST division was conducted through a third-party study by the actuarial firm Milliman and reported on December 30, 2022.  The study developed benchmark comparison rates for certain home- and community-based services, including residential services provided in community care foster family homes and expanded adult residential care homes, in-home services, and case management services for home- and community-based case management agencies.

     The legislature additionally finds that, for all provider types included in the study conducted by Milliman, current median direct care wages paid by the home- and community-based services providers fell below the United States Bureau of Labor Statistics twenty-fifth percentile for those occupation codes and titles, except for licensed practical nurses, who fell just below the fiftieth percentile.  Providers face significant wage pressures for registered nurses and certified nursing assistants and are competing with facilities, which are reimbursed at higher rates by medicaid, and private pay services for the same labor force.  Most providers therefore relied on contracted registered nurses.  Providers were not able to offer benefits, including health insurance, to their employees and relied on substitute caregivers who were sometimes unpaid, including families and friends of the providers.  High inflation has also further increased costs for operators providing residential services in community care foster family homes and expanded adult residential care homes.

     Accordingly, the purpose of this Act is to appropriate funds to increase the long-term care reimbursement from medicaid to fund certain medicaid home- and community-based services, including licensed developmental disability domiciliary homes, community care foster family homes, certified adult foster homes, and Type II expanded adult residential care homes.  It is the intent of the legislature that funding for services in this Act, when combined with the maximum federal matching funds available for this expenditure, increases by $2,127 per client per month, for a new total payment equivalent of $3,824 per client per month for service providers.

     SECTION 2.  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 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to increase the funding of certain medicaid home- and community-based services, including adult day programs and residential services offered in community care foster family homes and expanded adult residential care homes; provided that the department of human services shall obtain the maximum federal matching funds available for this expenditure.

     The sums appropriated shall be expended by the department of human services for the purposes of this Act.

     SECTION 3.  This Act shall take effect on December 31, 2050.

Report Title:

DHS; Medicaid; Home- and Community-Based Services; Developmental Disability Domiciliary Homes; CCFFH; ARCH; Adult Foster Care; Appropriations

Description:

Appropriates funds to the Department of Human Services to increase the funding of certain Medicaid home- and community-based services, including adult day programs and residential services offered in community care foster family homes and expanded adult residential care homes.  Effective 12/31/2050.  (SD1)

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 Medicaid.

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

     SECTION 1.  The legislature finds there is a strong demand for community-based care options for kupuna.  In a 2021 quantitative research study conducted by AARP, among Hawaii residents aged forty-five years and older, seventy-five per cent said that having affordable long‑term care options in their community was an important independent living issue.  Maintaining a connection with family and friends and the ability to continue to visit familiar health care providers is much easier when the State's kupuna can be cared for close to home.

     The legislature further finds that reimbursement rates that do not have medicare rates for equivalent services, such as all community‑based waiver services, are reviewed and determined by the department of human services at least every five years.  The last review of home and community‑based reimbursement rates for residential services by the department of human services' med-QUEST division was conducted through a third-party study by the actuarial firm Milliman and reported on December 30, 2022.  The study developed benchmark comparison rates for certain home and community-based services, including residential services provided in community care foster family homes and expanded adult residential care homes, in-home services, and case management services for home and community-based case management agencies.

     The legislature additionally finds that, for all provider types included in the study conducted by Milliman, current median direct care wages paid by the home and community-based services providers fell below the United States Bureau of Labor Statistics twenty-fifth percentile for those occupation codes and titles, except for licensed practical nurses, who fell just below the fiftieth percentile.  Providers face significant wage pressures for registered nurses and certified nursing assistants and are competing with facilities, which are reimbursed at higher rates by medicaid, and private pay services for the same labor force.  Most providers therefore relied on contracted registered nurses.  Providers were not able to offer benefits, including health insurance, to their employees and relied on substitute caregivers who were sometimes unpaid, including families and friends of the providers.  High inflation has also further increased costs for operators providing residential services in community care foster family homes and expanded adult residential care homes.

     The purpose of this Act is to appropriate funds to increase the long-term care reimbursement from medicaid to fund certain medicaid homes and community-based services, including licensed developmental disability domiciliary homes, community care foster family homes, certified adult foster homes, and Type II expanded adult residential care homes.  It is the intent of the legislature that funding for services in this Act, when combined with the maximum federal matching funds available for this expenditure, increases by $2,127 per client per month, for a new total payment equivalent of $3,824 per client per month for service providers.

     SECTION 2.  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 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to increase the funding of certain medicaid home and community-based services, including adult day programs and residential services offered in community care foster family homes and expanded adult residential care homes; provided that the department of human services shall obtain the maximum federal matching funds available for this expenditure.

     The sums appropriated shall be expended by the department of human services for the purposes of this Act.

     SECTION 3.  This Act shall take effect on July 1, 2025.

Report Title:

DHS; Medicaid; Home and Community-Based Services; DDDOM; CCFFH; ARCH; Adult Foster Care; Appropriation

Description:

Appropriates funds to increase the funding of certain Medicaid home and community-based services, including adult day programs and residential services offered in community care foster family homes and expanded adult residential care homes.

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. 504

Honolulu, Hawaii

RE:    S.B. No. 1564

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Health and Human Services, to which was referred S.B. No. 1564 entitled:

"A BILL FOR AN ACT RELATING TO MEDICAID,"

begs leave to report as follows:

     The purpose and intent of this measure is to appropriate funds to the Department of Human Services to increase the funding of certain Medicaid home- and community-based services, including adult day programs and residential services offered in community care foster family homes and expanded adult residential care homes.

     Your Committee received testimony in support of this measure from AARP Hawaiʻi and seven individuals.

     Your Committee received comments on this measure from the Department of Human Services.

     Your Committee finds that there is a strong demand for community-based care options for kupuna in the State since receiving care close to home makes it easier for kupuna to maintain connection with family and friends and continue to visit familiar health care providers.  Your Committee further finds that community-based services providers face significant wage pressures when hiring registered nurses and certified nursing assistants and are competing with other facilities, which are reimbursed at higher rates by Medicaid and private pay services for the same labor force.  This measure increases the long-term care reimbursement rates from Medicaid to fund certain Medicaid home- and community-based services to attract, retain, and properly compensate the appropriate health care professionals so that they can continue to care for the State's most vulnerable populations, including kupuna.

     Your Committee has amended this measure by:

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

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

     Your Committee notes that this measure contains an unspecified appropriation amount.  Should your Committee on Ways and Means choose to deliberate on this measure, your Committee respectfully requests that it consider inserting an appropriation amount that would total $35,000,000, comprised of $14,300,000 in state funds and $20,700,000 in matching federal funds, to increase the funding of certain Medicaid home- and community-based services, including adult day programs and residential services offered in community care foster family homes and expanded adult residential care homes.

     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. 1564, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1564, 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,