SB715

THE SENATE	S.B. NO.	715
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII

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 strengthening long-term care services and support is of broad interest nationally and in the State. Recently, a Council of State Governments task force on effective and sustainable long-term care included a work group focused on sustainable funding. The med-QUEST division of the department of human services co-led the group, which authored a short briefing paper with national, state, and local recommendations. One of the recommendations included a rate study for home- and community-based services.

The legislature further finds that the med-QUEST division of the department of human services completed a study of home- and community-based rates paid for community care foster family homes, expanded adult residential care homes, and adult day health and adult day care centers and other community-based services. The med-QUEST division of the department of human services 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 of the department of human services issued the final report on December 30, 2022.

The legislature also finds that a key part of the rate study was stakeholder outreach and engagement with home- and community-based services providers and their associations, including the collection of provider cost and wage survey data and provider feedback on draft rate calculations. Not surprisingly, the provider surveys showed significant wage pressure due to current labor market conditions. 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 COVID-19 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 of the department of human services 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 to home- and community-based settings; 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 the State. It is also necessary to give specific attention to 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 updating 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 services 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, adult residential care homes, expanded adult residential care homes, and adult day health and adult day care centers. The legislature further finds that the Centers for Medicare and Medicaid Services are 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 new systems 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 appropriate funds to achieve full funding status, including estimated payment increases, of medicaid home- and community-based services.

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 achieve full funding status, including estimated payment increases, of medicaid home- and community-based services; provided that the department of human services shall obtain the maximum federal matching funds available for this expenditure; provided further that the department of human services shall pursue all funding sources known to the State, including private grants, before expending any general revenue appropriated pursuant to this Act.

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.

INTRODUCED BY:	_____________________________

Report Title:

DHS; Medicaid; Long-Term Care Services; Home- and Community-Based Services; Reimbursement; Rates; Appropriations

Description:

Appropriates funds to the Department of Human Services to achieve full funding status, including estimated payment increases, of Medicaid home- and community-based services.

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

SB 715: RELATING TO MEDICAID.

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