STAND. COM. REP. NO. 2687

Honolulu, Hawaii

RE:    S.B. No. 2923

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 2923, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO WORKERS' COMPENSATION MEDICAL FEE SCHEDULE,"

begs leave to report as follows:

     The purpose and intent of this measure is to establish a more efficient mechanism to renew and update health and medical service fees payable under the State's workers' compensation medical fee schedule.

     More specifically, this measure:

     (1)  Requires the Director of Labor and Industrial Relations to update the workers' compensation medical fee schedule annually;

     (2)  Authorizes the Director of Labor and Industrial Relations to establish a workers' compensation medical fee ceiling that exceeds one hundred ten per cent of the fees prescribed in the Medicare Resource Based Relative Value Scale applicable to Hawaii for evaluation and management services;

     (3)  Appropriates funds for fiscal year 2014-2015 for two full-time equivalent positions in the Department of Labor and Industrial Relations; and

     (4)  Appropriates funds for fiscal year 2014-2015 for the Department of Labor and Industrial Relations to contract for the performance of an analysis of the impact this measure will have on workers' compensation claimants' access to appropriate treatment.

     Your Committee received written comments in support of this measure from Hawaii Medical Association, ILWU Local 142, and two individuals.  Written comments in opposition were received from The Chamber of Commerce of Hawaii, Hawaii Insurers Council, Hawaiian Electric Company, and Property Casualty Insurers Association of America.  The Department of Human Resources Development, Department of Labor and Industrial Relations, City and County of Honolulu Department of Human Resources, and Work Injury Medical Association of Hawaii submitted written comments on the measure.

     Your Committee finds that Act 97, Session Laws of Hawaii 2013, required the Auditor to assist the Director of Labor and Industrial Relations in adjusting and periodically reviewing the adequacy of the workers' compensation medical fee schedule.  In Auditor's Report No. 13-10, entitled "A Report on Methodology for the Department of Labor and Industrial Relations' Workers' Compensation Medical Fee Schedule," the Auditor made several recommendations to the Legislature, including:

     (1)  Authorizing the Director of Labor and Industrial Relations to establish a maximum allowable fee ceiling annually for eligible evaluation and management services;

     (2)  Requiring the Department of Labor and Industrial Relations to assess the cost impact and effect on access to medical services attributable to adoption of the methodology recommended by the Auditor;

     (3)  Funding department personnel resources in order to implement the methodology recommended by the Auditor; and

     (4)  Providing sufficient resources to the Department of Labor and Industrial Relations to hire one or more contractors to perform ongoing analysis on the impact of adopting the methodology recommended by the Auditor.

     This measure is intended to implement the recommendations made by the Auditor.

     Your Committee has amended this measure by:

     (1)  Specifying that the report of the Director of Labor and Industrial Relations shall include an analysis of the cost impact of the measure; and

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

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2923, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2923, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DAVID Y. IGE, Chair