RELATING TO HUMAN SERVICES.

HB702

HOUSE OF REPRESENTATIVES

H.B. NO.

702

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to human services
.

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

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SECTION
1.
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The legislature finds that most of
the State's kupuna would prefer to live in their own homes for as long as they
can.
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In-home services are key to ensuring
kupuna and people with disabilities stay in their own home; these services
include helping with activities of daily living such as meal preparation,
cleaning, bathing, mobility support, and other forms of personal care.
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In a 2021 quantitative research study among
Hawaii residents forty-five years of age and older, sixty-five per cent were
extremely or very concerned about being able to age in place and eighty-three
per cent of those surveyed said it was extremely or very important to them to
stay in their homes as they get older.
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Helping individuals live in their own home instead of in an institutional
nursing facility is also far less costly.

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The
legislature further finds that reimbursement rates that do not have medicare
rates for equivalent services, such as in-home care services, are reviewed and
determined by the department of human services at least every five years.
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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.
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The study developed benchmark comparison
rates for in-home services, including homemaker/companion/chore, personal
care/personal assistance/attendant care, and private duty nursing by registered
nurse and licensed practical nurse and modeled three rate scenarios for in-home
services (low, medium, and high) under different direct care staff wage and
caseload assumptions.
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The low scenario
includes the lowest wage or highest caseload assumptions to calculate the
lowest reimbursement rates, meaning wage assumptions are set at the United
States Department of Labor Bureau of Labor Statistics twenty-fifth percentile
for specific occupation codes and titles; the medium scenario includes middle
wage or caseload assumptions, meaning wage assumptions are set at the fiftieth
percentile; and the high scenario includes the highest wages or lowest caseload
assumptions to calculate the highest rates, meaning wage assumptions are set at
the seventy-fifth percentile.

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The rate
studies found there is tremendous wage pressure for direct care workers for
home settings, given the highly competitive labor market in the State for
similar paying jobs.
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For all in-home
provider types included in the study, current median direct care wages paid by
the operators fell below the United States Department of Labor 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.

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The legislature additionally finds that the
data collected in the Milliman study is now five years old and the cost of
providing care has risen substantially.
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The
legislature notes that data on the actual costs of care provided by Kokua
Healthcare's personal assistance services in 2024 had rates exceeding the high
scenario listed in the Milliman study.
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Kokua
Healthcare is unable to provide services to medicaid clients as the
reimbursement is too low to cover costs.
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Other in-home services providers are facing
similar pressure, which impacts access to care for medicaid clients.

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The legislature therefore finds that
increasing the reimbursement rates to the high scenario modeled in the Milliman
study will best address the significant wage pressure felt by in-home services
providers and the rising cost of care and is more likely to make this essential
care available to medicaid clients.

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The
purpose of this Act
is to appropriate funds to increase
funding of medicaid in-home services.
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The corresponding federal matching funds will also increase, resulting
in a larger impact on reimbursement received by service providers
.

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SECTION
2.
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There is appropriated out of the
general revenues of the State of Hawaii the sum of $16,160,000 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 funding
for medicaid in-home services; provided that the department of human services
shall obtain the maximum federal matching funds available for this expenditure.

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

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

INTRODUCED BY:

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Report Title:

DHS;
Medicaid; In-Home Services; Matching Funds; Appropriation

Description:

Appropriates
funds to increase the funding for Medicaid in-home services, conditioned on the
Department of Human Services obtaining the maximum federal matching funds.

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