HAH advocating for permanent hospital and nursing sustainability programs, increased Medicaid reimbursement rates this legislative session


Shane Ersland


The Hawaii legislative session is in full throttle, which means the Healthcare Association of Hawaii (HAH) has been busy advocating for bills that have significant impact on the state’s healthcare industry.


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HAH President and CEO Hilton R. Raethel told State of Reform about some of the bills and initiatives the organization is supporting this year. A top priority for HAH has been advocating to make the Hospital Sustainability Program and the Nursing Facility Sustainability Program permanent through Senate Bill 404 and its companion bill, House Bill 1368

The Hospital Sustainability Program supports hospitals’ abilities to provide services to Medicaid recipients, and the Nursing Sustainability Program helps long-term care facilities treat vulnerable patients.

The programs are currently authorized for implementation by the legislature every two years (and had to be authorized annually at one point), but the decade-long success of the programs have led to the proposal to make them permanent. 

“What we’ve done for the last few years with these bills is go back on a biannual basis to get those renewed,” Raethel said. “The primary reason we went back to the legislature was that there was concern that the legislature could use funds for other purposes, which happened in other states. So if the legislature did that, the legislation would die at the end of the year. But because we have developed a strong relationship with the legislature, and because they understand the value of this federal money to the state, hospitals, and nursing facilities, our confidence level went up.”

With full confidence in the legislature, HAH’s goal now is to make the initiatives permanent, Raethel said. 

“We still may have to go back to the legislature to tweak the permanent program,” he said. “Any time you introduce legislation, it requires time and effort. Despite that, there’s still a lot of work to do to shepherd bills through the legislative process. We’ve felt compelled to do that up until now. We’ve decided we’re at a point where we have enough of a comfort level that we believe we can make this legislation permanent and not go back every two years, which becomes a big time demand.”

HAH is also advocating for an increase to Medicaid professional fees. SB 397 and its companion bill, HB 1367, would increase Medicaid reimbursements from 60% of Medicare rates to 100% of Medicare rates for all professionals.  

“This is the first year to introduce this,” Raethel said. “Why does HAH introduce legislation affecting physicians? The reason is that, while we represent hospitals and other healthcare facilities, many of the physicians in this state are either employed or affiliated with our members. So there’s a very direct impact to our membership on the fee schedules. While this would be a benefit to physicians who are not affiliated with our members, the majority are employed by our members.”

HAH worked with Med-QUEST to determine specific proposal details, Raethel said.

“It primarily affects doctors, but it also affects psychologists, (certified nursing assistants), anyone who is an advanced practice nurse, and anyone who is tied to the fee schedule,” he said. “The current Medicaid fee schedule is set at 60% of Medicare, so we asked Med-QUEST to do an analysis of moving from 60, and we felt that instead of going for a rate in between, there was a very compelling case to go from 60 to 100. And that’s moving through the legislature.”

Raethel also discussed some bills HAH has testified in opposition to. That includes SB 1580, which would mandate minimum staff-to-patient ratios for hospitals, care homes, and dialysis facilities. Legislators in Washington and Oregon are also considering legislation that would implement minimum staff-to-patient ratios, and Oregon’s HB 2697 has caused disagreement between healthcare professionals in the state. Raethel said the establishment of a mandated staffing ratio would not be beneficial to Hawaii’s workforce shortage.

“Having a staffing ratio provides a number of challenges,” he said. “Patient loads vary throughout the day. People are discharged throughout the day, and having mandated staffing ratios creates a number of logistical issues. We do have staffing shortages in Hawaii and across the nation, but staffing ratios do not conjure up additional nurses. We are supportive of increasing the healthcare workforce, but do not believe mandated staffing ratios is the most appropriate reason for doing that.”

HAH also testified in opposition to HB 517, which would have established a health data exchange framework. HAH supports the establishment of a data exchange, but the bill did not provide enough details about how it would be implemented, Raethel said.

“The problem with the bill is there were too many unknowns,” he said. “It was not specified as to what the platform would be, what it would cost, or who would fund it. We are not opposed to the concept of a data exchange; we’re supportive of it. What we’re opposed to is state law with requirements when there’s a lack of clarity about what it would cost and who would fund it.”

The Hawaii Medical Service Association (HMSA) eventually withdrew its proposal for the data exchange, Raethel said. 

“To HMSA’s credit, they withdrew it to give the state the opportunity to have a discussion on how to do it,” he said. “In the future, we might collaborate on a bill that would have a data exchange, but we need to understand more of what we’re agreeing to before we support the legislation. We will discuss it with our members. California is the only state that has a data exchange. When they set it up, there was a material amount of dollars that was appropriated to fund it. There was no clarity on that in Hawaii.”