STAND. COM. REP. NO. 2726

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2245
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Labor and Environment and Ways and Means,
to which was referred S.B. No. 2245 entitled: 

     "A BILL FOR AN ACT RELATING TO MEDICAL FEE SCHEDULES,"

beg leave to report as follows:

     The purpose of this measure is to change the current medical
fee schedule for workers' compensation reimbursement from one-
hundred ten per cent of Medicare to the annually adjusted federal
workers' compensation medical fee schedule for use in Hawaii.

     Testimony in favor of the measure was received from ILWU
Local 142, Hawaii Medical Association, Hawaii Emergency
Physicians Associated, Inc., Hawaii State Chiropractic
Association, Hawaii Psychiatric Medical Association, Kauai County
Medical Society, Hawaii Chapter American Physical Therapy
Association, two members of Hawaii Orthopaedics, Inc., Fukuji &
Lum, The Anesthesia Medical Group, Inc., Children's Orthopaedics,
two members of the Bone and Joint Clinic of Hawaii, Sestak
Rehabilitation Services, eight members of `Ohana Physicians
Group, Maui Occupational Health Center, Windward Orthopaedic
Group, Inc., seven members of Castle Medical Center,
Comprehensive Health & Active Rehabilitation Training, three
members of Lynn C. Fox & Associates, and fifteen individuals.

     Testimony in opposition to the measure was received from the
Department of Labor and Industrial Relations, City and County of
Honolulu Department of Human Resources, Society of Human Resource
Management, Argonaut Insurance Company, ADP Integrated Medical

 
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                                   STAND. COM. REP. NO. 2726
                                   Page 2


Solutions, and Hawaii Insurers Council.  Comments were received
from the Department of Commerce and Consumer Affairs.  Oral
testimony was received from NCCI Hawaii Bureau, Hawaii Employers
Mutual Insurance Company, and one individual.

     In 1995, the workers' compensation reimbursement fee
schedule was set at the Medicare rate plus ten percent; the fifth
lowest fee schedule in the nation.  At this level, health care
providers are being reimbursed at a loss.  A study by the
Legislative Reference Bureau states that the Medicare plus ten
percent rate has "had a negative impact on access to specialty
care by injured workers and has diminished the number and quality
of providers who treat patients in workers' compensation cases".
Tying reimbursement to the federal workers' compensation fee
schedule would be equivalent to one hundred and twenty-five
percent of Medicare; a rate recommended by the LRB report.

     Your Committees amended the measure by retaining the
Medicare plus ten percent rate and instead establishing the
medical fee schedule advisory council to advise the director of
labor and industrial relations on adjustments to the medical fee
schedule.

     Your Committees also made technical, nonsubstantive
amendments to reflect preferred drafting style.

     As affirmed by the records of votes of the members of your
Committees on Labor and Environment and Ways and Means that are
attached to this report, your Committees are in accord with the
intent and purpose of S.B. No. 2245, as amended herein, and
recommend that it pass Second Reading in the form attached hereto
as S.B. No. 2245, S.D. 1, and be placed on the calendar for Third
Reading.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Labor and
                                   Environment and Ways and
                                   Means,



____________________________       ______________________________
CAROL FUKUNAGA, Co-Chair           BOB NAKATA, Chair



____________________________
ANDREW LEVIN, Co-Chair

 
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