"Felix"; Medicaid

Requires DOH, by 8/31/99, to develop: (1) service definitions for
mental health services for "Felix" class children that are
comparable to Medicaid definitions; and (2) fee schedule and
billing codes comparable to Medicaid and QUEST.  Requires
implementation by 8/31/2000, and report to legislature before
convening of 2001 regular session.  (HB847 HD2)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  In December, 1998, the auditor issued a report
 2 entitled "Assessment of the State's Efforts Related to the Felix
 3 Consent Decree" which found the State lacking in several areas.
 4 One area was the failure to maximize federal matching
 5 reimbursements for mental health services for children covered in
 6 the consent decree.  The auditor reported that although
 7 approximately $3,200,000 in Medicaid reimbursement has been
 8 secured on behalf of the Felix class since fiscal year 1994-1995,
 9 maximization of this funding source has been impeded by long-
10 standing obstacles that the department of health has failed to
11 address.
12      Medicaid provides matching funds to states for health care
13 including mental health services to eligible low-income
14 recipients.  In Hawaii, Medicaid is administered by the med-QUEST
15 division of the department of human services and is monitored by
16 the federal Health Care Financing Administration.  Some of the
17 covered Medicaid services are mental health services the State
18 provides under the Felix decree, and some members of the Felix
19 class are eligible for assistance through either fee-for-service

Page 2                                                     847
                                     H.B. NO.           H.D. 2

 1 Medicaid or QUEST, the State's managed care demonstration
 2 project.  Medicaid or QUEST funding can be used to help offset
 3 the cost of the decree to the extent they overlap with Felix
 4 services and individuals.
 5      The auditor suggested that the department of health take
 6 certain steps to overcome obstacles preventing optimal
 7 utilization of matching federal Medicaid and QUEST
 8 reimbursements.  Two of these steps are:
 9      (1)  To develop service definitions that are comparable to
10           Medicaid definitions of covered services; and
11      (2)  To develop a fee schedule comparable to the fee
12           schedule used for Medicaid and QUEST purposes.
13 For example, definitions used by the department of health do not
14 match Medicaid definitions for similar services.  One further
15 obstacle to maximizing federal reimbursement is that the
16 department of health paid more for mental health assessments
17 performed by contracted private providers than either Medicaid or
18 QUEST, thus creating a disincentive for private providers to bill
19 QUEST even though the QUEST plans were willing to accept claims
20 for reimbursement from these private providers.  Despite the fact
21 that the department of health's current contracts require
22 providers to charge the State rates that do not exceed usual and
23 customary reimbursements for Hawaii, rates actually paid by the

Page 3                                                     847
                                     H.B. NO.           H.D. 2

 1 department continue to exceed Medicaid reimbursement rates.  In
 2 addition, the lack of common definitions and billing codes makes
 3 it difficult for the department of health to bill Medicaid or
 4 QUEST for covered services.
 5      The purpose of this Act is to require the department of
 6 health to develop a fee schedule for the Felix class that
 7 corresponds to Medicaid standards, including comparable service
 8 definitions, billing codes, and reimbursement rates.
 9      SECTION 2.  (a)  No later than August 31, 1999, the
10 department of health, through the department's child and
11 adolescent mental health division, with the assistance and
12 cooperation of the department of human services, shall complete
13 the following tasks:
14      (1)  Develop service definitions for mental health services
15           provided to Felix class children that are comparable to
16           Medicaid definitions of similar covered services; and
17      (2)  Develop a fee schedule and billing codes comparable to
18           the fee schedule and billing codes used for Medicaid
19           and QUEST purposes.
20      (b)  The department of health shall develop the new
21 definitions, billing codes, and fee schedule by August 31, 1999,
22 and shall implement them in the new contracts issued after August
23 31, 2000.

Page 4                                                     847
                                     H.B. NO.           H.D. 2

 1      (c)  The department of health shall submit a report to the
 2 legislature and the governor no later than twenty days prior to
 3 the convening of the regular session of 2001 detailing
 4 information on the effectiveness of and the cost savings, if any,
 5 due to the implementation of the new definitions, billing codes,
 6 and fee schedule.
 7      SECTION 3.  This Act shall take effect upon its approval.