Legislature passes bill helping private hospitals to receive $12.5 million in federal funds

State House and Senate lawmakers have approved a measure that will enable Hawaii’s private hospitals to receive $12.5 million of federal disproportionate share hospital (DSH) funding for the next two fiscal years. Senate Bill 423, approved in final floor sessions Thursday, appropriates $12,291,054 in matching state funds to secure the DSH allowance obtained by Hawaii's Congressional Delegation.

"Hawaii is the only state in the country that does not get automatic disproportionate share hospital payments," said Senator David Ige, Chair of the Senate Health Committee. "We must continue to work closely with our federal delegation, especially Senator Akaka, to ensure we maintain support for Hawaii's private hospitals."

The Medicaid DSH allowance assists hospitals that treat Hawaii's most vulnerable and poverty-stricken people. Without this matching state appropriation, the federal funds cannot be expended to the state. In order to ensure that Hawaii's residents receive continued access to basic health care, Senator David Ige and Representative Ryan Yamane, chairs of their respective Health Committees, made it a priority this legislative session to seek state funding to maximize the availability of federal assistance.

Hawaii hospitals that serve Med-Quest patients lose tens of millions of dollars each year in order to provide healthcare services to low-income patients. DSH payments help offset some of the cost of uncompensated care delivered by hospitals and addresses inadequate reimbursement by Medicaid. These payments are supplementary to the regular reimbursements hospitals receive for treating Medicaid patients.

"Hawaii residents face rising health costs every day, and this bill helps to ensure that hospitals continue to provide care for those in our community who can least afford it, said Rep. Ryan Yamane, chair of the House Health Committee. "Private hospitals depend on this revenue, and I'm very pleased that we were able to find state revenues that allow us to take advantage of millions of federal dollars."

Photos: Rep. Ryan Yamane, chair of the Committee on Health, held a press conference with other lawmakers and hospital officials to announce the passage of SB 423.

UPDATE: The Honolulu Advertiser supports passage of bill and calls for Governor's speedy release of the funds. Editorial 5/12/09.