(a) The department shall adopt rules under chapter 91 concerning payment to providers of medical care. The department shall determine the rates of payment due to all providers of medical care, and pay such amounts in accordance with the requirements of the appropriations act and the Social Security Act, as amended. Payments to critical access hospitals for services rendered to medicaid beneficiaries shall be calculated on a cost basis using medicare reasonable cost principles.
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Terms Used In Hawaii Revised Statutes 346-59

  • Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
  • Contract: A legal written agreement that becomes binding when signed.
  • Department: means the department of human services. See Hawaii Revised Statutes 346-1
  • Director: means the director of human services. See Hawaii Revised Statutes 346-1
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • Medical care: means all kinds of medical care, psychiatric care, dental care, and maternity care, including surgical care, hospital care, eye care (which includes optical appliances), materials, supplies, and all other appliances used in the care, treatment and rehabilitation of patients, and hospitalization. See Hawaii Revised Statutes 346-1
  • Provider: means any person or public or private institution, agency or business concern authorized by the department to provide health care, service or supplies to beneficiaries of medical assistance. See Hawaii Revised Statutes 346-1
  • Public assistance: means financial assistance to or for the benefit of persons whom the department has determined to be without sufficient means of support to maintain a standard consistent with this chapter, payments to or on behalf of such persons for medical care, and social service payments as described under the Social Security Act. See Hawaii Revised Statutes 346-1
  • Recipient: means the person for whose use and benefit services are rendered or a grant of public assistance is made. See Hawaii Revised Statutes 346-1
(b) Rates of payment to providers of medical care who are individual practitioners, including doctors of medicine, dentists, podiatrists, psychologists, osteopaths, optometrists, and other individuals providing services, shall be based upon the Hawaii medicaid fee schedule. The amounts paid shall not exceed the maximum permitted to be paid individual practitioners or other individuals under federal law and regulation, the medicare fee schedule for the current year, the state limits as provided in the appropriation act, or the provider‘s billed amount.

The appropriation act shall indicate the percentage of the medicare fee schedule for the year 2000 to be used as the basis for establishing the Hawaii medicaid fee schedule. For any subsequent adjustments to the fee schedule, the legislature shall specify the extent of the adjustment in the appropriation act.

(c) In establishing the payment rates for other noninstitutional items and services, the rates shall not exceed the current medicare payment, the state limits as provided in the appropriation act, the rate determined by the department, or the provider’s billed amount.
(d) Payments to health maintenance organizations and prepaid health plans with which the department executes risk contracts for the provision of medical care to eligible public assistance recipients may be made on a prepaid basis. The rate of payment per participating recipient shall be fixed by contract, as determined by the department and the health maintenance organization or the prepaid health plan, but shall not exceed the maximum permitted by federal rules and shall be less than the federal maximum when funds appropriated by the legislature for such contracts require a lesser rate. For purposes of this subsection, “health maintenance organizations” are entities approved as such, and “prepaid health plans” are entities designated as such by the Department of Health and Human Services; and “risk” means the possibility that the health maintenance organization or the prepaid health plan may incur a loss because the cost of providing services may exceed the payments made by the department for services covered under the contract.
(e) The department shall prepare each biennial budget request for a medical care appropriation based upon the most current Hawaii medicaid fee schedule available at the time the request is prepared.

The director shall submit a report to the legislature on or before January 1 of each year indicating an estimate of the amount of money required to be appropriated to pay providers at the maximum rates permitted by federal and state rules in the upcoming fiscal year.

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