Informing the Legislature that on May 30, 2025, the Governor signed the following bill into law: HB1179 HD1 SD2 CD1 (ACT 144).

HB1179 (Act 144) establishes a state licensing process for rural emergency hospitals in Hawaii, enabling rural hospitals to adopt a federal designation focused on emergency, observation, and outpatient services (including lab and imaging) while discontinuing underutilized inpatient care. The bill ensures Medicaid reimbursement policies will continue for hospitals transitioning from critical access hospital status to this new designation. It allows hospitals to access federal Medicare reimbursement policies that provide a fixed annual payment of about $3.2 million and higher outpatient rates without requiring patients to pay additional fees. This law directly affects rural hospitals like Lanai Community Hospital, helping them redirect resources to high-demand services such as long-term care and skilled nursing.