Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 1452
                                     H.D. 2

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Consumer Protection and Commerce, to which
was referred S.B. No. 1452, H.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to implement the recommendations
of the Patient Rights and Responsibilities Task Force (Task
Force) that was established under Act 178, Session Laws of Hawaii
1998, to review and strengthen various laws providing protection
of patients.

     Your Committee received testimony strongly supporting this
bill from the Insurance Commissioner of the Department of
Commerce and Consumer Affairs.  Many members of the Task Force
also submitted testimony supporting passage of this bill,
including the Hawaii Medical Association, Healthcare Association,
Hawaii Medical Services Association, Hawai'i Nurses Association,
Hawaii Coalition for Health, Kaiser Permanente, AARP and the
Chair of the Access to Services Task Force subcommittee.  Queen's
Health Management (QHM), a recently appointed member of the Task
Force, offered comments on the bill.

     State Farm, Hawaii Insurers Council opposed provisions
amending the motor vehicle insurance laws to include three new
definitions of "emergency medical condition," "emergency
services," and "stabilization."  Hawaii Emergency Physicians
Associated Inc. supported inclusion of these definitions.

                                 STAND. COM. REP. NO. 1403
                                 Page 2

     AARP commended the Patients Bill of Rights and
Responsibilities Act, Act 178, Session Laws of Hawaii 1998 (Act
178), as farsighted legislation showing that Hawaii was
determined to avoid the many problems that health care consumers
in health maintenance organizations have been subject to in other
states.  AARP stated that this bill would remedy deficiencies in
Act 178, and praised the bill as depending, not on the general
fund, but upon a health insurance revolving fund derived from
health plans.

     HMSA testified that although not all members of the Task
Force were in unanimous support of every aspect of the bill, all
members had met together on February 26 and agreed to support the
original Task Force bill, S.B. No. 1452, in the interest of
advancing the Task Force's work product and continuing its
progress on unresolved issues.

     QHM commented that the health plan members of the Task Force
had expressed particular concern about the external
administrative review process, and had proposed alternatives.
QHM stated that there were additional concerns about the scope of
review under the external administrative review process,
standards for review, payment of attorney's fees, and the benefit
determination process.  However, it was the consensus of the Task
Force that the best interest of patients in Hawaii was of primary
and overriding concern, and that the Task Force would reconvene
after session to fully explore the external independent review
processes and any other issues regarding the review process.

     Upon consideration of the testimony, your Committee has
amended this measure by replacing its contents with that of S.B.
No. 1452 but deleting the amendments to the motor vehicle
insurance law in S.B. No. 1452, which were not consistent with
legislative intent in establishing the Task Force.

     In addition, your Committee has added provisions requiring
the Task Force to submit to the Legislature, before the 2000
legislative session, proposed legislation concerning issues left
unresolved by this bill.

     Your Committee expresses its appreciation to the Task Force
for its extraordinary efforts on behalf of Hawaii's consumers,
and requests that the Task Force continue its exemplary work by
examining the external appeals process, and any other unresolved

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and

                                 STAND. COM. REP. NO. 1403
                                 Page 3

purpose of S.B. No. 1452, H.D. 1, as amended herein, and
recommends that it be referred to the Committee on Finance, in
the form attached hereto as S.B. No. 1452, H.D. 2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,

                                   RON MENOR, Chair