Report Title:

Hawaii Health Alliance

Description:

Establishes the Hawaii Health Alliance to reduce health care cost increases, provide the widest choice of health care options and plans possible for consumers, and to investigate and implement other measures to control cost increases.

 

 

HOUSE OF REPRESENTATIVES

H.B. NO.

296

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO THE HAWAII HEALTH ALLIANCE.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Through a coordinated set of public-private partnership programs, Hawaii has achieved near universal access to health care coverage for its people. While the achievement of near universal coverage has been a major factor in ensuring that Hawaii's health care costs are among the lowest in the nation, health care costs in Hawaii have increased significantly. These increases threaten Hawaii's economic viability and must be addressed.

The legislature finds that it is necessary to reduce health care cost inflation in Hawaii. The legislature further believes that building upon Hawaii's successful mode of public-private partnership is the best method of achieving a reduction in the rate of the increase of health care costs.

Such a public-private model is contained in the Hawaii health alliance. The quasi-governmental agency is based on the philosophy that public and private efforts will be more effective in controlling health care costs than either sector working alone. For example, many purchasers of health care such as employers, labor organizations, and consumers are currently limited in their ability to effectively negotiate favorable insurance rates because they deal with the purchase of health care coverage individually. By organizing and combining the purchasing power of these private purchasers along with government, the Hawaii health alliance will enable more effective negotiation to achieve the lowest possible health care costs. It is the intention of the legislature that the combination of this purchasing power should not result in a large bureaucracy or add significant administrative costs. The Hawaii health alliance is therefore intended to be a negotiating body rather than a fiscal intermediary. Additionally, public and private joint exploration of further methods to reduce cost increases should be enhanced through an entity such as the Hawaii health alliance.

The purpose of this Act is to establish the Hawaii health alliance as a non-intrusive but effective bargaining agent to reduce health care cost increases in Hawaii, provide the widest choice of health care options and plans possible for Hawaii's consumers, and to investigate and implement other measures to control cost increases.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HAWAII HEALTH ALLIANCE

-1 Definitions. As used in this chapter:

"Board" means the board of directors of the Hawaii health alliance.

"Alliance" means the Hawaii health alliance.

"Employer" means a small business that employs twenty or fewer employees.

-2 Establishment. There is established the Hawaii health alliance, a quasi-public agency, to be placed within the department of health for administrative purposes only, to promote the purchase of cost effective and high quality health care.

-3 Hawaii health alliance powers and duties. The alliance shall have the authority to establish and administer policies and procedures to:

(1) Negotiate premium rates for health plans;

(2) Enhance choice of health plans for purchasers of health care coverage;

(3) Receive and distribute federal and private moneys;

(4) Receive and service complaints regarding the quality of health care services and benefits provided under qualified health plans;

(5) Facilitate the development of cost containment efforts;

(6) Conduct studies, as appropriate, on issues relating to the delivery of health care services; and

(7) Be a liaison with relevant federal and state agencies.

-4 Board of directors. (a) The alliance shall be governed by a board of directors consisting of seven members appointed by the governor as provided in section 26-34.

(b) Each member of the board shall be a current or prospective purchaser of a prepaid health plan through the alliance; provided that:

(1) Two members shall represent private employers whose employees are eligible to purchase prepaid health plans through the alliance for a term of four years; provided that one of the initial appointees serve a two-year term;

(2) Two members shall represent employees of such employers for a term of four years; provided that one of the initial appointees serve a two-year term; and

(3) One member shall represent individual purchasers of prepaid health plans through the alliance for a term of four years; provided that the initial appointee serves a three-year term.

The chair of the Hawaii employer-union health benefits trust fund and the medicaid administrator, or their designated representatives, shall serve as ex-officio members.

(c) Officers of the alliance, including the chairperson, shall be elected by the majority of the board.

(d) Members shall be reimbursed for expenses, including travel expenses, incurred in the performance of official duties.

(e) All members of the board shall be voting members. Quorum shall consist of a majority of all members of the board.

-5 Powers, duties, and functions of the board. The board shall have the following general powers:

(1) Review prepaid health plans as defined in section

393-3(6) submitted by prepaid health care contractors as defined in section 393-3(7);

(2) Negotiate premium rates with prepaid health care contractors;

(3) Prepare and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter not subject to any requirement of law on competitive bidding including the requirements of law on competitive bidding including the requirements of sections 103D-301 through and including 103D-315;

(4) Appoint, not subject to chapter 76, an executive director whose salary shall be determined by the board;

(5) Through its executive director hire, not subject to chapter 76, technical experts and officers, agents and employees, permanent or temporary, as required;

(6) Contract with persons, not subject to chapters 76 and 78, when in the determination of the board, the services to be performed are unique and essential to the execution of the functions of the alliance; provided that no individual contract shall be for a period longer than two years;

(7) To make and alter policies for its organization and internal administration;

(8) To adopt rules in accordance with chapter 91 to effectuate the purposes of this chapter;

(9) Submit an annual financial report to the governor in a form approved by the governor, no later than one hundred twenty days after the completion of the alliance's fiscal year; and

(10) Do any and all things necessary to carry out its purposes and exercise the powers given and granted in this chapter.

-6 Executive director. The chief executive officer of the alliance shall be the executive director who shall be appointed by the board not subject to chapter 76. The board shall set the salary and benefits of the executive director and the executive director shall serve at the pleasure of the board.

-7 Advisory committees. The alliance may appoint advisory committees that may consist of but are not limited to members of one or more of the following fields: physicians and health care providers employers, consumers, finance, commerce and trade, insurance, groups at special risk for health care problems or access limitations, and employee benefits to assist in implementing this chapter.

-8 Participation. (a) All employers who purchase prepaid health plans subject to the provisions of chapter 393 and their employees may purchase health care plans at prices negotiated by the alliance.

(b) The Hawaii employer-union health benefits trust fund and its members may purchase prepaid health care plans at prices negotiated by the alliance.

(c) Medicaid coverage purchased pursuant to chapter 346 shall be purchased from health care plans at prices negotiated by the alliance.

(d) Individuals who are self-employed or who are otherwise not covered by health insurance may purchase prepaid health care plans at prices negotiated by the alliance.

-9 Administration by the alliance. The alliance may adopt, amend, or repeal, pursuant to chapter 91, such rules as may be necessary or suitable for the proper administration and enforcement of this chapter.

-10 Immunity and limitation on liability. There shall be no liability on the part of, and no cause of action of any nature shall arise against, the State, the state's officers and employees, the alliance, or the alliance's board, agents, or employees for any action taken by them in the performance of their powers and duties under this chapter. Notwithstanding chapters 661 and 662 or any other law to the contrary, nothing in this chapter shall create an obligation, debt, claim, cause of action, claim for relief, charge, or any other liability of any kind whatsoever in favor of any person or entity, without regard to whether that person or entity receives any benefits under this chapter, against the State, the state's officers and employees, the alliance, or the alliances' board, agents, or employees. Nothing in this chapter shall be construed as authorizing any claim against the alliance in excess of any note, loan, liability, or other specific indebtedness or obligation incurred by the alliance. Nothing in this section shall be construed as limiting or negating any other law conferring immunity on or limiting the liability of the State, the state's officers and employees, the alliance, or the alliance's board, agents, or employees.

-11 Hawaii health alliance special fund. (a) There is established in the state treasury the Hawaii health alliance special fund to be administered by the board.

(b) This fund shall be used to pay the costs of administering the obligations under this chapter.

(c) The board may assess a portion of the premiums for every health plan, whose rates were negotiated by the alliance, which shall be collected pursuant to the rules adopted under chapter 91 and which shall be deposited into the special fund established by this section. Such assessment shall not exceed       per cent of the negotiated premium.

(d) Moneys in the Hawaii health alliance special fund shall not revert to the general fund.

(e) The board shall report annually to the legislature no later than twenty days prior to the convening of each regular session detailing the fund administration and expenditures."

SECTION 3. The governor shall submit reports to the legislature no later than sixty days prior to the regular session of 2004, outlining the statutory and administrative measures necessary to fully and effectively incorporate coverage under the Prepaid Health Care Act, and to allow the following programs to participate in the Hawaii health alliance:

(1) Medicaid;

(2) The Hawaii employer-union health benefits trust fund; and

(3) The board of trustees of the Hawaii long-term care financing program.

SECTION 4. The governor shall submit a report to the legislature no later than twenty days prior to the regular session of 2005, outlining the statutory and administrative changes necessary to combine the health portions of workers' compensation insurance and automobile insurance with the Hawaii health alliance.

SECTION 5. The Hawaii health alliance shall submit a report to the legislature no later than twenty days prior to the regular sessions of 2004 and 2005, outlining the effects of any federal health care legislation on Hawaii and the statutory and administrative changes needed for Hawaii to comply with any such legislation.

SECTION 6. The alliance may seek waivers of federal law, rule, or regulation necessary to implement the provisions of this Act.

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $150,000 or so much thereof as may be necessary for fiscal year 2003-2004 and the sum of $150,000 or so much thereof as may be necessary for fiscal year 2004-2005 to carry out the purposes of this Act, including the hiring of necessary staff.

The sums appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 8. This Act shall take effect on July 1, 2003.

 

INTRODUCED BY:

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