HOUSE OF REPRESENTATIVES

H.B. NO.

2630

THIRTIETH LEGISLATURE, 2020

H.D. 2

STATE OF HAWAII

S.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO THE TRANSITION OF THE OAHU REGIONAL HEALTH CARE SYSTEM FROM THE HAWAII HEALTH SYSTEMS CORPORATION INTO THE DEPARTMENT OF HEALTH.

 

 

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

 


PART I

SECTION 1. The legislature finds that the Hawaii health systems corporation is comprised of five semi-autonomous health care regions within the State, including east Hawaii, west Hawaii, Kauai, Oahu, and Maui. The Maui region no longer operates any health care facilities.

The legislature further finds that the Oahu region is unique and distinguishable from the other regions due to the logistical complexities of the Oahu regional health care system facilities and the limited but crucial nature of the services these facilities, Leahi hospital and Maluhia, currently provide. Because the Oahu facilities almost exclusively serve long-term care and medicaid patients, groups traditionally underserved by private facilities because of the high cost of their care, the Oahu region's long-term care operations are run more as a safety-net social service and, compared to the other regions, have less opportunity for additional revenue generation.

While the need for long-term care beds on Oahu has decreased in recent years, a study completed by the department of business, economic development, and tourism has projected that the population aged sixty-five and older will grow by one hundred forty-eight per cent over the next twenty-five years. On Oahu, this translates to an estimated shortfall of one thousand one hundred long-term care beds in the next five to ten years alone. Thus, despite the costs of long-term care, it is vital that state facilities continue to operate to ensure that beds remain available for our aging population.

Similar to the Oahu region, the department of health operates the Hawaii state hospital, a facility that does not generate revenue, but is nonetheless necessary to provide care and treatment for mentally ill patients in Hawaii. In recent years, the Hawaii state hospital has experienced a challenge in providing sufficient bed space for admitted patients. As of September 2019, two hundred twenty patients well over the maximum capacity of two hundred two occupied beds at the Hawaii state hospital. To meet its needs, the Hawaii state hospital was also required to contract with Kahi Mohala, a privately-run facility, to care for an additional forty-six patients.

Beyond the Hawaii state hospital, the department of health has also been charged with addressing the significant gap in the behavioral health care system between acute psychiatric care facilities and low acuity residential treatment. Data collected in the State estimates that more than half of all individuals experiencing a mental health crisis, or fifty-four per cent, have needs that align better with services delivered within a subacute level of care facility rather than an emergency room.

The legislature finds that Act 90, Session Laws of Hawaii 2019, established the involuntary hospitalization task force and Act 263, Session Laws of Hawaii 2019, established a working group to evaluate current behavioral health care and related systems, including existing resources, systems gaps, and identification of action steps that would be taken to improve the overall system of care. The findings from these initiatives highlight the need in Hawaii for a coordinated network of stabilization beds that will allow triage, clinical assessment, and recommendation for the next level of care for those struggling with substance use, mental health conditions, and homelessness.

The National Coalition for the Homeless has found that sixty-four per cent of homeless individuals are dependent on alcohol or other substances. In Hawaii, the Oahu homeless point in time count reported that 36.4 per cent of homeless single adults suffer from some type of mental illness. The intersection of homelessness and behavioral health conditions are a crisis in Hawaii, which contributes to Hawaii having the second highest rate of homelessness in the nation. Unfortunately, there is currently no coordinated system of stabilization from the streets that assesses for and links to the next level of clinical care.

The legislature additionally finds that the current options for those needing stabilization from substance use, mental health, and homelessness are overburdened and inadequate, and emergency facilities throughout the State have experienced substantial increases in psychiatric emergency admissions, which has resulted in overcrowding and unsafe environments for patients and medical staff.

The legislature also finds that comprehensive crisis response and stabilization services are crucial elements of the continuum of care. Reducing unnecessary transportation to emergency departments and appropriately placing clients in more suitable levels of care will improve outcomes for consumers, reduce inpatient hospital stays, and facilitate access to other behavioral health services.

Subacute residential stabilization services have been a missing component of a comprehensive behavioral health continuum of care, which would bridge the gap between acute hospitalization and lower level residential and community resources. Many individuals who are taken to the emergency room on a MH-1, or for emergency examination and hospitalization, are often not acute enough in their illness to warrant psychiatric hospitalization. On the other hand, their symptomology is too acute for them to be admitted to a group home, shelter, or other existing low acuity residential programs, or, if they are admitted, they are often unsuccessful in those environments. More often than not, they fail because they have not had time to stabilize in an environment where they can be closely monitored. This lack of post-acute care contributes to the poor outcomes of both acute behavioral health inpatient and community-based services because many individuals are not appropriate for either level, but fall somewhere in the middle.

The legislature further finds that there exists state facilities that have underutilized space that could accommodate these services with minimal effort and adjustments and reduce certain burdens and barriers. Therefore, assertive efforts should be undertaken to make sure of these resources and to organize them in a way that is beneficial to the State.

Through discussions with the Oahu region, it was determined that some of the Oahu region's health care facilities, particularly at Leahi hospital, are currently underutilized and have the potential to be re-purposed for other important health care and social service needs.

The legislature further finds that, while statutorily tied to the Hawaii health systems corporation, the Oahu region operates mostly autonomously and its functions including target population are unique from those of the other regional health care systems. As such, there is little necessity to keep the Oahu regional health care system a part of the Hawaii health systems corporation. With proper planning and implementation, the Oahu regional health care system could be strategically assimilated into the department of health and its facilities could be used, in addition to long-term care, to help alleviate the need for subacute residential mental health stabilization and other subacute care services.

The purpose of this Act is to:

(1) Commence the transfer of the Oahu regional health care system in its entirety from the Hawaii health systems corporation to the department of health, beginning with the transfer of the Oahu regional health care system's budget and position count into the department of health; and

(2) Enable the Oahu regional health care system, department of health, Hawaii health systems corporation, and other state agencies to manage and implement the processes required to effectuate the completion of such transition.

PART II

SECTION 2. Section 323F-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The corporate organization shall be divided into [five] four regional systems, as follows:

[(1) The Oahu regional health care system;

(2)] (1) The Kauai regional health care system;

[(3)] (2) The Maui regional health care system;

[(4)] (3) The east Hawaii regional health care system, comprising the Puna district, north Hilo district, south Hilo district, Hamakua district, and Kau district; and

[(5)] (4) The west Hawaii regional health care system, comprising the north Kohala district, south Kohala district, north Kona district, and south Kona district;

and shall be identified as regional systems I, II, III, and IV, [and V,] respectively."

SECTION 3. Section 323F-3, Hawaii Revised Statutes, is amended to read as follows:

"323F-3 Corporation board. (a) The corporation shall be governed by an eighteen-member board of directors that shall carry out the duties and responsibilities of the corporation other than those duties and responsibilities relating to the establishment of any captive insurance company pursuant to section 323F-7(c)(20) and the operation thereof.

(b) The members of the corporation board shall be appointed as follows:

(1) The director of health as an ex officio, voting member;

(2) The [five] four regional chief executive officers as ex officio, nonvoting members;

(3) Three members who reside in the county of Maui, two of whom shall be appointed by the Maui regional system board and one of whom shall be appointed by the governor, all of whom shall serve as voting members;

(4) Two members who reside in the eastern section of the county of Hawaii, one of whom shall be appointed by the East Hawaii regional system board and one of whom shall be appointed by the governor, both of whom shall serve as voting members;

(5) Two members who reside in the western section of the county of Hawaii, one of whom shall be appointed by the West Hawaii regional system board and one of whom shall be appointed by the governor, both of whom shall serve as voting members;

(6) Two members who reside on the island of Kauai, one of whom shall be appointed by the Kauai regional system board and one of whom shall be appointed by the governor, both of whom shall serve as voting members;

(7) Two members who reside on the island of Oahu, one of whom shall be appointed by the Oahu regional system board and one of whom shall be appointed by the governor, both of whom shall serve as voting members; and

(8) One member who shall be appointed by the governor and serve as an at-large voting member.

The appointed board members who reside in the county of Maui, eastern section of the county of Hawaii, western section of the county of Hawaii, on the island of Kauai, and on the island of Oahu shall each serve for a term of four years; provided that the terms of the initial appointments of the members who are appointed by their respective regional system boards shall be as follows: one of the initial members from the county of Maui shall be appointed to serve a term of two years and the other member shall be appointed to serve a term of four years; the initial member from East Hawaii shall be appointed to serve a term of two years; the initial member from West Hawaii shall be appointed to serve a term of four years; the initial member from the island of Kauai shall be appointed to serve a term of two years; and the initial member from the island of Oahu shall be appointed to serve a term of four years; and provided further that the terms of the initial appointments of the members who are appointed by the governor shall be four years. The at-large member appointed by the governor shall serve a term of two years.

Any vacancy shall be filled in the same manner provided for the original appointments. The corporation board shall elect its own chair from among its members. Appointments to the corporation board shall be as representative as possible of the system's stakeholders as outlined in this subsection. The board member appointments shall strive to create a board that includes expertise in the fields of medicine, finance, health care administration, government affairs, human resources, and law.

(c) The selection, appointment, and confirmation of any nominee shall be based on ensuring that board members have diverse and beneficial perspectives and experiences and that they include, to the extent possible, representatives of the medical, business, management, law, finance, and health sectors, and patients or consumers. Members of the board shall serve without compensation but may be reimbursed for actual expenses, including travel expenses incurred in the performance of their duties.

(d) Any member of the board may be removed for cause by vote of a two-thirds majority of the board's members then in office. For purposes of this section, cause shall include without limitation:

(1) Malfeasance in office;

(2) Failure to attend regularly called meetings;

(3) Sentencing for conviction of a felony, to the extent allowed by section 831-2; or

(4) Any other cause that may render a member incapable or unfit to discharge the duties required under this chapter.

Filing nomination papers for elective office or appointment to elective office, or conviction of a felony consistent with section 831-3.1, shall automatically and immediately disqualify a board member from office.

(e) With regard to all corporation board matters concerning the Oahu regional health care system, the director of health shall have sole decision-making authority over those matters, commencing on June 30, 2020, and continuing until the transition of the Oahu regional health care system into the department of health is complete. Upon completion of the transition, the corporation board shall have no legal relationship with the Oahu regional health care system or its facilities."

SECTION 4. Section 323F-7.6, Hawaii Revised Statutes, is amended to read as follows:

"[[]323F-7.6[]] Transition of Hawaii health systems regional system or health facility to a new entity. (a) Notwithstanding any other law to the contrary, including but not limited to section 27-1 and chapter 171, any of the regional systems or individual facilities of the Hawaii health systems corporation is hereby authorized to transition into a new legal entity in any form recognized under the laws of the State, including but not limited to:

(1) A nonprofit corporation;

(2) A for-profit corporation;

(3) A municipal facility;

(4) A public benefit corporation; [or]

(5) A division or branch under a state executive department; or

[(5)] (6) Any two or more of the entities in paragraphs (1) through [(4).] (5).

A transition shall occur through the sale, lease, or transfer of all or substantially all of the assets of the facility or regional system, except for real property, which shall only be transferred by lease[.], unless such transfer is effectuated under paragraph (5), in which case real property shall transition to the executive department. Any transition shall comply with chapter 323D.

(b) A transition shall only occur upon approval of the appropriate regional system board in the case of a regional system or individual facility transition, or upon approval of the regional system boards and the corporation in the case of the transition of the entire corporation. Any transition shall be subject to legal review by the attorney general who shall approve the transition if satisfied that the transition conforms to all applicable laws, subject to the review of the director of the department of budget and finance who shall approve the transition if it conforms to all applicable financing procedures, and subject to the governor's approval. In addition the transition shall be subject to the following terms and conditions:

(1) All proceeds from the sale, lease, or transfer of assets shall be used for health care services in the respective regional system or facility, except that real property shall only be transferred by lease[;], unless such transfer is effectuated under subsection (a)(5), in which case real property shall transition to the executive department;

(2) Any and all liabilities of a regional system or facility transitioning into a new entity that were transferred to the Hawaii health systems corporation upon its creation by Act 262, Session Laws of Hawaii 1996, and all liabilities of the regional system or facility related to collective bargaining contracts negotiated by the State, shall become the responsibility of the State; and

(3) During the period of transition:

(A) The State shall continue to fund the provision of health care services provided for by the regional system or individual facility; and

(B) All applicable provisions of this chapter shall continue to apply.

Upon the completion of the transition of all the facilities in a regional system to a new entity, the regional system board for that regional system shall terminate; provided that if not all of a regional system's facilities are transitioned to a new entity, the existing regional system board shall not terminate but shall continue to retain jurisdiction over those facilities remaining in the regional system."

PART III

SECTION 5. (a) The transfer of the Oahu regional health care system to the department of health shall commence with the transfer of the budget and position count associated with the Oahu region as follows:

(1) On June 30, 2020, the budget of the Oahu regional health care system shall be transferred from the Hawaii health systems corporation to the department of health; provided that:

(A) The Oahu regional health care system's budget codes and all related allocated funds of the Oahu region shall be reflected in the state budget and all other related tables and documents under the program code HTH   ; and

(B) The program code HTH    shall be known as the behavioral and elder care facilities division within the department of health's behavioral health administration. The organizational structure of the Oahu regional health care system shall remain unchanged, unless modified and approved by the transition working group identified in this Act, and as approved by the conditions established in this part or as required by law; and

(2) On June 30, 2020, the total position count and class specifications of the Oahu region shall be transferred in their entirety to the department of health and associated with HTH   ; provided that:

(A) All employees of the Oahu region who occupy civil service positions shall be transferred to the department of health by this Act and retain their civil service status, whether permanent or temporary, and shall maintain their respective functions as reflected in their current position descriptions during the transition period; provided that any changes determined necessary by the working group established pursuant to this Act shall follow standard union consultation process prior to implementation;

(B) Employees shall be transferred without loss of salary; seniority, except as prescribed by applicable collective bargaining agreements; retention points; prior service credit; any vacation and sick leave credits previously earned; and other rights, benefits, and privileges, in accordance with state employment laws;

(C) The personnel structure of the Oahu regional health care system shall remain unchanged, unless modified and approved by the working group and as approved by the conditions established pursuant to this Act;

(D) Any employee who, prior to this Act, is exempt from civil service or collective bargaining and is transferred as a consequence of this Act shall be transferred without loss of salary and shall not suffer any loss of prior service credit, contractual rights, vacation or sick leave credits previously earned, or other employee benefits or privileges and shall be entitled to remain employed in the employee's current position for a period of no less than one year after the transition of the Oahu regional health care system into the department of health is complete;

(E) The wages, hours, and other conditions of employment shall be negotiated or consulted, as applicable, with the respective exclusive representative of the affected employees, in accordance with chapter 89, Hawaii Revised Statutes; and

(F) The rights, benefits, and privileges currently enjoyed by employees, including those rights, benefits, and privileges under chapters 76, 78, 87A, 88, and 89, Hawaii Revised Statutes, shall not be impaired or diminished as a result of these employees being transitioned to the department of health pursuant to this Act. The transition to the department of health shall not result in any break in service for the affected employees. The rights, benefits, and privileges currently enjoyed by employees shall be maintained under their existing collective bargaining or other agreements and any successor agreement.

(b) Upon effectuation of subsection (a), the Oahu regional board shall be placed within the department of health pursuant to section 26-35, Hawaii Revised Statutes, for the purposes of facilitating the transition of the Oahu region into the department of health as part of the working group established pursuant this Act and to effectuate the assignment of all contracts and agreements in which the Oahu region is a party to the department of health.

SECTION 6. (a) There is established a working group of the Oahu regional health care system and department of health to develop, evaluate, and implement any additional steps necessary to complete the transition of the Oahu regional health care system into the department of health.

(b) The working group shall consist of the following members:

(1) The director of health, or the director's designee, who shall serve as co-chair, and who, along with the chair of the Oahu regional health care system, or the chair's designee, shall have final authority over transfer activities to be implemented by the working group;

(2) The chair of the Oahu regional health care system board, or the chair's designee, who shall serve as co-chair, and who, along with the director of health, or the director's designee, shall have final authority over transfer activities to be implemented by the working group;

(3) The chief executive officer of the Oahu regional health care system, or the chief executive officer's designee;

(4) One or more department of health staff members as deemed necessary by the director of health, or the directors designee; and

(5) One or more Oahu regional health care system staff members as deemed necessary by the chief executive officer of the Oahu regional health care system, or the chief executive officer's designee.

(c) In addition, the working group shall include the following members, who shall serve in a consultative capacity:

(1) One representative from the behavioral health administration of the department of health;

(2) One representative from the department of human resources development;

(3) One representative from the department of accounting and general services;

(4) The chair of the Hawaii health systems corporation board, or the chair's designee;

(5) One representative from the Hawaii health systems corporation human resources department;

(6) One representative from the Hawaii health systems corporation finance department;

(7) One representative from the state procurement office;

(8) One representative from the Hawaii Government Employees Association;

(9) One representative from the United Public Workers Union; and

(10) Others as recommended and invited by the co-chairs.

(d) In carrying out its purpose, the working group shall develop a transfer framework to govern and manage the additional steps necessary to complete the transfer of the Oahu region into the department of health. The transfer framework shall include but not be limited to the following steps:

(1) Identification and preparation of proposed additional legislation to address any matters not covered by this Act that may be necessary to complete the transfer of the Oahu region into the department of health;

(2) Identification of all real property, appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other property made, used, acquired, or held by the Oahu regional health care system and effectuate the transfer of the same to the department of health; provided that in all cases applicable and appropriate, section 26-35, Hawaii Revised Statutes, shall apply;

(3) Identification of all debts and other liabilities that will remain with the Hawaii health systems corporation and transfer any remaining debts and liabilities to the department of health; provided that in all cases applicable and appropriate, section 26-35, Hawaii Revised Statutes, shall apply;

(4) Identification of all contractual arrangements and obligations of the Oahu region, including but not limited to those related to personal service contracts, vendor contracts, and capital improvement projects; provided that in all cases applicable and appropriate, section 26-35, Hawaii Revised Statutes, shall apply;

(5) Development and implementation of any and all policies and procedures necessary to ensure that the facilities within the Oahu regional health care system remain compliant with all federal, state, and local laws and regulations; provided that in all cases applicable and appropriate, section 26-35, Hawaii Revised Statutes, shall apply; and

(6) Development and implementation of procedures to extricate the Oahu region from system-wide services secured or provided by the Hawaii health systems corporation or enable the Oahu region to continue to utilize such services on a temporary or permanent basis through interagency agreement; provided that in all cases applicable and appropriate, section 26-35, Hawaii Revised Statutes, shall apply.

(e) Members of the working group shall serve without compensation but shall be reimbursed for reasonable expenses necessary for the performance of their duties, including travel expenses. No member of the working group shall be subject to chapter 84, Hawaii Revised Statutes, solely because of the member's participation in the working group.

(f) The working group shall submit an interim report to the legislature no later than twenty days prior to the convening of the regular session of 2021 that outlines all components of the transition that have been effectuated to date and any legislative action needed to complete the transfer pursuant to this Act.

(g) The working group shall be dissolved on June 30, 2022, or upon completion of the transition of the Oahu regional health care system into the department of health, whichever is later. Prior to its dissolution, the working group shall submit a final report to the legislature that documents the completion of the transfer and dissolution of the Oahu regional health care system.

SECTION 7. All transition actions, with the exception of those covered under section 5(a) of this Act, shall be subject to the following conditions:

(1) The attorney general shall approve the legality and form of any material transition actions created by the working group prior to implementation, and the director of finance shall evaluate and approve any expenditure of public funds determined to be in accordance with the budget laws and controls in force;

(2) Liabilities of the Oahu regional health care system that were transferred to the Hawaii health systems corporation upon its creation by Act 262, Session Laws of Hawaii 1996, or to the Oahu regional health care system upon its establishment by Act 290, Session Laws of Hawaii 2007, and all other contractual liabilities of the Oahu regional health care system, including those related to collective bargaining contracts negotiated by the State in existence at the time they are transferred to the department of health, shall become the responsibility of the State; and

(3) In all cases applicable and appropriate, section 26‑35, Hawaii Revised Statutes, shall apply to questions of legal authority.

PART IV

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2050; provided that part II of this Act shall take effect on January 1, 2050.


 


 

Report Title:

Hawaii Health Systems Corporation; Oahu Region; Department of Health; Transition; Working Group

 

Description:

Commence the transfer of the Oahu regional health care system in its entirety from the Hawaii health systems corporation to the department of health, beginning with the transfer of the Oahu regional health care system's budget and position count into the department of health. Enable the Oahu regional health care system, department of health, Hawaii health systems corporation, and other state agencies to manage and implement the processes required to effectuate the completion of such transition. Takes effect on 7/1/2050. Part II takes effect on 1/1/2050. (SD1)

 

 

 

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