STAND. COM. REP. NO. 1569

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.C.R. No. 106
                                     




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

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.C.R. No. 106 entitled: 

     "HOUSE CONCURRENT RESOLUTION REQUESTING THE HAWAII PATIENT
     BILL OF RIGHTS AND RESPONSIBILITIES TASK FORCE TO MAKE A
     THOROUGH STUDY OF THE ISSUES RELATING TO THE USE OF THE TERM
     "MEDICAL NECESSITY" TO DETERMINE THE MOST APPROPRIATE
     DEFINITION OF "MEDICAL NECESSITY," OR TO DEVELOP NEW TERMS
     TO BETTER RESOLVE THE ISSUES EXAMINED,"

begs leave to report as follows:

     The purpose of this concurrent resolution is to request the
Hawaii Patient Bill of Rights and Responsibilities Task Force to
study and define the term "medical necessity".

     Testimony in support of this measure was received from the
Department of Health and the Hawaii Medical Service Association.
The Insurance Commissioner, on behalf of the Department of
Commerce and Consumer Affairs, testified to a willingness to
participate in the study.  The Hawaii Insurers Council (HIC)
provided comments, seeking clarification on whether the study of
the term "medical necessity" is restricted to prepaid health care
statutes, as opposed to workers' compensation, automobile, and
liability statutes.

     Addressing the issue raised by HIC, your Committee
emphasizes that this study is to evaluate issues relating to the
term "medical necessity" in the context of prepaid health care
insurance, and not workers' compensation, automobile, and

 
 
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                                 Page 2

 
liability insurance that is the domain of property and casualty
insurers.

     Your Committee finds that this study is much needed to
provide consistency and clarification for the many complex issues
surrounding the definition and application of a term which is
crucial both to quality of care and health care costs for
consumers.

     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 concurs with the intent and purpose
of H.C.R. No. 106, and recommends that it be referred to the
Committee on Finance.

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



                                   ______________________________
                                   RON MENOR, Chair