REPORT TITLE:
QUEST


DESCRIPTION:
Authorizes the department of human services to establish a safety
net health plan program as a means to distribute QUEST funds.
(HB544 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        544
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO SAFETY NET HEALTH PLANS. 


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

 1      SECTION 1.  The legislature finds that Medicaid is the most
 
 2 important insurer of the nation's low-income population and the
 
 3 most important source of revenue for community health centers,
 
 4 hospitals, and other safety net health care providers serving the
 
 5 medically indigent population.  Safety net providers have the
 
 6 administrative expertise to meet federal and state requirements
 
 7 to serve Medicaid patients and to receive Medicaid reimbursement.
 
 8 Safety net providers also have a myriad of additional services
 
 9 appropriate to culturally sensitive care in Hawaii's multi-ethnic
 
10 population, including outreach community services to enable a
 
11 client to access case management services, transportation
 
12 services, and health education programs.
 
13      The legislature further finds that Medicaid is in the
 
14 process of transforming from a fee-for-service arrangement to a
 
15 managed care system, such as Hawaii's QUEST program.  The
 
16 legislature further finds that managed care for QUEST may present
 
17 serious financial problems to safety net providers, who would
 
18 have to operate under a capitated rate structure.  As a possible
 
19 solution, safety net providers have organized their own managed
 
20 care plans, known as "safety net health plans."  In Hawaii,
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 safety net health plans would be able to accept Medicaid
 
 2 capitation rates while maintaining their financial viability.
 
 3      The legislature further finds that there are no state or
 
 4 county clinics in Hawaii to provide primary care for the
 
 5 medically indigent, nor are there free clinics to serve a
 
 6 substantial number of charity patients.  An estimated ten per
 
 7 cent of the State's population is uninsured.  The legislature
 
 8 further finds that the State's economy is severely impacting the
 
 9 solvency of the State's safety net providers, resulting in a
 
10 reduced ability to provide medical services.
 
11      The legislature further finds that it is incumbent upon the
 
12 State to assure adequate reimbursement for safety net providers
 
13 to continue to furnish medical services to the sickest and the
 
14 poorest of the State's population.
 
15      The purpose of this Act is to establish a safety net health
 
16 plan program for the distribution of QUEST funds.
 
17      SECTION 2.  Chapter 346, Hawaii Revised Statutes, is amended
 
18 by adding a new section to part I to be appropriately designated
 
19 and to read as follows:
 
20      "§346-    Safety net health plan program.  (a)  There is
 
21 established a safety net health plan program to be administered
 
22 by the department.  The program may distribute QUEST funds in
 
23 accordance with this section to one or more safety net health
 
24 plans established under subsection (b) or (c).
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (b)  A health maintenance organization under chapter 432D
 
 2 may file with the department for approval as a safety net health
 
 3 plan, if the health maintenance organization:
 
 4      (1)  Is owned or controlled by a federally qualified health
 
 5           center, as defined in Title XIX of the Social Security
 
 6           Act; or
 
 7      (2)  Is owned or controlled by a public or private nonprofit
 
 8           organization or a mutual benefit society under article
 
 9           1 of chapter 432 that has:
 
10           (A)  A membership of not less than fifty per cent with
 
11                incomes below two hundred per cent of the current
 
12                federal income poverty level;
 
13           (B)  Not less than twenty five per cent of all of its
 
14                providers that are safety net providers;
 
15           (C)  Not less than fifty per cent of its providers on
 
16                contract with its safety net health plan that are
 
17                safety net providers;
 
18           (D)  Contracts with all federally qualified health
 
19                centers; and
 
20           (E)  Contracts with service area hospitals that have a
 
21                disproportionate share of medically indigent
 
22                patients;
 

 
 
 
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 1      (3)  Pays a capitation or fee-for-service rate to network
 
 2           providers that is sufficient to cover the costs of
 
 3           providing the services;
 
 4      (4)  Places not less than one fifth of one per cent of its
 
 5           annual revenues into the community to strengthen and
 
 6           build services and activities that facilitate the
 
 7           health and well-being of its low-income patients and
 
 8           the community it serves;
 
 9      (5)  Provides the following ancillary services, including:
 
10           (A)  Culturally sensitive care that is responsive to
 
11                the diverse ethnic and cultural make-up of
 
12                patients being served;
 
13           (B)  Outreach community programs to serve those without
 
14                access to regular health care;
 
15           (C)  Social and medical case management;
 
16           (D)  Translation;
 
17           (E)  Transportation;
 
18           (F)  Health education;
 
19           (G)  Assistance with applying for eligibility;
 
20           (H)  Home visits; and
 
21           (I)  Referral for information and follow-up on the
 
22                referrals;
 
23           and
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (6)  Files annually with the insurance commissioner evidence
 
 2           of the requirements of this subsection.
 
 3      (c)  A hospital having a disproportionate share of patients
 
 4 who are medically indigent, or a medical care provider with a
 
 5 mission statement and demonstrated ability to provide health care
 
 6 and related services regardless of the patient's ability to pay,
 
 7 may file with the department for approval as a safety net health
 
 8 plan.
 
 9      (d)  The department may develop a payment methodology under
 
10 the QUEST program to reimburse safety net health plans that are
 
11 approved under subsection (b) or (c).  The payment methodology
 
12 shall account for risk factor adjustments and:
 
13      (1)  The additional costs of providing ancillary services
 
14           under subsection (b)(5);
 
15      (2)  The health status of the plan's enrollees; and
 
16      (3)  The socio-demographic characteristics of the plan's
 
17           enrollees, including homelessness, illiteracy, and
 
18           having a language other than English as the primary
 
19           language.
 
20      (e)  The department may award QUEST contracts only to safety
 
21 net health plans qualifying under this section; provided that the
 
22 plan's bid:
 

 
 
 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (1)  Meets the basic requirements of the QUEST request for
 
 2           proposals; and
 
 3      (2)  Is no higher than five per cent above the fixed bid
 
 4           amount, or a range amount, as appropriate, as
 
 5           established by the department for QUEST bid awards.
 
 6      (f)  A QUEST contract awarded under subsection (e) may
 
 7 include provisions to:
 
 8      (1)  Limit the amount of operating gain to not more than
 
 9           three per cent of the amount of the contract;
 
10      (2)  Require the plan to refund to the department operating
 
11           gains exceeding three per cent of the contract amount;
 
12      (3)  Limit the amount of operating loss to not exceed one
 
13           and one-half per cent of the amount of the contract;
 
14           and
 
15      (4)  Require the department to reimburse the plan for
 
16           operating losses that exceed one and one-half per cent
 
17           of the amount of the contract but not over five per
 
18           cent."
 
19      SECTION 3.  The department of human services may award QUEST
 
20 bids meeting the requirements of this Act beginning July 1, 1999;
 
21 provided that the health status of enrollees shall not be
 
22 considered in awarding bids until July 1, 2000; and provided
 
23 further that socio-demographic characteristics of patients shall
 
24 not be considered in awarding bids until July 1, 2001.
 

 
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 1      SECTION 4.  New statutory material is underscored.
 
 2      SECTION 5.  This Act shall take effect upon its approval.