STAND. COM. REP. NO. 385-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2811
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 2811, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO HEALTH,"

begs leave to report as follows:

     The purpose of this bill is to amend the Patients Bill of
Rights (PBR) law according to the recommendations of the Patient
Rights and Responsibilities Task Force (PRRTF), by:

     (1)  Defining the term "medical necessity," that provides
          the standard for treatment that must be included in any
          category of services covered by a health plan, to mean
          treatment:

          (A)  Recommended by a licensed provider or the treating
               physician;

          (B)  That is the most appropriate level of service;

          (C)  Known to be effective based on the following
               hierarchy of criteria:

               (i)   Scientific evidence;

               (ii)  Professional standards of care; and

               (iii) Expert opinion;

               and

 
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          (D)  That is cost-effective as compared to other
               interventions;

     (2)  Providing patients and their physicians with the
          ability to request expedited internal or external
          review of managed care plan denials of pre-service
          medical coverage; and

     (3)  Authorizing the Insurance Commissioner (Commissioner)
          to retain an independent review organization to assist
          the Commissioner in conducting external reviews.

     Your Committee received testimony in support of this measure
from the Commissioner testifying as chair of the PRRTF, Kaiser
Permanente, Kokua Council, and a retired nurse who is also a
member of the PRRTF.

     Testimony supporting and opposing various portions of the
bill was submitted by the Hawaii Medical Service Association.
The Hawai'i Nurses' Association and Hawaii Chapter, American
Academy of Pediatrics supported the intent of the bill.  Comments
were provided by the Department of Health, Hawaii Medical
Association and Hawaii Psychological Association.  Hawaii
Biodyne, Inc., testified in opposition.  Most of those testifying
also suggested amendments.

     Those requesting that this bill be amended, raised the
following issues:

     (1)  While replacing the term "treating physician" with
          "licensed health care provider" would have the intended
          effect of including other health care professionals
          such as nurses, and is a term already defined in of the
          Hawaii Revised Statutes (HRS), it would also include
          state licensed providers that do not fall under certain
          health plan contracts;

     (2)  Provisions of the bill requiring disclosure of internal
          review decisions to the Commissioner may conflict with
          the state Privacy of Health Care Information Act, or
          federal laws regulating substance abuse or AIDS
          treatment information, and may also have a chilling
          effect on the ability of patients to freely utilize the
          right to regular and expedited internal review under
          the PBR;


 
 
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     (3)  The requirement that a final internal review decision
          be rendered within 45 days of submission of the
          complaint differs from the industry standard of 30 days
          of receipt of necessary clinical information or record,
          and in some cases may inadvertently waste resources by
          causing denial of coverage due to insufficient
          information resulting in an additional, external
          review;

     (4)  The criteria for deciding the medical necessity of an
          intervention, as well as the related definition of
          "health intervention," do not include language stating
          that the intervention in question may be for the
          purpose of preventing or ameliorating a medical
          condition, and may thus be read to exclude preventative
          care interventions of importance in the pediatric
          context, with respect to children with special needs;

     (5)  The use of cost effectiveness as one of the four
          primary criteria for determining medical effectiveness
          is unwise, because the term is not subject to a
          universally accepted definition, may be employed
          subjectively, and is an imprecise tool allowing bias in
          the analysis of medical necessity which should be
          either eliminated, or at least lowered to evidence
          which could be considered;

     (6)  The hierarchy of information to be considered when
          determining medical necessity, which places scientific
          evidence first, followed by standard of care, then
          expert opinion, may be inappropriate to determine
          necessary care in the pediatric context and as applied
          to special needs patients who are not the "average"
          clinical trial subject; and

     (7)  The kinds of scientific evidence that may be considered
          is too narrowly limited to "medical journals" and
          excludes a significant volume of psychosocial and
          behavioral research relevant to interventions such as
          substance use cessation and chronic pain management,
          whereas use of the broader standard of "peer reviewed
          professional journals" would reflect the diversity of
          available research while maintaining high standards of
          research evidence.


 
 
 
 
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     Although it appears that many issues remain to be resolved
by the various participants of the PRRTF, your Committee also
understands that this bill involves complex subject matter
requiring the difficult balancing of many interests in a new area
of the law.  Your Committee:

     (1)  Notes that the PRRTF is scheduled to meet again on
          February 23, 2000;

     (2)  Commends the participants of the PRRTF for their
          commitment, hard work, and insightful evaluations of
          the bill; and

     (3)  Urges task force members to continue the progress they
          have made toward developing this model legislation.

     Your Committee has amended this measure as requested by the
Commissioner to remove the redundant term "licensed" from
"licensed health care provider," and to define the term "health
care provider" consistent with the statutory definition in
section 286-163 or 327E-2, Hawaii Revised Statutes.

     Technical, nonsubstantive amendments have also been made for
purposes of clarity, consistency, and style.  In addition, to
ensure further discussion of this measure, your Committee has
replaced its effective date with a blank.

     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
purpose of H.B. No. 2811, H.D. 1, as amended herein, and
recommends that it be referred to the Committee on Finance, in
the form attached hereto as H.B. No. 2811, H.D. 2.

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



                                   ______________________________
                                   RON MENOR, Chair