STAND. COM. REP. NO. 709

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 511
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 511 entitled: 

     "A BILL FOR AN ACT RELATING TO HEALTH CARE FACILITY
     PAYMENTS,"

begs leave to report as follows:

     The purpose of this measure is to require insurers, mutual
benefit societies, and health maintenance organizations to pay
health care facilities directly regardless of their participatory
status.

     The Insurance Commissioner and the Hawaii Health Systems
Corporation presented testimony in support of the measure.  Two
individuals, though not present at the hearing, submitted written
testimony in support of the measure.  

     Kaiser Permanente, State Farm Insurance Companies, Queen's
Health Management, Hawaii Medical Service Association, University
Health Alliance, Physicians HealthHawaii, Inc., Kapi'olani
HealthHawaii, and  Legislative Information Service of Hawaii
presented testimony in opposition to the measure.  Hawaii Medical
Group Management Association and the Chamber of Commerce of
Hawaii, though not present at the hearing, submitted written
testimony in opposition to the measure. 

     Your Committee finds that often when a health care facility
and a health insurer cannot agree on a reimbursement amount, the
insurer will send the reimbursement directly to the patient and

 
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                                   STAND. COM. REP. NO. 709
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leave it for the facility to recover the sum from the patient.
When a patient is experiencing financial hardship, this practice
typically results in a loss to the health care facility.

     Although it is a burden on all health care facilities, this
practice is even more burdensome on rural health care facilities
which do not have the ability to shift losses like their larger
urban counterparts.  Additionally, because of their small size,
rural health care facilities are disadvantaged in negotiating
with health care insurers.

     This measure would facilitate recovery of insured amounts by
health care facilities.  It does not require a health insurer to
reimburse a nonparticipating facility at the same rate as a
participating facility.

     Your Committee has amended this measure by limiting its
application to rural health care facilities.

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 511, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 511, S.D. 1, and be placed on the calendar for Third Reading.

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



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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