STAND. COM. REP. NO. 382-04
Honolulu, Hawaii
, 2004
RE: H.B. No. 1816
H.D. 1
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-Second State Legislature
Regular Session of 2004
State of Hawaii
Sir:
Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 1816, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO WORKERS' COMPENSATION,"
begs leave to report as follows:
The purpose of this bill is to require the Department of Labor and Industrial Relations (DLIR) to establish a voluntary program that provides workers' compensation drug benefits to injured workers through a card-based system that is administered by a private third party selected in accordance with the Procurement Code.
A concerned individual testified in support of this bill. DLIR and RxAmerica supported the intent of the bill. Hawaii State AFL-CIO opposed the measure.
Your Committee finds that under this system, the injured worker is able to get an approved prescription filled promptly and at no cost. The pharmacist is paid directly by the third-party administrator who is reimbursed by the workers' compensation insurance carrier.
This bill is modeled on existing agreements between private third-party drug administrators and insurance carriers including the Department of Human Resources Development. These private third-party administrators have been able to negotiate cheaper drug prices, resulting in reduced workers' compensation costs.
While the AFL-CIO acknowledged that there are serious deficiencies in the current system, it was not convinced that this bill constituted an improvement. Their expressed reservations were:
(1) The third-party administrator has no basis for determining eligibility and will, therefore, pay for drugs during a period of time when the claim may be contested. If the claim is ultimately denied, the third-party administrator will need to recoup its payments from the injured worker. This will result in civil litigation;
(2) The system, which is to be on-line for pharmacies having on-line computer capabilities, lacks sufficient controls to assure that there will not be violations of privacy protections under the Health Insurance Portability and Accountability Act of 1996;
(3) It could be a first step toward forcing injured workers into managed care programs that include providers and pharmacists that use the drug card system;
(4) The assertion that the program will provide savings is not realistic, in light of the costs associated with the need to recoup payment from drug card participants whose claims are denied;
(5) The assertion that the program can be established with little funding is not supported by any studies; and
(6) The system will be bifurcated between those who "opt out" and those who participate. This is likely to lead to inequities and increased costs.
Your Committee appreciates AFL-CIO's testimony and believes that these concerns need to be more fully addressed by the bill's proponents and regrets that it did not have the opportunity to explore these concerns with a representative of the AFL-CIO. Hopefully, this dialogue will occur as the bill moves along. Your Committee believes this bill proposes an intriguing concept that warrants additional legislative attention.
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. 1816, H.D. 1, 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,
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____________________________ KENNETH T. HIRAKI, Chair |
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