Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 2589 entitled:

begs leave to report as follows:

The purpose of this measure is to allow a managed care plan additional time in which to reach a determination on an enrollee complaint.

The Department of Commerce and Consumer Affairs, Hawaii Medical Service Association, and Kaiser Permanente testified in support of this measure.

State law requires a managed care plan that has received an enrollee complaint for internal review to notify the complainant of the outcome of the review within forty-five days of the complaint's receipt. Federal labor rules allow health insurers sixty days to in which to make a determination on an appeal of a post-service claim.

This measure aligns state law with federal law by extending the deadline for notification to an enrollee of an internal review decision from forty-five days to sixty days. Your Committee finds that this measure will establish greater consistency in the appeals processes, thereby facilitating compliance by health plans.

Your Committee has amended this measure by making a conforming amendment to section 432E-6.5(b), Hawaii Revised Statutes.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2589, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2589, S.D. 1.