HB1703

SECTION 1. Chapter 323D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§323D- Performance bond. The state agency may require the recipient of a certificate of need to furnish a performance bond executed by a surety company authorized to do business in this State or otherwise secured in a manner satisfactory to the state agency, in a form prescribed in rules adopted by the state agency, in accordance with chapter 91, and in an amount to be determined by the state agency, at its discretion, to ensure the proper implementation of the certificate of need."

SECTION 2. Section 323D-2, Hawaii Revised Statutes, is amended as follows:

1. By amending the definition of "state health services and facilities plan" to read:

""State health services and facilities plan" means the comprehensive plan for the economical delivery of health services in the State prepared by the [~~statewide council.~~] the subarea councils."

2. By deleting the definition of "statewide council".

["~~"Statewide council" means the statewide health coordinating council established in section 323D-13.~~"]

SECTION 3. Section 323D-12, Hawaii Revised Statutes, is amended to read as follows:

"§323D-12 Health planning and development functions; state agency. (a) The state agency shall:

(1) Have as a principal function the responsibility for promoting accessibility for all the people of the State to quality health care services at reasonable cost. The state agency shall conduct such studies and investigations as may be necessary as to the causes of health care costs including inflation. The state agency may contract for services to implement this paragraph. The certificate of need program mandated under part V shall serve this function. The state agency shall promote the sharing of facilities or services by health care providers whenever possible to achieve economies and shall restrict unusual or unusually costly services to individual facilities or providers where appropriate;

(2) Serve as staff to and provide technical assistance and advice to [~~the statewide council and~~] the subarea councils in the preparation, review, and revision of the state health services and facilities plan;

(3) Conduct the health planning activities of the State in coordination with the subarea councils, implement the state health services and facilities plan, and determine the statewide health needs of the State after consulting with the [~~statewide~~] appropriate subarea council; and

(4) Administer the state certificate of need program pursuant to part V.

(b) The state agency may:

(1) Prepare such reports and recommendations on Hawaii's health care costs and public or private efforts to reduce or control costs and health care quality as it deems necessary. The report may include, but need not be limited to, a review of health insurance plans, the availability of various kinds of health insurance and malpractice insurance to consumers, and strategies for increasing competition in the health insurance field[.];

(2) Prepare and revise as necessary the state health services and facilities plan[.];

(3) Prepare, review, and revise the annual implementation plan[.];

(4) Assist the [~~statewide council~~] subarea councils in the performance of [~~its~~] their functions[.];

(5) Determine the need for new health services proposed to be offered within the State[.];

(6) Assess existing health care services and facilities to determine whether there are redundant, excessive, or inappropriate services or facilities and make public findings of any that are found to be so. The state agency shall weigh the costs of the health care services or facilities against the benefits the services or facilities provide and there shall be a negative presumption against marginal services[.];

(7) Provide technical assistance to persons, public or private, in obtaining and filling out the necessary forms for the development of projects and programs[.];

(8) Prepare reports, studies, and recommendations on emerging health issues, such as medical ethics, health care rationing, involuntary care, care for the indigent, and standards for research and development of biotechnology and genetic engineering[.]; and

(9) Conduct such other activities as are necessary to meet the purposes of this chapter."

SECTION 4. Section 323D-13.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§323D-13.5[]] Disqualification from position or membership. The chairpersons of [~~the statewide council,~~] the subarea health planning councils and the review panel[,] shall not be employed by or married to health care providers."

SECTION 5. Section 323D-14, Hawaii Revised Statutes, is amended to read as follows:

"§323D-14 Functions; [~~statewide health coordinating council.~~] subarea councils. The [~~statewide council~~] subarea councils shall:

(1) Prepare and revise as necessary the state health services and facilities plan; for each subarea;

(2) Advise the state agency on actions under section 323D-12;

(3) Appoint the review panel pursuant to section 323D-42; and

(4) Review and comment upon the following actions by the state agency before such actions are made final:

(A) The making of findings as to applications for certificate of need; and

(B) The making of findings as to the appropriateness of those institutional and noninstitutional health services offered in the State."

SECTION 6. Section 323D-17, Hawaii Revised Statutes, is amended to read as follows:

"§323D-17 Public hearings required. In the preparation of the state health services and facilities plan or amendments to the state health services and facilities plan, the state agency and the [~~statewide~~] appropriate subarea council shall conduct a public hearing on the proposed plan or the amendments and shall comply with the provisions for notice of public hearings in chapters 91 and 92."

SECTION 7. Section 323D-21, Hawaii Revised Statutes, is amended to read as follows:

"§323D-21 Subarea health planning councils, established. There are established, subarea health planning councils for geographical areas [~~which~~] that shall be designated by the state agency [~~in consultation with the statewide council~~]. Each county shall have at least one subarea health planning council. The subarea health planning councils shall be placed within the state agency for administrative purposes."

SECTION 8. Section 323D-22, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each subarea health planning council shall review, seek public input, and make recommendations relating to health planning for the geographical subarea it serves. In addition, the subarea health planning councils shall:

(1) Identify and recommend to the state agency [~~and the council~~] the data needs and special concerns of the respective subareas with respect to the preparation of the state plan[.];

(2) Provide specific recommendations to the state agency [~~and the council~~] regarding the highest priorities for health services and resources development[.];

(3) Review the state health services and facilities plan as it relates to the respective subareas and make recommendations to the state agency [~~and the council.~~];

(4) Advise the state agency in the administration of the certificate of need program for their respective subareas[.];

(5) Advise the state agency on the cost of reimbursable expenses incurred in the performance of their functions for inclusion in the state agency budget[.];

(6) Advise the state agency in the performance of its specific functions[.]; and

(7) Perform other such functions as agreed upon by the state agency and the respective subarea councils.

[~~(8)~~ ~~Each subarea health planning council shall recommend for gubernatorial appointment at least one person from its membership to be on the statewide council.~~]"

SECTION 9. Section 323D-42, Hawaii Revised Statutes, is amended to read as follows:

"§323D-42 Review panel. There is established a review panel for the purposes of reviewing applications for certificates of need. The review panel shall be appointed by the [~~statewide council.~~] subarea councils. The review panel shall include at least one member from each county and a majority of the members shall be consumers. Membership on [~~the statewide~~] a subarea council shall not preclude membership on the review panel established in this section."

SECTION 10. Section 323D-44, Hawaii Revised Statutes, is amended by amending its title and subsections (a) and (b) to read as follows:

"§323D-44 Applications for certificates of need[.]; decision subject to approval of governor. (a) An applicant for a certificate of need shall file an application with the state agency. The state agency shall provide technical assistance to the applicant in the preparation and filing of the application.

Each application shall include a statement evaluating the facility's or service's probable impact on health care costs and providing additional data as required by rule. The statement shall include cost projections for at least the first and third years after its approval.

The state agency shall not accept an application for review until the application is complete and includes all necessary information required by the state agency. The state agency shall determine if the application is complete within thirty days of receipt of the application. If the state agency determines that the application is incomplete, the state agency shall inform the applicant of the additional information that is required to complete the application. When the state agency determines that the application is complete, the period for agency review described in subsection (b) shall begin, and the state agency shall transmit the completed application to the appropriate subarea councils, the review panel, [~~the statewide council,~~] appropriate individuals, and appropriate public agencies. The state agency may require the applicant to provide copies of the application to the state agency, the appropriate subarea councils, the review panel, [~~the statewide council,~~] appropriate individuals, and appropriate public agencies. If, during the period for agency review, the state agency requires the applicant to submit information respecting the subject of the review, the period for agency review [~~shall~~], at the request of the applicant, shall be extended fifteen days.

(b) The state agency, subject to the approval of the governor, shall issue a decision [on] to approve or reject the application within ninety days after the beginning of the period for agency review, unless the state agency within the ninety days notifies the applicant in writing that the period for agency review has been extended by the state agency sixty days beyond the ninety days. The decision shall be subject to post-decision review procedures which the state agency may provide for by rules adopted in conformity with chapter 91."

SECTION 11. Section 323D-44.6, Hawaii Revised Statutes, is amended to read as follows:

"[[]§323D-44.6[]] Review of certain applications for certificate of need; waiver. The subarea council[,] and the review panel[~~, and the statewide council may~~], at their discretion, may choose to waive their respective prerogatives of review of any certificate of need application[.] subject to the approval of the governor."

SECTION 12. Section 323D-45, Hawaii Revised Statutes, is amended by amending its title and subsection (a) to read as follows:

"§323D-45 Subarea council[,] and review panel[~~, and statewide council~~] recommendations for issuance or denial of certificates of need. (a) Except for an administrative review as provided in section 323D-44.5, or in an emergency situation or other unusual circumstances as provided in section 323D-44(c), the state agency shall refer every application for a certificate of need to the appropriate subarea council or councils[,] and the review panel[~~, and the statewide council~~]. The subarea council and the review panel shall consider all relevant data and information submitted by the state agency, subarea councils, other areawide or local bodies, and the applicant[,] and may request from them additional data and information. The review panel shall consider each application at a public meeting and shall submit its recommendations with findings to the [~~statewide~~] appropriate subarea council. The [~~statewide~~] appropriate subarea council shall consider the recommendation of the review panel at a public meeting and shall submit its recommendations to the state agency within [~~such~~] the time [as] the state agency prescribes. The [~~statewide~~] appropriate subarea council and the review panel may join together to hear or consider simultaneously information related to an application for a certificate of need."

SECTION 13. Section 323D-45.3, Hawaii Revised Statutes, is amended to read as follows:

"§323D-45.3 Approval of applications required to meet safety, licensure, or accreditation standards. (a) Notwithstanding section 323D-43, the state agency, subject to the approval of the governor, shall approve an application for a certificate of need for a capital expenditure [~~which~~] that is required:

(1) To eliminate or prevent imminent safety hazards as defined by federal, state, or county fire, building, or life safety codes or regulations[~~, or~~];

(2) To comply with state licensure standards[,]; or

(3) To comply with accreditation standards, compliance with which is required to receive reimbursements under title XVIII of the Social Security Act or payments under a state plan for medical assistance approved under title XIX of [~~such~~] the Act,

unless the state agency finds that the facility or service with respect to which the capital expenditure is proposed to be made is not needed or that the obligation of the capital expenditure is not consistent with the state health services and facilities plan in effect under section 323D-15.

(b) An application for a certificate of need approved by the state agency, subject to the approval of the governor, under this section shall be approved only to the extent that the capital expenditure is required to eliminate or prevent the hazards described in paragraph (1) or to comply with the standards described in paragraph (2) or (3)."

SECTION 14. Section 323D-46, Hawaii Revised Statutes, is amended to read as follows:

"§323D-46 Conditional certification[.]; subject to the approval of the governor. The state agency shall provide by rules adopted in conformity with chapter 91 for the conditional certification of those proposals [~~which,~~] that, by modification of specific items of the proposal, would successfully meet the criteria for approval. The state agency shall establish a time period not to exceed one hundred fifty days from the date of the conditional certification within which the applicant shall certify to the state agency that the required modifications have been made. The state agency shall require a statement from the applicant certifying that the required modifications have been made before issuing, subject to the approval of the governor, a certificate of need [~~is issued~~]. The state agency, subject to the approval of the governor, shall deny any application in which the required modifications have not been made within the time period established by the state agency."

SECTION 15. Section 323D-47, Hawaii Revised Statutes, is amended to read as follows:

"§323D-47 Request for reconsideration. The state agency may provide by rules adopted in conformity with chapter 91 for a procedure by which any person [~~may~~], for good cause shown, may request in writing a public hearing before a reconsideration committee for purposes of reconsideration of the agency's decision. The reconsideration committee shall consist of the administrator of the state agency and the chairpersons of [~~the statewide council,~~] the review panel[~~, the plan development committee of the statewide council,~~] and the appropriate subarea health planning council. The administrator shall be the chairperson of the reconsideration committee. A request for a public hearing shall be deemed by the reconsideration committee to have shown good cause, if:

(1) It presents significant, relevant information not previously considered by the state agency;

(2) It demonstrates that there have been significant changes in factors or circumstances relied upon by the state agency in reaching its decision;

(3) It demonstrates that the state agency has materially failed to follow its adopted procedures in reaching its decision;

(4) It provides such other bases for a public hearing as the state agency determines constitutes good causes; or

(5) The decision of the administrator differs from the recommendation of the [~~statewide~~] appropriate subarea council.

To be effective a request for such a hearing shall be received within ten working days of the state agency decision. A decision of the reconsideration committee following a public hearing under this section shall be considered a decision of the state agency for purposes of section 323D-44."

SECTION 16. Section 323D-54, Hawaii Revised Statutes, is amended to read as follows:

"§323D-54 Exemptions from certificate of need requirements. Nothing in this part or rules with respect to the requirement for certificates of need applies to:

(1) Offices of physicians, dentists, or other practitioners of the healing arts in private practice as distinguished from organized ambulatory health care facilities, except in any case of purchase or acquisition of equipment attendant to the delivery of health care service and the instruction or supervision for any private office or clinic involving a total expenditure in excess of the expenditure minimum;

(2) Laboratories, as defined in section 321-11(12), except in any case of purchase or acquisition of equipment attendant to the delivery of health care service and the instruction or supervision for any laboratory involving a total expenditure in excess of the expenditure minimum;

(3) Dispensaries and first aid stations located within business or industrial establishments and maintained solely for the use of employees; provided [~~such~~] these facilities do not regularly provide inpatient or resident beds for patients or employees on a daily twenty-four-hour basis;

(4) Dispensaries or infirmaries in correctional or educational facilities;

(5) Dwelling establishments, such as hotels, motels, and rooming or boarding houses that do not regularly provide health care facilities or health care services;

(6) Any home or institution conducted only for those who, pursuant to the teachings, faith, or belief of any group, depend for healing upon prayer or other spiritual means;

(7) Dental clinics;

(8) Nonpatient areas of care facilities such as parking garages and administrative offices;

(9) Bed changes that involve ten per cent or ten beds of existing licensed bed types, whichever is less, of a facility's total existing licensed beds within a two-year period;

(10) Projects that are wholly dedicated to meeting the State's obligations under court orders, including consent decrees, that have already determined that need for the projects exists;

(11) Replacement of existing equipment with its modern-day equivalent;

(12) Primary care clinics under the expenditure thresholds referenced in section 323D-2;

(13) Equipment and services related to that equipment, that are primarily invented and used for research purposes as opposed to usual and customary diagnostic and therapeutic care;

(14) Capital expenditures that are required:

(A) To eliminate or prevent imminent safety hazards as defined by federal, state, or county fire, building, or life safety codes or regulations;

(B) To comply with state licensure standards; or

(C) To comply with accreditation standards, compliance with which is required to receive reimbursements under Title XVIII of the Social Security Act or payments under a state plan for medical assistance approved under Title XIX of [~~such~~] that Act;

(15) Extended care adult residential care homes and assisted living facilities; or

(16) Other facilities or services that the agency through the [~~statewide~~] appropriate subarea council chooses to exempt, by rules pursuant to section 323D-62."

SECTION 17. Section 323D-62, Hawaii Revised Statutes, is amended to read as follows:

"§323D-62 Rules. The state agency and the [~~statewide health coordinating council~~] subarea councils may adopt necessary rules for the purposes of this chapter in accordance with chapter 91."

SECTION 18. Section 323D-73, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) For acquisitions which require approval from the agency under this part and a certificate of need, the applicant shall submit a single application for both purposes and the application shall be reviewed under a single unified review process by the agency. Following the single unified review process, the agency shall simultaneously issue its decision, subject to the approval of the governor, regarding the certificate of need and its decision for purposes of the sale of a hospital under this part."

SECTION 19. Section 323D-74, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The agency, after consultation with the attorney general, shall[~~, if appropriate,~~] hold a public hearing during the course of review, [~~which hearing~~] if appropriate, that may be held jointly with the certificate of need review panel [~~or the statewide health coordinating council,~~] and in which any person may file written comments and exhibits or appear and make a statement. The agency or the attorney general may subpoena additional information or witnesses, require and administer oaths, require sworn statements, take depositions, and use related discovery procedures for purposes of the hearing and at any time prior to making a decision on the application."

SECTION 20. Section 323D-13, Hawaii Revised Statutes, is repealed.

["~~§323D-13 Statewide health coordinating council.~~ ~~(a) There is established a statewide health coordinating council which shall be advisory to the state agency and the membership of which as appointed by the governor shall not exceed twenty members.~~

(b) The members of the statewide council shall be appointed by the governor in accordance with section 26-34, provided that a nonvoting, ex officio member who is the representative of the Veterans' Administration shall be designated by the Veterans' Administration. The membership of the statewide council shall be broadly representative of the age, sex, ethnic, income, and other groups that make up the population of the State and shall include representation from the subarea councils, business, labor, and health care providers. A majority but not more than eleven of the members shall be consumers of health care who are not also providers of health care.

(c) The statewide council shall select a chairperson from among its members. The members of the statewide council shall not be compensated but shall be reimbursed for necessary expenses incurred in the performance of their duties.

(d) The number of members necessary to constitute a quorum to do business shall consist of a majority of all members who have accepted nomination to the council, and have been confirmed and qualified as members of the council. When a quorum is in attendance, the concurrence of a majority of the members in attendance shall make any action of the council valid.

(e) No member of the statewide council shall, in the exercise of any function of the statewide council described in section 323D-14(3), vote on any matter before the statewide council respecting any individual or entity with which the member has or, within the twelve months preceding the vote, had any substantial ownership, employment, medical staff, fiduciary, contractual, creditor, or consultative relationship. The statewide council shall require each of its members who has or has had such a relationship with an individual or entity involved in any matter before the statewide council to make a written disclosure of the relationship before any action is taken by the statewide council with respect to the matter in the exercise of any function described in section 323D-14 and to make the relationship public in any meeting in which the action is to be taken."]

SECTION 21. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 22. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 23. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1703
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII