HB1782 HD2.DOC

SECTION 1. In recent years, the establishment and development of health information exchanges within the United States has become increasingly significant, reflecting the changing role that technology plays in the way we operate government and business.

Public health experts and federal and state governments recognize the potential economic and health benefits of health information exchanges and similar e-health initiatives and are searching for ways to further their growth. Health information technology has been set as a key component of the federal 2009 economic stimulus plan and the President has previously pledged $10,000,000,000 toward the development and implementation of health information technology.

As a way to encourage states to adopt health information exchanges, the Centers for Medicare and Medicaid Services and the United States Department of Health and Human Services, Office of the Inspector General, have provided new exceptions to the Stark Law ‑‑ an "anti-kickback" statute relating to health information technology and a physician referring a patient to a medical facility in which the physician has a financial interest. Even the National Conference of State Legislatures has reported that "states are moving at an unprecedented rate to get their health care systems wired and connected."

Creating an office of state coordinator of health information exchange within the department of accounting and general services, in collaboration with the department of health, department of human services, health care providers, and health care facilities is the first of many steps that need to be taken to help Hawaii realize its potential savings in health care, while increasing quality of care and access, increasing medical services to underserved and rural areas of the state, and accessing new sources of federal funding.

The purpose of this Act is to establish an office of state coordinator of health information exchange within the department of accounting and general services to coordinate local efforts, identify funding sources, integrate state health programs, and eventually participate in the national health information technology network.

SECTION 2. Chapter 321, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . HEALTH INFORMATION EXCHANGE

§321‑ Definitions. Whenever used in this part, unless the context otherwise requires:

"Comptroller" means the comptroller of the department of accounting and general services.

"Department" means the department of accounting and general services.

“E-prescribing” means a prescriber's ability to electronically send an accurate, error-free, and understandable prescription directly to a pharmacy from the point-of-care.

"Fund" means the health information exchange special fund as established under this part.

"Health care facility" has the meaning as defined in section 323D-2.

"Health care provider":

(1) Means a physician or surgeon or osteopathic physician or surgeon licensed under chapter 453, a dentist licensed under chapter 448, a podiatrist licensed under chapter 463E, a health care facility as defined under section 323D‑2, and any of their employees; and

(2) Shall not include any nursing institution or nursing service conducted by and for those who rely upon treatment by spiritual means through prayer alone, or employees of these institutions or services.

"Network" means the health information exchange network as established under this part.

"Office" means the office of state coordinator of health information exchange as established under this part.

“Qualified state-designated entity” means an entity selected by the state through a competitive procurement process that:

(1) Is designated by the state as eligible to receive awards under this part;

(2) Is a not-for-profit entity with broad stakeholder representation on its governing board;

(3) Demonstrates that one of its principal goals is to use information technology to improve health care quality and efficiency through the authorized and secure stakeholders;

(4) Adopts nondiscrimination and conflict of interest policies that demonstrate a commitment to open, fair, and nondiscriminatory participation by stakeholders; and

(5) Conforms to such other requirements as established by the federal government.

"Rural or underserved areas" means any community or island having a population under five hundred thousand and that lacks adequate access to basic health care.

“State” shall mean the State of Hawaii.

§321‑ Office of state coordinator of health information exchange; establishment. (a) There is established within the department of accounting and general services the office of state coordinator of health information exchange. The office shall:

(1) Implement an integrated electronic health information infrastructure for the sharing of electronic health information among health care facilities, health care professionals, public and private payers, and patients;

(2) Enhance broad and varied participation in the authorized and secured nationwide electronic use and exchange of health information;

(3) Coordinate local efforts to increase the adoption and use of certification commission for health information technology electronic health records and e-prescribing; identify funding sources; integrate with state and federal health programs, including but not limited to medicaid, workers' compensation, temporary assistance to needy families, and the state children's health insurance program; and integrate with federal health programs including but not limited to the national health information technology network for the promotion of health information technology;

(4) Provide governance and guidance for health information exchange, including technical assistance for the development and dissemination of solutions to barriers to the exchange of electronic health information;

(5) Collaborate with the department of health, department of human services, health care providers, and health care facilities to ensure that all applicable federal patient privacy laws are identified and ensured through administrative rules and procedures, including the development of risk management policies and procedures and liability limits for physicians and hospitals that contribute data to the health information exchange;

(6) Promote effective strategies to adopt and use health information technology across the state, particularly in rural or underserved areas;

(7) Assist patients in using health information technology;

(8) By no later than January 1, 2010, begin implementation of a statewide strategic plan for health information exchange that is consistent with the strategic plan developed by the United States Department of Health and Human Services, Office of National Coordinator of Health Information Technology, as available, and which shall include a description of the ways the state or qualified state-designated entity will execute the state strategic plan; and

(9) Administer the network.

(b) The department shall administer the office but may contract some or all of its duties with a third party or parties in accordance with chapter 103D to administer any single component or combination of components of the office, including administrating the health information exchange network, execution of state strategic plan, and pursuit of any public and private funds available for these purposes.

(c) Any contract with third parties to administer any component of the office shall be established at a fair, market value cost, as negotiated by the department.

(d) Any third party contracted to administer one or more component of the office shall work in collaboration with all involved state agencies in order to meet all deadlines as set by the department. Failure to comply with this requirement may result in an immediate termination of any awarded contract for health information technology services, disqualification from future contracts, or financial penalties in an amount not less than the amount received by the contractor under the contract for health information technology services, or all or any combination of the aforesaid actions.

(e) Any contract with third parties to administer any component of the office shall prohibit the contractor from receiving any compensation or other benefits from any for-profit health information technology companies participating n the network program.

(f) Any contract between a covered entity and a vendor to provide data transmission of protected health information and that requires the vendor's access to such information on a routine basis shall include the assurances required to be documented under Title 45 Code of Federal Regulations Sections 164.502(e)(2) and 164.308(b)(4). The vendor shall be treated as a business associate of the covered entity for purposes of this subsection and Title 45 Code of Federal Regulations Part 164, subparts C and E.

For purposes of this subsection:

"Covered entity" means a covered entity under Title 45 Code of Federal Regulations Part 164.

"Vendor" means a health information exchange organization, regional health information organization, e-prescribing gateway, or any such entity that contracts with a covered entity for services allowing the covered entity to offer a personal health record to patients as part of its electronic health record.

§321‑ Health information exchange network; establishment. (a) The office of state coordinator of health information exchange shall develop and implement a health information exchange network for all residents of the state. The network shall:

(1) Implement and maintain an electronic system that allows physicians and other health care providers statewide to access electronic health records and other patient information that will improve patient care, including but not limited to pharmacy information, laboratory results, medical histories, and other clinical information such as physical examinations and medical decision-making;

(2) Develop measureable standards that can be used to evaluate, promote, and improve the quality of health and health care delivered to state residents through the use of quality performance measures, evidence-based standards of care, and other measurements that facilitate quality improvement;

(b) The department shall make use of any public or private funding available for the purpose described under subsection (a), including but not limited to federal funding from the centers for medicare and medicaid services, the agency for health care research and quality, and the office of national coordinator for health information technology.

(c) All network participants shall be required to adopt a certification commission for health information technology certified interoperable electronic system to allow interoperability. Reimbursements for expenses incurred in adopting or acquiring new electronic systems, or both, may be allowed to participants serving rural or underserved areas.

§321‑ Health information technology task force; establishment. (a) There is established, within the department of accounting and general services, for administrative purposes only, a health information technology task force which shall be comprised of:

(1) A representative from every participating health plans within the state, to be appointed by the governor from a list of candidates submitted by the president of the senate and speaker of the house of representatives;

(2) A representative from health care purchasers and employers, to be appointed by the governor from a list of candidates submitted by the president of the senate and speaker of the house of representatives;

(3) The president of the Hawaii state bar association, or the president’s designee;

(4) A representative from the insurance industry, to be appointed by the governor from a list of candidates submitted by the president of the senate and speaker of the house of representatives;

(5) A representative from patient or consumer organizations, to be appointed by the governor from a list of candidates submitted by the president of the senate and speaker of the house of representatives;

(6) A representative from the technology industry, to be appointed by the governor from a list of candidates submitted by the president of the senate and speaker of the house of representatives;

(7) A representative from the health information vendor

industry, to be appointed by the governor from a list of candidates submitted by the president of the senate and speaker of the house of representatives;

(8) A clinical researcher, to be appointed by the governor from a list of candidates submitted by the president of the university of Hawaii and dean of the John A. Burns school of medicine;

(9) One majority member of the house of representatives, or the representative’s designee, appointed by the speaker of the house of representatives;

(10) One minority member of the house of representatives, or the representative’s designee, appointed by the speaker of the house of representatives;

(11) One majority member of the senate, or the senator’s designee, appointed by the president of the senate;

(12) One minority member of senate, or the senator’s designee, appointed by the president of the senate;

(13) The comptroller of accounting and general services, or the comptroller’s designee;

(14) The director of health, or the director’s designee;

(15) The director of human services, or the director’s designee;

(16) The director of commerce and consumer affairs, or the director’s designee;

(17) The director of business, economic development, and tourism, or the director’s designee;

(18) The director of budget and finance, or the director’s designee;

(19) The president of the university of Hawaii, or the president’s designee; and

(20) Any other stakeholders who wish to participate, including other users of health information technology such as support and clerical staff of providers and others involved in the care and care coordinators of patients; provided that the president of the Hawaii medical association, or the president’s designee, shall be requested to participate as a member of the task force.

The task force chairperson shall be selected by the members of the council. Task force members shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

(b) The task force shall develop a ten-year strategic plan for the office and network that shall include but not be limited to:

(1) Consistency with the strategic plan as developed by the United States Department of Health and Human Services, Office of National Coordinator of Health Information Technology;

(2) A detailed plan for the state to execute the state strategic plan;

(3) Its impact on the public health care structure in Hawaii including but not limited to quality and access to health care within the state, especially in rural and medically underserved areas, and the cost of health care within the state;

(4) An education and awareness campaign; and

(5) Identification of additional structural or financial resources that can be utilized to enhance the health information exchange network.

(c) The health information technology task force shall submit their report of findings, goals, and finalized ten-year strategic plan by no later than twenty days prior to the convening of the regular session of 2010, and every year thereafter until the task force shall cease to exist.

(d) The health information technology task force shall cease to exist on June 30, 2014.

§321‑ Health information exchange special fund; establishment. (a) There is established within the state treasury, to be administered by the department of accounting and general services, the health information exchange special fund into which shall be deposited:

(1) Legislative appropriations;

(2) Federal funds designated for a health information exchange;

(3) Grant moneys secured for a health information exchange; and

(4) Any other revenues designated for the fund.

(b) Moneys in the health information exchange special fund shall be expended for the following purposes:

(1) The cost of administering the office, including salary and benefits of employees, computer costs, including software and infrastructure, and any contracted services related to administering the office;

(2) The cost of administering annual health information technology task force meetings;

(3) Reimbursement for expenses incurred by network participants for adopting or acquiring new electronic systems, or both; and

(4) Any other purpose deemed necessary by the department for the purpose of operating and administering this part.

All interest on fund balances shall accrue to the fund. Upon dissolution of the fund, any unencumbered moneys in the fund shall lapse into the general fund."

SECTION 3. (a) The department of accounting and general services shall assess:

(1) The effectiveness of the office of state coordinator of health information exchange, the health information exchange network, and the health information technology task force as established under part of chapter 321, Hawaii Revised Statutes, in:

(A) Providing physicians and health care providers

with secure electronic access to patient information;

(B) The implementation of an integrated electronic health information infrastructure for the sharing of electronic health information among health care facilities, health care professionals, public and private payers, and patients;

(C) The enhanced broad and varied participation in the authorized and secured nationwide electronic use and exchange of health information; and

(D) The coordinated statewide efforts, increased adoption and use of certification commission for health information technology electronic health records and e-prescribing.

(b) The department of health shall assess:

(A) The impact of the health information exchange program on increasing access and quality of health care in the state and on decreasing health care costs; and

(B) The impact of the health information exchange on reducing medical errors and the cost of medical malpractice insurance rates in the state.

(c) The department of accounting and general services and the department of health shall submit a joint report with their assessments to the legislature no later than twenty days prior to the convening of the regular session of 2010, and each year for nine years thereafter until the regular session of 2019; provided that the departments shall submit biennial assessments to the legislature beginning with the regular session of 2020, and every other year thereafter.

(d) The department of budget and finance shall submit a financial report regarding the state’s health information technology efforts including but not limited to the amount of state funds expended on health information technology, including in-kind services, what efforts were made to secure outside public and private funding for health information technology and successful those efforts were, including the dollar amounts awarded, the amount of money granted to the state under the federal economic stimulus plan of 2009, and the state’s financial plan for health information technology for the upcoming fiscal year. The department shall submit its report to the legislature no later than twenty days prior to the convening of the regular session of 2010, and each year for nine years thereafter until the regular session of 2019; provided that the department shall submit biennial assessments to the legislature beginning with the regular session of 2020, and every other year thereafter.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2011-2012 and the same sum or so much thereof as may be necessary for fiscal year 2012-2013 for deposit into the health information exchange special fund.

SECTION 5. There is appropriated out of the health information exchange special fund the sum of $ or so much thereof as may be necessary for fiscal year 2011-2012 for the purposes of the fund.

The sums appropriated shall be expended by the department of accounting and general services.

SECTION 6. This Act shall take effect on July 1, 2046.

HOUSE OF REPRESENTATIVES	H.B. NO.	1782
TWENTY-FIFTH LEGISLATURE, 2009		H.D. 2
STATE OF HAWAII