HB1782.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. As witnessed during the 2008 presidential campaign, technology is beginning to take a more prominent role and is expected to remain that way.

Public health experts, federal and state governments, even the newly inaugurated President Obama and his administration recognize the potential economic and health benefits of health information exchanges and similar ehealth initiatives and are searching for ways to further their growth. President Obama has publicly pledged to aggressively pursue the use of health information technology as he sees it as a key component of his economic stimulus plan and has previously pledged $10,000,000,000 toward the development and implementation of health information technology.

Health information technology is poised to become a powerful vehicle for improving patient health and quality of care, safety, and efficiency through the secure exchange of patient data among all stakeholders. To date, approximately twenty-six states have implemented health information exchange programs aimed at improving overall quality of care, reducing or averting medical errors, and saving billions of dollars within the health care system.

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 health is the first of many steps that need to be taken in order 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 even 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 health to coordinate local efforts, identify funding sources, integrate state health programs, and eventually participate in the national health information technology network. This is one of eight proposals being introduced in the legislature this year designed to address the increasingly problematic medical environment in Hawaii. Collectively, these eight legislative proposals are known as "The Hawaii Doctor Recruitment and Retention Action Plan of 2009".

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

"Council" shall mean the ehealth council as established by section 321-D.

"Department" means the department of health.

"Director" means the director of health.

"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.

(2) Shall not mean 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.

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

"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.

"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.

§321‑B Office of state coordinator of health information exchange; establishment. There is established within the department of health the office of state coordinator of health information exchange. The office shall:

(1) Coordinate local efforts, identify funding sources and integrate with state 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;

(2) Provide governance and guidance for health information exchange;

(3) Collaborate with the Hawaii medical board to develop criteria for physicians that require the use of information technologies that facilitate improved care and reduced medical errors;

(4) Develop risk management policies and procedures and liability limits for physicians and hospitals that contribute data to the health information exchange;

(5) Implement a statewide strategic plan for health information exchange; and

(6) Convene annual council meetings comprised of representatives including but not limited to the medical, insurance, and legal fields, and county, state, and federal governments; and

(7) Administer the statewide health information exchange system.

The office of state coordinator of health information exchange shall also administer a health information exchange network that will allow physicians to access medicaid patients' electronic health records, including but not limited to pharmacy information, laboratory results, and any other information on record that will improve patient care.

§321‑C 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 medicaid recipients and other low-income uninsured residents of the State. The health information exchange 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, and medical histories;

(2) Develop a mechanism to evaluate, promote, and improve the quality of health and health care delivered to the medicaid and low-income uninsured populations through the use of quality performance measures, evidence-based standards of care, and other measurements that facilitate quality improvement; and

(3) Develop an enhanced medicaid reimbursement methodology to compensate network participants at a level that ensures provider participation and success.

(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 the Centers for Medicare and Medicaid Services transformation grant.

(c) All network participants in the health information exchange network shall be required to adopt an interoperable electronic system. Reimbursements for expenses incurred in adopting or acquiring new electronic systems, or both, may be allowed to participants serving rural or underserved areas.

(d) No later than June 30, 2012, the department of health shall expand the health information exchange network to include all state employees in addition to all medicaid and low-income uninsured residents.

§321‑D Council; establishment. (a) The office of state coordinator of health information exchange shall convene an annual council to be comprised of at least the following:

(1) A representative from the medical industry;

(2) A representative from the legal profession;

(3) A representative from the insurance industry;

(4) A representative from the technology industry;

(5) One majority member of the house of representatives;

(6) One minority member of the house of representatives;

(7) One majority member of the senate;

(8) One minority member of senate;

(9) The director of health or a designee;

(10) The director of human services or a designee;

(11) The director of commerce and consumer affairs or a designee;

(12) The director of business, economic development, and tourism or a designee; and

(13) Any other stakeholders who wish to participate.

The council chairperson shall be selected by the members of the council and shall serve for a term of one year. Council members shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

(b) The council shall develop a ten-year strategic plan for the office of state coordinator of health information exchange and the health information exchange network that shall include but not be limited to:

(1) An education and awareness campaign;

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

(3) Establishing specific goals and guidelines to be used to measure quality and standards of health and health care.

§321‑E Health information exchange special fund; establishment. (a) There is established within the state treasury, to be administered by the department of health, 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 of state coordinator of health information exchange, 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 council meetings;

(3) Reimbursement for expenses incurred by health information exchange network participants for adopting or acquiring new electronic systems, or both; provided that those participants serve rural or underserved areas of the State; 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 health shall assess:

(1) The effectiveness of the office of state coordinator of health information exchange, the health information exchange network, and the ehealth council 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) Increasing health care access and quality;

(D) Securing of outside funding for the program;

(2) 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

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

(b) The department of health shall submit an assessment 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 of health shall submit biennial assessments to the legislature beginning with the regular session of 2020, and thereafter.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $1 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 $1 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 health.

SECTION 6. This Act shall take effect on July 1, 2009; provided that sections 4 and 5 take effect on July 1, 2011.

INTRODUCED BY:	_____________________________

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