HOUSE OF REPRESENTATIVES             H.C.R. NO.72          
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                     HOUSE CONCURRENT
                        RESOLUTION
REQUESTING THE INSURANCE COMMISSIONER TO INVESTIGATE AND
   DETERMINE THE FAIRNESS OF THE ELIGIBLE CHARGE REIMBURSEMENT
   RATES OF THE HAWAII'S MUTUAL BENEFIT SOCIETIES. 


 1       WHEREAS, it has been claimed that the reimbursement
 2   practices of some of Hawaii's mutual benefit societies have
 3   caused many problems for Hawaii's hospitals; and
 4   
 5       WHEREAS, the low reimbursement rates have forced hospitals
 6   to institute cost-cutting measures that may not be in the best
 7   interest of consumers, including shortening hospital stays, to
 8   make up for lost income; and
 9   
10       WHEREAS, all hospitals in the State, including the
11   community hospitals under the Hawaii Health Systems Corporation
12   negotiate their own contracts with mutual benefit societies;
13   and
14   
15       WHEREAS, reportedly, some mutual benefit societies have not
16   been willing to increase their reimbursement rates to the
17   Hawaii Health Systems Corporation hospitals in contract
18   negotiations so that the hospitals continue to face shortfalls
19   in income even as they incur expenditures for services rendered
20   far in excess of the amounts they are reimbursed by the mutual
21   benefit societies; and
22   
23       WHEREAS, although preferred providers are party to an
24   agreement in which they agree to accept the mutual benefit
25   societies' low reimbursement "eligible charges," in fact, the
26   mutual benefit societies' unwillingness to increase
27   reimbursement rates and because the option of becoming an non-
28   preferred provider entails serious disadvantages; and
29   
30       WHEREAS, for example, under a preferred provider contract,
31   mutual benefit society reimbursement payments are sent directly
32   to preferred provider hospitals, thus saving the hospitals the
33   time and cost of collecting payments directly from each patient
34   treated, providing a quick turnaround and regularity and
35   predictability in payments, whereas if a a hospital does not
36   contract with a mutual benefit society and is thus not a
37   participating preferred provider, such payments go directly to
38   patients; and
39   

 
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 1       WHEREAS, if the Hawaii Health Systems Corporation hospitals
 2   are not able to negotiate higher reimbursement rates from
 3   mutual benefit societies, their only alternative would be to
 4   not contract with mutual benefit societies and become non-
 5   participating providers; and
 6   
 7       WHEREAS, although non-participating providers may impose
 8   more realistic charges above some mutual benefit societies'
 9   reimbursement rates, the additional costs must be borne by
10   consumers of health care -- an unfair burden when some mutual
11   benefit societies' reimbursement rates are clearly and
12   unrealistically low; and
13   
14       WHEREAS, it is in the public interest that all mutual
15   benefit societies' reimbursement rates be examined to determine
16   their fairness, especially in light of the unwillingness of
17   some mutual benefit societies to negotiate more realistic
18   rates; now, therefore,
19    
20       BE IT RESOLVED by the House of Representatives of the
21   Twentieth Legislature of the State of Hawaii, Regular Session
22   of 1999, the Senate concurring, that the Insurance Commissioner
23   is requested to investigate in confidence and determine the
24   fairness of the eligible charge reimbursement rates of all
25   mutual benefit societies; and
26   
27       BE IT FURTHER RESOLVED that the Insurance Commissioner is
28   requested to investigate the various profit and nonprofit
29   entities used by mutual benefit societies to determine the
30   impact this has on the profit margin and/or the increase in
31   premiums of mutual benefit societies, if any; and
32   
33       BE IT FURTHER RESOLVED that the Insurance Commissioner is
34   requested to report its findings and recommendations in
35   confidence, including any necessary proposed implementing
36   legislation, to the Legislature twenty days prior to the
37   convening of the Regular Session of 2000; and
38   

 
 
 
 
 
 
 
 
 
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                                  H.C.R. NO.            
                                                        
                                                        

 
 1       BE IT FURTHER RESOLVED that certified copies of this
 2   Concurrent Resolution be transmitted to the Insurance
 3   Commissioner, the President of the Hawaii Medical Service
 4   Association, the Chief Executive Officer of the Hawaii Health
 5   systems Corporation, the President of the Hawaii Management
 6   Alliance Association, the President of the Mutual Benefit
 7   Association of Hawaii, the President of Queen's Preferred Plan,
 8   the President of the University of Hawaii Health Alliance, and
 9   the President of the Voluntary Employee Benefit Association of
10   Hawaii.
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14                         OFFERED BY:  ____________________________