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THE SENATE |
S.B. NO. |
2123 |
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THIRTY-SECOND LEGISLATURE, 2024 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
Relating to health.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further finds that the primary aim of certificate of need programs is to control health care costs by restricting duplicative services and determining whether new capital expenditures meet a community need. The legislature finds, however, that there is mounting evidence from health economists, regulatory economists, and antitrust lawyers showing that these programs fail to achieve their intended goals, and instead stifle competition by protecting incumbent providers and creating a burdensome approval process for establishing new facilities and services. Therefore, in the past several years, many states have introduced or enacted legislation to repeal or modify their existing certificate of need programs.
The legislature also finds that the State's certificate of need program covers twenty-eight health care services, which is the most restrictive in the nation, thereby limiting access to, degrading quality of, and increasing the cost of health care in the State.
Accordingly, the purpose of this Act is to repeal the State's certificate of need program to improve both the quality of and access to health care in the State while lowering costs.
SECTION 2. Chapter 323D, Hawaii Revised Statutes, is amended by adding a new section to part VII to be appropriately designated and to read as follows:
"§323D- Request for reconsideration; reconsideration committee. 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, 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 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 other bases for a public hearing that the state agency determines
constitutes good causes; or
(5) The
decision of the administrator differs from the recommendation of the statewide
council.
A request for a hearing shall be received within ten working days of the state agency decision."
SECTION 3. Section 323D-2, Hawaii Revised Statutes, is amended as follows:
1. By amending the definition of "capital expenditure" to read:
""Capital
expenditure" means any purchase or transfer of money or anything of value
or enforceable promise or agreement to purchase or transfer money or anything
of value incurred by or in behalf of any person for construction, expansion,
alteration, conversion, development, initiation, or modification as defined in
this section. [The term] "Capital
expenditure" includes the:
(1) Cost of studies, surveys, designs, plans, working drawings, specifications, and other preliminaries necessary for construction, expansion, alteration, conversion, development, initiation, or modification; and
(2) Fair market values of facilities and
equipment obtained by donation or lease or comparable arrangements as though
the items had been acquired by purchase[; and
(3) Fair market values of facilities and
equipment transferred for less than fair market value, if a transfer of the
facilities or equipment at fair market value would be subject to review under
section 323D-43]."
2. By repealing the definition of "applicant":
[""Applicant"
means any person who applies for a certificate of need under part V."]
3. By repealing the definition of "certificate of need":
[""Certificate
of need" means an authorization, when required pursuant to section
323D-43, to construct, expand, alter, or convert a health care facility or to
initiate, expand, develop, or modify a health care service."]
4. By repealing the definition of "review panel":
[""Review
panel" means the panel established pursuant to section 323D-42."]
SECTION 4. Section 323D-12, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(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; and
(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 council[; and
(4) Administer the state certificate of
need program pursuant to part V]."
SECTION 5. 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[,]
and the subarea health planning councils [and the review panel,]
shall not be employed by or married to health care providers."
SECTION 6. Section 323D-14, Hawaii Revised Statutes, is amended to read as follows:
"§323D-14 Functions; statewide health coordinating council. The statewide council shall:
(1) Prepare and revise as necessary the state health services and facilities plan;
(2) Advise the state agency on actions under section 323D-12; and
[(3) Appoint the review panel pursuant to
section 323D-42; and
(4)] (3)
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] state agency's making
of findings as to the appropriateness of those institutional and
noninstitutional health services offered in the State[.], before the
findings are made final."
SECTION 7. Section 323D-18, Hawaii Revised Statutes, is amended to read as follows:
"§323D-18 Information required of
providers. Providers of health care
doing business in the State shall submit [such] statistical and other
reports of information related to health and health care as the state agency
finds necessary to the performance of its functions. The information deemed necessary includes but
is not limited to:
(1) Information
regarding changes in the class of usage of the bed complement of a health care
facility [under section 323D-54(9);] 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;
[(2) Implementation
of services under section 323D-54;
(3)] (2) Projects that are wholly dedicated to meeting
the State's obligations under court orders, including consent decrees[,
under section 323D-54(10);] that have already determined that need for
the projects exists;
[(4)] (3) Replacement of existing equipment with an
updated or modern-day equivalent [under section 323D-54(11)];
[(5)] (4) Primary care clinics under the expenditure
thresholds [under section 323D-54(12);] referenced in section 323D-2;
and
[(6)] (5) Equipment and services related to that
equipment, that are primarily intended for research purposes as opposed to
usual and customary diagnostic and therapeutic care."
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)] (4) 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)] (5) Advise the state agency in the performance of
its specific functions[.];
[(7)] (6) Perform other such functions as agreed upon
by the state agency and the respective subarea councils[.]; and
[(8)] (7) 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-73, Hawaii Revised Statutes, is amended to read as follows:
"[[]§323D-73[]]
Notice; procedures. (a) Within five working days after receipt of a
complete application under section 323D-72, the agency shall give public notice
of the application in the affected county or counties where the hospital is
located and shall notify by first-class mail any person who has requested
notice of the filing of such applications.
The public notice shall state that a completed application has been
received, state the names of the parties to the agreement, describe the
contents of the application, and state the date by which a person may submit
written comments about the application to the agency.
(b) Within ninety days after receiving a complete application, the agency shall review the application in accordance with the standards set forth in this part and approve or disapprove the acquisition.
Within twenty days after receiving a complete application, the attorney general shall determine whether a review of the application in accordance with section 323D-76 is appropriate and notify the applicant if a review is warranted. If the attorney general determines that a review is unnecessary or not appropriate, then none of the other provisions of this part applicable to review by the attorney general shall apply.
[(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 regarding the certificate of need and its decision for purposes of the
sale of a hospital under this part.]"
SECTION 10. 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
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] before making
a decision on the application."
SECTION 11. Section 323D-75, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d)
Any affected person may appeal a final decision by the agency to the
reconsideration committee created under section [323D-47 under procedures
substantially similar to those for appeals of health care certificate of need
decisions...The reconsideration committee shall have the same powers and duties
with respect to appeals under this part as exist for appeals to the
reconsideration committee regarding issuance of certificates of need.] 323D- . The findings, conclusions, and decisions of
the reconsideration committee shall constitute the determination of the
agency. The agency, the applicant, or
any affected person who has intervened in the matter before the reconsideration
committee may seek judicial review of any agency determination."
SECTION 12. Section 323F-51, Hawaii Revised Statutes, is amended by amending the definition of "private entity" to read as follows:
""Private entity" means a business organization duly authorized to transact business in the State that:
(1) [Has a certificate of need to
operate] Operates one or more licensed hospitals in the State [obtained
from the state health planning and development agency pursuant to part V of
chapter 323D]; or
(2) Is the sole member of a nonprofit
management entity or hospital that [has a certificate of need to operate]
operates one or more licensed hospitals in the State [obtained from
the state health planning and development agency pursuant to part V of chapter
323D]."
SECTION 13. Section 323F-52, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a)
Notwithstanding any other
law to the contrary, including but not limited to section 27-1[,];
section 76-16(b) and other sections of chapter 76[,]; chapters
78, 89, 89A, 89C, and 171[, part V of chapter 323D,]; and
sections 323F-11 and 323F-31, the governor, with the assistance of the chief
executive officer of the corporation, and the regional chief executive officer
of the Maui regional system, or their designees, shall negotiate with a private
entity to transfer the right and responsibility to manage, operate and
otherwise provide health care services at one or more facilities of the Maui
regional system, including Maui memorial medical center, Kula hospital and
clinic, and Lanai community hospital, to a nonprofit management entity
wholly-owned by the private entity; provided that the private entity submitted
a statement of interest in response to a notice published in accordance with
section 1-28.5 by the Maui regional system board, inviting private entities to
submit statements of interest in acquiring the right and responsibility to
manage, operate and otherwise provide health care services in one or more of
the Maui regional system's facilities."
SECTION 14. 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
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] before
making a decision on the application."
SECTION 15. Chapter 323D, part V, Hawaii Revised Statutes, is repealed.
SECTION 16. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 17. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 18. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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