STAND. COM. REP. NO. 924-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2254
                                     S.D. 1
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Health, to which was referred S.B. No.
2254, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO PRIVACY OF HEALTH CARE
     INFORMATION,"

begs leave to report as follows:

     The purpose of this bill is to facilitate patient care
within a health care setting by clarifying that notification
requirements do not apply to the use or disclosure of protected
health information within an entity.

     The Hawaii Medical Services Association, the Hawaii Medical
Association, the Office of Information Practices (OIP), Kaiser
Permanente, the Healthcare Association of Hawaii, the American
Family Life Assurance Company of Columbus, and an individual
testified in support of this measure.

     The Privacy of Health Care Information Act, or Act 87,
Session Laws of Hawaii (SLH) 1999, ensures that an individual's
right to privacy will be protected when information is exchanged
between various parties that may be involved in an individual's
health care.

     Act 87, SLH 1999, is scheduled to go into effect on July 1,
2000.  That date was set to allow time to develop and implement
statewide regulations, and to react to federal legislation or
regulations pursuant to the Health Insurance Portability and

 
 
                                 STAND. COM. REP. NO. 924-00
                                 Page 2

 
Accountability Act (HIPAA), which, in addition to providing for
the portability of health care information, also addresses the
privacy of health care information, particularly electronic
information.

     When Act 87, SLH 1999, was passed, HIPAA privacy regulations
were expected to be finalized before the adjournment of the
Regular Session of 2000.  Due to delays, the draft of HIPAA's
privacy regulations were published on November 3, 1999, and are
not expected to be finalized until the Fall of 2000.  When
finalized, HIPAA regulations will preempt existing state law
unless state provisions are more stringent.

     Your Committee believes that it would be a waste of
resources to comply with one set of regulations pursuant to Act
87, SLH 1999, only to amend its procedures a short time later to
comply with HIPAA regulations.  By pushing back the
implementation date of Act 87, SLH 1999, to July 1, 2001, state
regulations can be coordinated with HIPAA regulations, as was the
original intent.

     Your Committee notes that during deliberations, OIP was
asked if they had any concerns or opposed pushing back the
implementation date.  At that time, there was no definitive
answer by OIP.

     Should OIP conclude that changing the implementation date
would be of concern, your Committee suggests that OIP address
their concerns at subsequent hearings of the Committees on
Consumer Protection and Commerce and Judiciary and Hawaiian
Affairs.

     Your Committee has amended this measure by:

     (1)  Changing the effective date of Act 87, SLH 1999, to
          July 1, 2001;

     (2)  Changing the effective date of the bill to June 30,
          2000; and

     (3)  Making technical, nonsubstantive amendments for
          purposes of clarity and style.

     As affirmed by the record of votes of the members of your
Committee on Health that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
2254, S.D. 1, as amended herein, and recommends that it pass

 
 
                                 STAND. COM. REP. NO. 924-00
                                 Page 3

 
Second Reading in the form attached hereto as S.B. No. 2254, S.D.
1, H.D. 1, and be referred to the Committees on Consumer
Protection and Commerce and Judiciary and Hawaiian Affairs.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Health,



                                   ______________________________
                                   ALEXANDER C. SANTIAGO, Chair