STAND. COM. REP. NO. 374________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 325
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Health, to which was referred H.B. No. 325
entitled: 

     "A BILL FOR AN ACT RELATING TO HEALTH,"

begs leave to report as follows:

     The purpose of this bill is to protect health care consumers
by requiring medical directors of managed health care plans to be
licensed to practice medicine in Hawaii.

     The Hawaii Coalition for Health, the Hawaii Federation of
Physicians and Dentists, and the Hawaii Medical Association
submitted testimony in support of this measure.  The Hawaii
Medical Services Association submitted testimony in support of
the intent of this measure.  Queen's Health Management and
Queen's Health Plans submitted testimony in opposition of this
measure.

     Your Committee finds that because medical directors of
health plans make medical decisions which are clinical in nature,
rather than insurance or business decisions, they should be
subject to the standards and review of the state Board of Medical
Examiners in the same manner as practicing physicians.

     Your Committee has amended this measure by:

     (1)  Redefining the term "medical director" to mean the
          person who is authorized under a managed care plan and
          who makes decisions for the plan denying or allowing

 
 
                                 STAND. COM. REP. NO. 374________
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          requests for medical treatments, services, or supplies
          based on medical necessity or other appropriate medical
          standards; and

     (2)  Deleting the definition of "medical necessity".

     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 H.B. No.
325, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 325, H.D. 1, and
be referred to the Committee on Consumer Protection and Commerce.

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



                                   ______________________________
                                   ALEXANDER C. SANTIAGO, Chair