STAND. COM. REP. NO. 1568

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.R. No. 96
                                     




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

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred H.R. No. 96 entitled:

     "HOUSE RESOLUTION REQUESTING THE HAWAII PATIENT BILL OF
     RIGHTS AND RESPONSIBILITIES TASK FORCE TO MAKE A THOROUGH
     STUDY OF THE ISSUES RELATING TO THE USE OF THE TERM "MEDICAL
     NECESSITY" TO DETERMINE THE MOST APPROPRIATE DEFINITION OF
     "MEDICAL NECESSITY," OR TO DEVELOP NEW TERMS TO BETTER
     RESOLVE THE ISSUES EXAMINED,"

begs leave to report as follows:

     The purpose of this resolution is to request the Hawaii
Patient Bill of Rights and Responsibilities Task Force to study
and define the term "medical necessity".

     Testimony in support of this resolution was received from
the Department of Health and the Hawaii Medical Service
Association.  The Insurance Commissioner, on behalf of the
Department of Commerce and Consumer Affairs, testified to a
willingness to participate in the study.  The Hawaii Insurers
Council (HIC) provided comments, seeking clarification on whether
the study of the term "medical necessity" is restricted to
prepaid health care statutes, as opposed to workers'
compensation, automobile, and liability statutes.

     Addressing the issue raised by HIC, your Committee
emphasizes that this study is to evaluate issues relating to the
term "medical necessity" in the context of prepaid health care
insurance, and not workers' compensation, automobile, and

 
 
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                                 Page 2

 
liability insurance that is the domain of property and casualty
insurers.

     Your Committee finds that this study is much needed to
provide consistency and clarification for the many complex issues
surrounding the definition and application of a term which is
crucial both to quality of care and health care costs for
consumers.

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee concurs with the intent and purpose
of H.R. No. 96, and recommends that it be referred to the
Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair