Report Title:

Comprehensive health coverage

Description:

Establishes a system of comprehensive health coverage that allows workers' compensation, medical insurance, and no-fault personal injury protection coverages to use a single fee schedule and deliver services through managed care. Also establishes a pilot program for state and county employees to be administered by the Hawaii employer-union health benefits trust fund.

HOUSE OF REPRESENTATIVES

H.B. NO.

2615

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to COMPREHENSIVE HEALTH coverage.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The cost of workers' compensation and other forms of accident and sickness insurance continues to rise. The result is inevitable: employers will be forced to reduce costs, either by lowering the level of health care provided or by eliminating costs in other areas controlled by the employment contract. It is in the best interest of employers and employees to make a concerted effort toward controlling the unnecessary, systemic costs of providing employees with health care. This Act takes the first steps toward reform that will maximize efficiency and eliminate unnecessary administrative costs.

The purpose of this Act is to establish a system of comprehensive health coverage that allows workers' compensation, medical insurance, and no-fault personal injury protection coverages to use a single fee schedule and deliver services through managed care.

To provide an impetus for the development of the necessary administrative infrastructure for comprehensive health coverage plans and build an initial "pool of risks," this Act establishes a comprehensive health coverage pilot project. The project applies to state and county employees, whose health plans are exempt from federal regulation under the Employees Retirement Income Security Act.

Under the pilot project, the Hawaii employer-union health benefits trust fund will develop and offer comprehensive health coverage that creates an incentive for employee participation through a reduction in employee contributions. In exchange, the employee agrees to participate in a comprehensive plan that allows health care under workers' compensation to be provided with greater efficiency through managed care.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

COMPREHENSIVE HEALTH COVERAGE

§ -1 Definitions. For the purposes of this chapter:

"Board" means the comprehensive health coverage fee schedule board.

"Commissioner" means the state insurance commissioner.

"Director" means the director of labor and industrial relations.

"Employer" means any person having one or more persons in the person's employment. It includes the legal representative of a deceased employer and the State, any county or political subdivision of the State, and any other public entity within the State.

§ -2 Employer-provided comprehensive health coverage plan. (a) An employer may provide the health coverage required under chapter 87A, 386, or 393 through a contract of comprehensive health coverage.

(b) An employer providing health coverage under this section shall waive any challenge to the provisions of this chapter and the comprehensive health coverage plan that may be brought under title 29 United States Code section 1144 of the Employee Retirement Income Security Act of 1974.

(c) Section 386-21(b) shall not apply to a comprehensive health coverage plan.

(d) An employer's liability for health coverage provided under a comprehensive health coverage plan shall be limited to the charges set forth in the comprehensive health coverage fee schedule adopted by the board.

§ -3 Comprehensive health coverage fee schedule board. (a) There is established within the department of commerce and consumer affairs, for administrative purposes, a comprehensive health coverage fee schedule board. The board shall be composed of eleven members. The board shall include the commissioner or the commissioner's designee and the director or the director's designee. The remaining members shall be appointed by the governor from a list of names submitted by the speaker of the house of representatives and the president of the senate and shall serve terms as provided by section 26-34. Each of the following groups shall be represented by one member of the board:

(1) Small business;

(2) Private self-insured employers;

(3) State employees

(4) County employees;

(5) Hospitals;

(6) Health maintenance organizations;

(7) Mutual benefit societies;

(8) Insurers; and

(9) Health care providers.

(b) The board shall adopt a comprehensive health coverage fee schedule and update the schedule as needed, pursuant to chapter 91.

(c) The members of the board shall serve without compensation but shall be reimbursed for expenses necessary for the performance of their duties, including travel expenses.

§ -4 Comprehensive health coverage fee schedule. The comprehensive health coverage fee schedule shall consist of rates for medical care, services, and supplies. Fee schedule rates shall be the same for all providers of the same care, services, or supplies under a comprehensive health coverage policy. Fee schedule rates shall be reasonable rates, developed by an actuary or other consultant hired by the board, and based on a statistically valid survey of prevalent fees charged for services, which fees are actually received by providers of health care services."

SECTION 3. Section 386-21, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The liability of the employer for medical care, services, and supplies shall be limited to the charges computed as set forth in this section[.], except for medical care, services, and supplies provided under a comprehensive health coverage plan established pursuant to chapter , in which case the liability of the employer shall be limited to the charges as set forth in the comprehensive health coverage fee schedule.

The director shall make determinations of the charges and adopt fee schedules based upon those determinations. Effective January 1, 1997, and for each succeeding calendar year thereafter, the charges shall not exceed one hundred ten per cent of fees prescribed in the Medicare Resource Based Relative Value Scale system applicable to Hawaii as prepared by the United States Department of Health and Human Services, except as provided in this subsection. The rates or fees provided for in this section shall be adequate to ensure at all times the standard of services and care intended by this chapter to injured employees.

If the director determines that an allowance under the medicare program is not reasonable, or if a medical treatment, accommodation, product, or service existing as of June 29, 1995, is not covered under the medicare program, the director may, at any time, establish an additional fee schedule or schedules not exceeding the prevalent charge for fees for services actually received by providers of health care services to cover charges for that treatment, accommodation, product, or service. If no prevalent charge for a fee for service has been established for a given service or procedure, the director shall adopt a reasonable rate that shall be the same for all providers of health care services to be paid for that service or procedure.

The director shall update the schedules required by this section every three years or annually, as required. The updates shall be based upon:

(1) Future charges or additions prescribed in the Medicare Resource Based Relative Value Scale system applicable to Hawaii as prepared by the United States Department of Health and Human Services; or

(2) A statistically valid survey by the director of prevalent charges for fees for services actually received by providers of health care services or based upon the information provided to the director by the appropriate state agency having access to prevalent charges for medical fee information.

When a dispute exists between an insurer or self-insured employer and a medical service provider regarding the amount of a fee for medical services, the director may resolve the dispute in a summary manner as the director may prescribe; provided that a provider shall not charge more than the provider's private patient charge for the service rendered."

SECTION 4. Section 431:10C-103, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read:

""Comprehensive health coverage medical fee schedule" means the fee schedule adopted by the 24-hour health coverage fee schedule board under chapter ."

SECTION 5. Section 431:10C-302.5, Hawaii Revised Statutes, is amended to read as follows:

"§431:10C-302.5 Managed care [option.] and comprehensive health coverage options. (a) An insurer may offer, and provide at the option of the named insured, the personal injury protection benefits through managed care providers such as a health maintenance organization [or], preferred provider organization[.], or comprehensive health coverage plan that may include a managed care provider or providers. The option may include conditions and limitations to coverage, including deductibles and coinsurance requirements, as approved by the commissioner. The commissioner shall approve those conditions and limitations if the benefits are substantially comparable to or exceed the requirements of section 431:10C-103.5.

(b) An insurer offering the coverages authorized under subsection (a) shall demonstrate in rate filings submitted to the commissioner the savings to the insured to be realized under subsection (a)[.]; provided that this subsection shall not apply to comprehensive health coverage plans."

SECTION 6. Section 431:10C-308.5, Hawaii Revised Statutes, is amended to read as follows:

"§431:10C-308.5 Limitation on charges. (a) As used in this article, the term "workers' compensation supplemental medical fee schedule" means the schedule adopted and as may be amended by the director of labor and industrial relations for workers' compensation cases under chapter 386, establishing fees and frequency of treatment guidelines. References in the workers' compensation supplemental medical fee schedule to "the employer", "the director", and "the industrial injury", shall be respectively construed as references to "the insurer", "the commissioner", and "the injury covered by personal injury protection benefits" for purposes of this article.

(b) Where benefits are provided through a comprehensive health coverage plan, references to the workers' compensation supplemental medical fee schedule in subsections (c) through (f), and (h), and in section 431:10C-304(6) shall be construed as references to the comprehensive health coverage fee schedule.

[(b)](c) The charges and frequency of treatment for services specified in section 431:10C-103.5(a), except for emergency services provided within seventy-two hours following a motor vehicle accident resulting in injury, shall not exceed the charges and frequency of treatment permissible under the workers' compensation supplemental medical fee schedule. Charges for independent medical examinations, including record reviews, physical examinations, history taking, and reports, to be conducted by a licensed Hawaii provider unless the insured consents to an out-of-state provider, shall not exceed the charges permissible under the appropriate codes in the workers' compensation supplemental medical fee schedule. The workers' compensation supplemental medical fee schedule shall not apply to independent medical examinations conducted by out-of-state providers if the charges for the examination are reasonable. The independent medical examiner shall be selected by mutual agreement between the insurer and claimant; provided that if no agreement is reached, the selection may be submitted to the commissioner, arbitration or circuit court. The independent medical examiner shall be of the same specialty as the provider whose treatment is being reviewed, unless otherwise agreed by the insurer and claimant. All records and charges relating to an independent medical examination shall be made available to the claimant upon request. The commissioner may adopt administrative rules relating to fees or frequency of treatment for injuries covered by personal injury protection benefits. If adopted, these administrative rules shall prevail to the extent that they are inconsistent with the workers' compensation supplemental medical fee schedule.

[(c)](d) Charges for services for which no fee is set by the workers' compensation supplemental medical fee schedule or other administrative rules adopted by the commissioner shall be limited to eighty per cent of the provider's usual and customary charges for these services.

[(d)](e) Services for which no frequency of treatment guidelines are set forth in the workers' compensation supplemental medical fee schedule or other administrative rules adopted by the commissioner shall be deemed appropriate and reasonable expenses necessarily incurred if so determined by a provider.

[(e)](f) In the event of a dispute between the provider and the insurer over the amount of a charge or the correct fee or procedure code to be used under the workers' compensation supplemental medical fee schedule, the insurer shall:

(1) Pay all undisputed charges within thirty days after the insurer has received reasonable proof of the fact and amount of benefits accrued and demand for payment thereof; and

(2) Negotiate in good faith with the provider on the disputed charges for a period up to sixty days after the insurer has received reasonable proof of the fact and amount of benefits accrued and demand for payment thereof.

If the provider and the insurer are unable to resolve the dispute, the provider, insurer, or claimant may submit the dispute to the commissioner, arbitration, or court of competent jurisdiction. The parties shall include documentation of the efforts of the insurer and the provider to reach a negotiated resolution of the dispute.

[(f)](g) The provider of services described in section 431:10C-103.5(a) shall not bill the insured directly for those services but shall bill the insurer for a determination of the amount payable. The provider shall not bill or otherwise attempt to collect from the insured the difference between the provider's full charge and the amount paid by the insurer.

[(g)](h) A health care provider shall be compensated by the insurer for preparing reports documenting the need for treatments which exceed the workers' compensation supplemental medical fee schedule in accordance with the fee schedule for special reports. The health care provider may assess the cost of preparing a report to the insurer at no more than $20 per page up to a maximum of $75 for each report."

SECTION 7. Comprehensive health coverage pilot project. (a) In establishing the health benefits plan or plans under section 87A-16, Hawaii Revised Statutes, the board of trustees of the Hawaii employer-union health benefits trust fund shall include a plan or plans for comprehensive health coverage for all active employees entitled to medical care, services, and supplies under chapter 386, Hawaii Revised Statutes, and health benefits under chapter 87A, Hawaii Revised Statutes.

(b) The plan or plans shall:

(1) Include coverage for any of the employee's employee-beneficiaries and dependent-beneficiaries entitled to coverage under chapter 87A, Hawaii Revised Statutes;

(2) Provide for a reduction in employee contributions for health benefits in exchange for the employee's participation in managed care or other plans allowing greater efficiency in the provision of health benefits, as well as the provision of workers' compensation medical care, services, and supplies. The reduction shall be sufficient to create a substantial incentive for employee participation; and

(3) Make the plan or plans available to employees on or before .

SECTION 8. The legislative auditor, with the cooperation of the Hawaii-employer union health benefits trust fund and the department of labor and industrial relations, shall conduct a study of the comprehensive health coverage pilot project. The study shall include:

(1) A review of cost savings, if any, realized under the workers' compensation program as applied to active employees participating in comprehensive health coverage plan under the comprehensive health coverage pilot project; and

(2) Suggested legislation allowing cost savings to be reflected in comprehensive health coverage plan employee premiums.

The legislative auditor shall submit its findings and recommendations to the legislature no later than twenty days before the convening of the regular session of .

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2003; provided that sections 2 through 6 shall take effect on .

INTRODUCED BY:

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