HOUSE OF REPRESENTATIVES

H.C.R. NO.

102

TWENTY-THIRD LEGISLATURE, 2006

 

STATE OF HAWAII

 
   


HOUSE CONCURRENT

RESOLUTION

 

REQUESTING THE HAWAII HEALTH SYSTEMS CORPORATION TO DISCLOSE OWNERSHIP INTERESTS IN ANY OF THE VENDORS WITH WHOM THE CORPORATION DOES BUSINESS.

 

WHEREAS, recently, there has been discussion of exempting the Hawaii Health Systems Corporation from the state procurement code, which may prove anti-competitive; and

WHEREAS, questions have also arisen that the Hawaii Health Systems Corporation may have an undisclosed ownership interest in one of the vendors with whom the Corporation does business; and

WHEREAS, in turn, this has raised the question of whether the Hawaii Health Systems Corporation is in compliance with the federal Health Care Anti-Kickback Act and the "safe harbor" regulations under the Medicare/Medicaid Anti-Kickback Law; and

WHEREAS, while activities outside of these safe harbors are not necessarily illegal, it is often unclear at what point conduct crosses the line between a legitimate practice and a violation of the Anti-Kickback Act; and

WHEREAS, the federal Health Care Anti-Kickback Act prohibits giving or receiving any remuneration to purchase, lease, order, arrange for, or recommend any drug that is reimbursable under a federal health care program; and

WHEREAS, however, there was concern that the broad sweep of the federal statute may prohibit vendors from paying fees to group purchasing organizations, which resulted in amendments to the statute specifically exempting vendor payments to group purchasing organizations; and

WHEREAS, in 1991, the Office of the Inspector General also issued a safe harbor rule protecting vendor payments to group purchasing organizations; and

WHEREAS, the amendments enacting the exemptions for vendor payments were made because these arrangements are considered beneficial and warrant protection under the Anti-Kickback Act; and

WHEREAS, a shareback refers to quarterly cash returned to health care group purchasing organizations as a reward for participation based upon a percentage of the actual gross dollars collected in connection with purchasing volumes and payment of administrative fees; and

WHEREAS, in order to clarify and determine whether the Hawaii Health Systems Corporation is in compliance with federal law, the Corporation should make certain disclosures; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2006, the Senate concurring, that the Hawaii Health Systems Corporation is requested to disclose its ownership interests in any of the vendors with whom the Corporation does business; and

BE IT FURTHER RESOLVED that the Hawaii Health Systems Corporation is requested to include the following in its disclosure:

(1) Name of vendor;

(2) Description of ownership; and

(3) Amount of any rebates, revenue sharing, shareback, or similar type of revenue return program involved with each vendor; and

BE IT FURTHER RESOLVED that the Hawaii Health Systems Corporation is requested to provide this disclosure to the Legislature and the Governor no later than twenty days prior to the convening of the Regular Session of 2007; and

 

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the President of the Hawaii Health Systems Corporation, the Governor, and the Director of Health.

 

 

 

OFFERED BY:

_____________________________

Report Title:

Hawaii Health Systems Corporation; Vendor Ownership Disclosure