Bill Text: HI HB2192 | 2014 | Regular Session | Introduced

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Bill Title: Hawaii Health Systems Corporation; Transition Guidelines; Nonprofit Corporation; Retirement Benefits

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2014-01-27 - Referred to HLT, LAB, FIN, referral sheet 6 [HB2192 Detail]

Download: Hawaii-2014-HB2192-Introduced.html

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HOUSE OF REPRESENTATIVES	H.B. NO.	2192
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to the hawaii health systems corporation.

 

 

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

 

PART I

     SECTION 1.  The legislature finds that the continued financial challenges faced by the Hawaii health systems corporation and the State pose a risk to the public health services provided by the corporation.  These factors also hinder efforts to improve the quality of health care services provided in many of the State's rural communities.

     The legislature further finds that since 1971, reports to the legislature have recommended the establishment of a hospital system for accomplishing the management, planning, and control functions of public hospitals in the State.  Studies have recommended the establishment of a hospital authority, a public benefit corporation, or a nonprofit corporation to accomplish these functions.

     The legislature additionally finds that Act 182, Session Laws of Hawaii 2009, authorized the regional systems or individual facilities of the Hawaii health systems corporation to transition into a new legal entity, including a nonprofit corporation, to improve the efficiency of the hospital system and benefit the health care of the people of the State.

     The legislature recommends that the transition first authorized in 2009 be carefully evaluated with input from community representatives, including medical and health care providers and professionals, hospital and facility staff, consumers in the affected regions, and knowledgeable individuals in appropriate areas such as business, finance, and law.

     The purpose of this Act is to establish guidelines for the transitioning of the Hawaii health systems corporation, a regional system, or a combination of regional systems to a more economically efficient system to promote the delivery of high quality health care in the communities being served, while reducing or eliminating the need for state subsidies during the transition.

PART II

     SECTION 2.  Chapter 323F, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part    .  TRansition of hawaii health systems corporation, regional system, or combined regional system

     §323F-A  Hawaii health systems corporation; transition authority.  Notwithstanding any other law to the contrary, the corporation, a regional system, or a combined regional system of two or more regional systems may transition to a nonprofit corporation through the sale, lease, or transfer of the assets of the corporation, regional system, or combined regional system, to implement a more economically efficient system of health care delivery in the communities being served; provided that any real property shall only be transferred by lease.

     §323F-B  Transition board; combined regional system board.  (a) The transition board of directors shall be:

     (1)  The corporation board, for the transitioning of the Hawaii health systems to a nonprofit corporation; and

     (2)  The regional system board, for the transitioning of one of the regional systems to a nonprofit corporation.

     (b)  For the transitioning of two or more regional systems into a combined regional system nonprofit corporation, the combined regional system board shall consist of twelve members with an equal number of members appointed by each of the regional system boards in the combined regional system.  All members of the combined regional system board shall be residents of the region they represent.  The terms of the members of the combined regional system board shall be four years.  New members of a combined regional system board shall be selected by a two-thirds affirmative vote of the existing combined regional system board members.

     §323F-C  Transition board, combined regional system board; powers.  The transition board and combined regional system board shall:

     (1)  Give notice inviting nonprofit corporations, with expertise and experience in operating an integrated clinical health care delivery system, to submit a transition plan for the transformation of the management structure and health care delivery system of the corporation, regional system, or combined regional systems pursuant to the transition plan criteria in section 323F-D;

     (2)  Evaluate the transition plans and any other pertinent information submitted;

     (3)  Consult with the medical staff, hospital staff, and the affected communities on the transition plans that have been submitted;

     (4)  Based on the transition board and combined regional system board's findings, select a transition plan that meets the requirements of section 323F-D;

     (5)  Enter into contracts, leases, agreements, or other transactions with the selected nonprofit corporation to execute the transition plan selected by the corporation board, regional system board, or combined regional system board to operate, manage, and control the public health facilities in the region or regions;

     (6)  Monitor the execution of the transition plan by the selected nonprofit corporation and develop measures to determine the effectiveness of the nonprofit corporation in achieving the outcomes proposed in the transition plan;

     (7)  If general funds are requested by the selected nonprofit during the period of transition, submit to the legislature a proposed budget for which the funds are to be used;

     (8)  After the period of transition, monitor the activities of the selected nonprofit to ensure:

         (A)  The basic health needs of the communities being served are fulfilled through the provision of adequate and accessible services and facilities; and

         (B)  The efficient execution of budgeting, personnel, procurement, fiscal, capital planning, and accounting policies;

     (9)  Approve the issuance of revenue bonds, as provided in section 323F-7(c)(15)(A) and (B); and

    (10)  Submit an annual report to the legislature twenty days prior to the convening of each regular session on the achievements of the selected nonprofit in meeting the goals proposed in the transition plan and the health care needs of the communities being served.

     §323F-D  Transition plan; criteria.  (a)  The corporation board, regional system board, or combined regional system board shall develop the criteria for evaluating and selecting a plan for the transitioning of the corporation, a regional system, or a combined regional system to a nonprofit corporation.  The transition plan shall include requirements for:

     (1)  A governance and management structure that will improve the performance of the hospitals and facilities of the corporation, regional system, or combined regional systems;

     (2)  Applying efficiencies of scale, consolidation of shared services, and administrative and technological expertise to improve the health care performance of the hospitals and facilities of the corporation, regional system, or combined regional system;

     (3)  Implementing of the operational efficiencies and a financial structure that will reduce or eliminate the need for state subsidies during the period of transition;

     (4)  Establishing a personnel system that is exempt from title 7; provided that the rights of the employees under article XIII, section 1, of the state constitution shall not be abridged; and provided further that the compensation of any employees of the corporation, regional system board, or a combined regional system board of two or more regional systems shall not be lower in any transition plan that is submitted; and

     (5)  Protecting and promoting the health care needs of the areas being served and delivering a high quality of clinical care and patient services.

     (b)  To develop the criteria for the transition plan, the corporation board, regional system board, or combined regional system board shall consider:

     (1)  Issues relating to the decline of revenues and growth of expenses;

     (2)  Implementation of measures to more effectively and efficiently administer the delivery and monitoring of health care;

     (3)  Required improvements to the physical facilities of the system to more efficiently deliver health care in the communities being served; and

     (4)  Workforce requirements to maintain, improve, or expand health care in the communities being served.

     §323F-E  Attorney general, director of finance; approval.  The attorney general shall approve the legality and form of any transition plan selected by the corporation board, regional system board, or a combined regional system of two or more regional system boards, and the director of finance shall evaluate and approve any expenditure of public funds determined to be in accordance with the budget laws and controls in force.

     §323F-F  Liabilities; period of transition.  (a)  Any and all liabilities of the corporation, regional system, or combined regional system transitioning into a nonprofit corporation that were transferred to the Hawaii health systems corporation upon its creation by Act 262, Session Laws of Hawaii 1996, and all liabilities of the corporation, regional system, or combined regional system related to collective bargaining contracts negotiated by the State, shall become the responsibility of the State.

     (b)  As used in this section, "period of transition" means the time in the transition plan submitted by the selected nonprofit corporation during which structural, operational, and financial changes are implemented by the selected nonprofit corporation to promote the delivery of high quality health care in the areas being served, while reducing or eliminating the need for state subsidies."

     SECTION 3.  Section 323F-7.6, Hawaii Revised Statutes, is repealed.

     ["[§323F-7.6]  Transition of Hawaii health systems regional system or health facility to a new entity.  (a)  Notwithstanding any other law to the contrary, including but not limited to section 27-1 and chapter 171, any of the regional systems or individual facilities of the Hawaii health systems corporation is hereby authorized to transition into a new legal entity in any form recognized under the laws of the State, including but not limited to:

     (1)  A nonprofit corporation;

     (2)  A for-profit corporation;

     (3)  A municipal facility;

     (4)  A public benefit corporation; or

     (5)  Any two or more of the entities in paragraphs (1) through (4).

A transition shall occur through the sale, lease, or transfer of all or substantially all of the assets of the facility or regional system, except for real property which shall only be transferred by lease.  Any transition shall comply with chapter 323D.

     (b)  A transition shall only occur upon approval of the appropriate regional system board in the case of a regional system or individual facility transition, or upon approval of the regional system boards and the corporation in the case of the transition of the entire corporation.  Any transition shall be subject to legal review by the attorney general who shall approve the transition if satisfied that the transition conforms to all applicable laws, subject to the review of the director of the department of budget and finance who shall approve the transition if it conforms to all applicable financing procedures, and subject to the governor's approval.  In addition the transition shall be subject to the following terms and conditions:

     (1)  All proceeds from the sale, lease, or transfer of assets shall be used for health care services in the respective regional system or facility, except that real property shall only be transferred by lease;

     (2)  Any and all liabilities of a regional system or facility transitioning into a new entity that were transferred to the Hawaii health systems corporation upon its creation by Act 262, Session Laws of Hawaii 1996, and all liabilities of the regional system or facility related to collective bargaining contracts negotiated by the State, shall become the responsibility of the State; and

     (3)  During the period of transition:

         (A)  The State shall continue to fund the provision of health care services provided for by the regional system or individual facility; and

         (B)  All applicable provisions of this chapter shall continue to apply.

     Upon the completion of the transition of all the facilities in a regional system to a new entity, the regional system board for that regional system shall terminate; provided that if not all of a regional system's facilities are transitioned to a new entity, the existing regional system board shall not terminate but shall continue to retain jurisdiction over those facilities remaining in the regional system."]

PART III

     SECTION 4.  Retirement benefit.  (a) Any employee who is a vested member of the employees' retirement system may elect to receive the retirement benefit provided in subsection (c), in lieu of exercising any reduction-in-force rights under chapter 89 or 89C, Hawaii Revised Statutes, as applicable.  To receive the retirement incentive benefit offered under this section, the employee shall comply with the application requirements specified in subsection (b).

     (b)  Any employee who elects to receive the retirement benefit under subsection (c) shall file an application with the employees' retirement system.

     (c)  An employee member, who became a member before July 1, 2012, may receive a retirement allowance as provided in this section.  The retirement allowance shall be calculated as provided in section 88-74, Hawaii Revised Statutes; provided that on the employee's retirement date, the employee meets any one of the following criteria:

     (1)  Has at least ten years of credited service and is at least fifty-five years of age;

     (2)  Has at least twenty years of credited service, irrespective of age;

     (3)  Has at least ten years of credited service as a noncontributory class C member and is at least fifty-seven years of age; or

     (4)  Has at least twenty-five years of credited service as a noncontributory class C member, irrespective of age.

     (d)  Any employee member who is separated from service as a result of the transition of the corporation, a regional system, or a combined regional system into a nonprofit corporation, upon application, shall be eligible to receive the member's accumulated benefits as provided in section 88-96, Hawaii Revised Statutes.

     (e)  The retirement benefit proposed in this part shall be approved by the director of finance.

PART IV

     SECTION 5.  In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.

     SECTION 7.  This Act shall take effect upon its approval.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Hawaii Health Systems Corporation; Transition Guidelines; Nonprofit Corporation; Retirement Benefits

 

Description:

Establishes guidelines for the transition of the Hawaii health systems corporation, a regional system, or a combination of two or more regional systems, into a nonprofit corporation.  Proposes certain retirement benefits for employee of the Hawaii health systems corporation who are employees' retirement system members.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.