Hawaii-2020-SB2980-Introduced

SECTION 1. The legislature finds that the cost of living in Hawaii continues to rise, and the cost of health care contributes to this high cost of living. The legislature further finds that Vermont enacted legislation establishing a single-payer health care system at the state-level in 2011 but had abandoned the plan by 2014. Additionally, the California Assembly attempted to pass legislation for universal health care but was unable to because of the millions of taxpayer dollars required for such a program. A different approach must be taken to reduce the high costs of healthcare.

The legislature further finds that the human-induced global climate crisis requires thoughtful but bold response on many fronts to make Hawaii communities resilient to the impacts of climate change that threaten the very survivability of the State. Lest Hawaii lose its leadership position in meeting the future of labor, justice and equity, the legislature embraces aloha ‘āina as a Green New Deal to decarbonize Hawaii's systems of food, energy, and transportation and sequester carbon through systems of agriculture, waste management and ecosystem restoration. This solid foundation finds synergies with expanded access to health care, housing and education, multiplying good jobs and ensuring justice and equity for Hawaii's citizens. The following measure represents a forward step in mitigating and adapting Hawaii to inevitable change.

The purpose of this Act is to require the Hawaii health authority to establish a five-year all-payer health care pilot program in a county with a population greater than five hundred thousand.

SECTION 2. Chapter 322H, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . All-payer health care pilot program

§322H-A Definitions. As used in this part:

"Authority" means the Hawaii health authority.

"Payer" means any entity that pays or administers the payment of health insurance claims to providers in the State, including but not limited to health insurance companies, health maintenance organizations, mutual benefit societies, medicaid, and medicare.

"Pilot program" means the all-payer health care pilot program established pursuant to section 322H-B.

"Provider hospital" means a hospital licensed pursuant to section 321-14.5 that operates in a county with a population greater than five hundred thousand.

"Revolving fund" means the all-payer health care revolving fund.

§322H-B All-payer health care pilot program; established. (a) There shall be established an all-payer health care pilot program to be administered by the Hawaii health authority in collaboration with the department of health. The pilot program shall be applicable only to provider hospitals in a county with a population greater than five hundred thousand. The purpose of the pilot program shall be to ensure all payers with an existing relationship with a provider hospital pay the same standardized fees for a given service.

(b) Beginning on January 1, 2021, and on or before each January 1 until the end of the pilot program and notwithstanding any law to the contrary, any payer with an existing relationship with a provider hospital shall pay a mandatory contribution to the authority to be deposited into the all-payer health care revolving fund established pursuant to section 322H‑D. Contributions paid under this subsection shall be determined by the authority pursuant to section 322H‑C.

§322H-C All-payer payer contributions; calculations. (a) Contributions owed by a payer shall be determined by the authority. When calculating the contributions owed pursuant to this part, the authority shall consider each payer's subscriber population in relation to population of a county with a population greater than five hundred thousand, adjusted for the burden of illness in that payer's subscriber population.

§322H-D Budget. (a) On or before December 31, 2020, and on or before each December 31 thereafter until the end of the pilot program, all provider hospitals shall submit an operating budget to the authority for the following fiscal year.

(b) On or before June 30, 2021, and on or before each June 30 thereafter until the end of the pilot program, the authority, in collaboration with the department of health and the provider hospitals participating in the pilot program, shall establish a global county health care budget. The global county budget shall include:

(1) A global operating budget for all provider hospitals; provided that the global operating budget shall consider the following factors for each provider hospital:

(A) The quantity and type of all services provided by the provider hospital in the previous three-year period;

(B) The actual expenditures of the hospital in the hospital's most recent cost report;

(E) Wages for provider hospital employees, including all health care providers;

(F) Traditional rates billed for services provided by the provider hospital;

(G) Estimated operating expenses anticipated to meet community need; and

(H) Any other factors determined appropriate by the authority.

(2) A capital expenditures budget for each provider hospital, based on estimated costs associated with necessary construction or renovation of any facilities of the hospital; and

(3) A special projects budget to address certain needs of each provider hospital, including construction of new facilities, purchasing of major equipment, and hiring of providers to address any physician shortages.

(c) The authority shall review the county health budget prior to June 30 of each year and shall determine whether adjustments to the yearly county health budget are warranted, including consideration for additional funding for unanticipated items and services or market-shift adjustments.

§322H-E All-payer health care pilot program revolving fund; established. (a) There is established the all-payer health care revolving fund to be administered by the authority into which shall be deposited the contributions made by provider hospitals pursuant to section 322H-B.

(b) On or before July 1, 2021, and on or before every July 1 thereafter until the end of the pilot program, the authority shall pay to each provider hospital a lump sum based on the percentage of the global operating budget allocated to that provider hospital pursuant to section 322H-D.

(c) The authority may reserve moneys in the fund for payment of capital expenditures, payable to a provider hospital via a grant approved by the legislature and based on community need.

§322H-F Reporting requirement. (a) The authority, in collaboration with the department of health, shall submit initial progress reports to the legislature no later than twenty days prior to the convening of the regular sessions of 2022, 2023, and 2024. The progress reports shall include:

(1) The operating budget for each provider hospital for the relevant fiscal year;

(2) The global operating budget, determined pursuant to section 322H-D, for the relevant fiscal year;

(3) The contribution into the revolving fund by each payer, determined pursuant to section 322H-C, for the relevant fiscal year;

(4) All disbursements made out of the revolving fund;

(5) The current balance of the revolving fund; and

(6) Any proposed legislation.

(b) The authority, in collaboration with the department of health, shall submit a final report to the legislature no later than twenty days prior to the convening of the regular session of 2025. In addition to the requirements under subsection (a)(1) through (6), the final report shall include:

(1) Any approximant cost savings to each provider hospital and the State as the result of the program, including the fiscal impact on each provider hospital's operating budget and the State's budget; and

(2) A recommendation about whether to terminate, continue, or expand the pilot program.

§322H-G Rules. The authority shall adopt rules pursuant to chapter 91 necessary to carry out the purposes of this part."

SECTION 3. Chapter 322H, Hawaii Revised Statutes, is amended by designating sections 322H-1 through 322H-2 as part I and inserting a title before section 322H-1 to read as follows:

"PART I. GENERAL PROVISIONS"

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2020-2021 to implement the all-payer health care pilot program established pursuant to this Act.

The sum appropriated shall be expended by the Hawaii health authority for the purposes of this Act.

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. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2020, and shall be repealed on December 30, 2025.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2980
THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII