Bill Text: HI HB1607 | 2010 | Regular Session | Introduced
Bill Title: Corporate Board Functions; Service and Coordination Group
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2009-05-11 - Carried over to 2010 Regular Session. [HB1607 Detail]
Download: Hawaii-2010-HB1607-Introduced.html
Report Title:
Corporate Board Functions; Service and Coordination Group
Description:
Restructures the Hawaii Health Systems Corporation so the Corporate Board takes on a new role as a service and coordination group to assist the Regional Boards in improving public hospital services.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1607 |
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TWENTY-FIFTH LEGISLATURE, 2009 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO HAWAII HEALTH SYSTEMS CORPORATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 323F, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§323F- Duties and powers of the corporate board. The corporate board shall be a central service and coordination group. The corporate board shall provide services for the regional system boards that shall include:
(1) Coordination and reporting of financial and other key operating information to the:
(A) Regional system boards;
(B) Department of health; and
(C) Legislature;
(2) Compliance audits under federal and state requirements;
(3) Operational audits;
(4) Other services as determined by the regional system boards, which may include:
(A) Information technology services and coordination;
(B) Purchasing and contracting services;
(C) Management of reimbursements to the corporation;
(D) Human resources and union negotiations;
(E) Legal resources; and
(F) Centralized billing services."
SECTION 2. Section 37-74, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) No appropriation transfers or changes between programs or agencies shall be made without legislative authorization; provided that:
(1) Authorized transfers or changes, when made, shall be reported to the legislature;
(2) Except with
respect to appropriations to fund financing agreements under chapter 37D, the
University of Hawaii shall have the flexibility to transfer appropriated funds
and positions for the operating cost category among programs, among cost elements
in a program, and between quarters, as applicable; except with respect to
appropriations to fund financing agreements under chapter 37D, the department
of education shall have the flexibility to transfer appropriated funds and
positions for the operating cost category among programs and among cost
elements in a program, and between quarters, as applicable; and the Hawaii
health systems corporation and its regional system boards shall have the
flexibility to transfer special fund appropriations among regional system
hospital facilities as applicable [and as mutually agreed to by the
corporation and] to the respective regional system [board;] boards;
provided that the Hawaii health systems corporation and the regional system
boards shall maintain the integrity and services of each individual regional
system and shall not transfer appropriations out of any regional system that
would result in a reduction of services offered by the regional system, with
due regard for statutory requirements, changing conditions, the needs of the
programs, and the effective utilization of resources; and
(3) The university and the department of education shall account for each transfer implemented under this subsection in quarterly reports to the governor and annual reports at the end of each fiscal year to the legislature and the governor, which shall be prepared in the form and manner prescribed by the governor and shall include information on the sources and uses of the transfer."
SECTION 3. Section 323F-1, Hawaii Revised Statutes, is amended by amending the definition of "corporation board" to read as follows:
"["Corporation] "Corporate
board" means the central service and coordination group under the
management of the regional system boards that acts as:
(1) A board of directors [of]
for the corporation; and
(2) A liaison between the corporation and administration and the legislature."
SECTION 4. Section 323F-3, Hawaii Revised Statutes, is amended by amending its title and subsections (a) and (b) to read as follows:
"§323F-3 [Corporation]
Corporate board. (a) The corporation shall be governed by a
fifteen-member board of directors that shall [carry out the duties and
responsibilities of the corporation other than those duties and
responsibilities relating to the establishment of any captive insurance company
pursuant to section [[]323F-7(c)(20)[]] and the operation thereof.] be a
central service and coordination group under the direction of the regional
system boards established in section 323F-3.5.
(b) Twelve
members of the [corporation] corporate board shall be appointed
as follows:
(1) Two members from regional system I who reside in the city and county of Honolulu shall be appointed by the governor from a list consisting of four individuals, two individuals submitted by the speaker of the house of representatives and two individuals submitted by the president of the senate within fifteen days of July 1, 2007; provided that this list shall not include physicians;
(2) Two members from regional system II who reside in the county of Kauai shall be appointed by the governor from a list consisting of four individuals, two individuals submitted by the speaker of the house of representatives and two individuals submitted by the president of the senate within fifteen days of July 1, 2007; provided that this list shall not include physicians;
(3) Two members from regional system III who reside in the county of Maui shall be appointed by the governor from a list consisting of four individuals, two individuals submitted by the speaker of the house of representatives and two individuals submitted by the president of the senate within fifteen days of July 1, 2007; provided that this list shall not include physicians;
(4) Two members from regional system IV who reside in the eastern section of the county of Hawaii shall be appointed by the governor from a list consisting of four individuals, two individuals submitted by the speaker of the house of representatives and two individuals submitted by the president of the senate within fifteen days of July 1, 2007; provided that this list shall not include physicians;
(5) Two members from
regional system V who reside in the western section of the county of Hawaii
shall be appointed by the governor from a list consisting of four individuals,
two individuals submitted by the speaker of the house of representatives and
two individuals submitted by the president of the senate within fifteen days of
July 1, 2007; provided that this list shall not include physicians; [[]and[]]
(6) Two additional
members who reside in the [State] state shall be appointed by the
governor.
The thirteenth and fourteenth members, who
shall serve as voting members, shall be physicians with active medical staff
privileges at one of the corporation's public health facilities. The physician
members shall each serve a term of two years. The initial physician members
shall be from regional system II, and subsequent physician members shall come
from regional systems IV, III, and V respectively. The physician member
positions shall continue to rotate in this order. The physician members shall
be appointed to the [corporation] corporate board by a two-thirds
majority vote of the [corporation] corporate board from a list of
qualified nominees submitted by the public health facility management advisory
committees or by any regional system board. If for any reason a physician
member is unable to serve a full term, the remainder of that term shall be
filled by a physician from the same regional system.
The fifteenth member shall be the director of health or the director's designee, who shall serve as an ex officio, voting member.
Appointments to the [corporation] corporate
board, with the exception of the chairperson of the executive public health
facility management advisory committee and the regional physician member, shall
be made by the governor, subject to confirmation by the senate pursuant to
section 26-34.
The appointed board members shall serve for a term of four years; provided that the first member appointed from each regional system shall be appointed for a term of two years.
Any vacancy shall be filled in the same manner
provided for the original appointments. The [corporation] corporate
board shall elect its own chair from among its members. Appointments to the [corporation]
corporate board shall be as representative as possible of the system's
stakeholders as outlined in this subsection."
SECTION 5. Section 323F-3.5, Hawaii Revised Statutes, is amended by amending subsection (a), (b), and (c) to read as follows:
"(a) There
[is] are hereby established [a] regional system [board]
boards of directors [to] that shall govern each of the
five regional systems specified in section 323F‑2, [no later than
January 1, 2008. The regional system boards of directors shall carry out the
duties and responsibilities as set forth in this chapter and as further
delegated by the corporation.] and shall carry out the duties and
responsibilities of the corporation other than those duties and
responsibilities relating to the establishment of any captive insurance company
pursuant to section 323F-7(c)(20) and the operation thereof.
(b) Upon its
establishment, a regional system board shall assume custodial care of all
financial assets, real property, including land, structures, and fixtures, or
other physical assets, such as personal property, including furnishings,
equipment, and inventory, of the corporation within its regional system. No
sale or encumbrance of any such real property or such other financial assets,
physical assets of the corporation shall be permitted without the mutual
consent of the Hawaii health systems [corporation] corporate
board and the appropriate regional system board. No additional debts or
liabilities or superior debts shall be added by the corporation to any regional
system board that would negatively impact the holders of bond notes. Each
regional system board shall be liable for any liabilities arising from
financial assets, real or personal property in its custodial care.
(c) Each regional
system shall be governed by a regional system board of directors to consist of
not less than seven members and not more than fifteen members, as determined by
the regional system board [after the initial regional system board is
established.].
(1) Each regional system board shall initially consist of twelve members to be appointed by the governor under section 26-34 or as provided in this section, as follows:
(A) Four members shall be appointed by the governor within thirty days of receipt of a qualified list of candidates as follows:
(i) Two members shall be chosen from a list of four individuals submitted by the speaker of the house of representatives within fifteen days of July 1, 2007; provided that this list shall not include physicians; and
(ii) Two members shall be chosen from a list of four individuals submitted by the president of the senate within fifteen days of July 1, 2007; provided that this list shall not include physicians;
(B) Four members shall be appointed by the governor within thirty days from a list of eight individuals nominated by the regional public health facility management advisory committee within fifteen days of July 1, 2007. These individuals may be medical and health care providers and professionals, consumers, and knowledgeable individuals in other appropriate areas such as business, finance, and law; provided that these individuals shall not be physicians currently in active practice;
(C) Three physicians shall be appointed by the governor within thirty days from a list submitted within fifteen days of July 1, 2007, of six physicians nominated by a majority vote of the medical staff of the public health facilities in the regional system present at a duly noticed meeting from a list of qualified candidates submitted by the medical executive committees in the regional system; and
(D) The [corporation]
corporate board chairperson or chairperson's designee shall serve as an
ex officio, nonvoting member of each regional system board;
(2) One member of each regional system board nominated by the speaker of the house of representatives, the president of the senate, and medical executive committees in a regional system shall be appointed for a term of two years;
(3) One member of each initial regional system board nominated by the regional public health facility management advisory committee for the regional system shall be appointed for a term of two years;
(4) The remaining members of each initial regional system board and all members appointed thereafter shall be appointed for terms of three years; and
(5) New regional system board members appointed to any regional system board after the initial regional system board shall be selected by a two-thirds affirmative vote of the existing regional system board members.
Except for the ex officio members of each regional system board, all other members of a regional system board shall be residents of the region. Each regional system board shall elect its own chair."
SECTION 6. Section 323F-6 Hawaii Revised Statutes, is amended to read as follows:
"§323F-6 Records. The corporation and each regional system board shall be subject to the requirements of chapter 92F, except that the following categories of government records shall not be required to be disclosed:
(1) Applications for
credentials or staff privileges at any of the [corporation's] regional
systems' medical facilities, records from peer review proceedings, and
medical records; and
(2) Marketing strategies, strategic plans, evaluations, assessments, negotiations, or rates and charges, the disclosure of which would raise the cost of procurement or give a manifestly unfair advantage to any competitor or to any person or entity seeking to do business or proposing to enter into an agreement with a regional system board, the corporation, or any of its facilities.
Any person denied access to any such government records shall have available the remedies specified in sections 92F-15 and 92F-15.5. Government records protected from disclosure by this section shall be subject to the interagency disclosure provisions of section 92F-19. Section 624-25.5 shall apply to this part notwithstanding anything to the contrary contained in this section."
SECTION 7. Section 323F-7, Hawaii Revised Statutes, is amended by amending its title and subsections (a), (b), and (c) to read as follows:
"§323F-7
Duties and powers of the [corporation and] regional system
boards. (a) [Notwithstanding any other law to the contrary and unless
otherwise specified, only those duties and powers related to corporation-wide
matters, including but not limited to corporation-wide budgeting, personnel
policies, procurement policies, fiscal policies, accounting policies, policies
related to affiliations, joint ventures and contracts, regulatory compliance,
risk management, continuing medical education programs, strategic planning, and
capital planning, including the issuance of revenue bonds in any amount, shall
be carried out by the corporation board in collaboration with the regional
system boards.] Duties and powers related to the operation of facilities
within each regional system, including but not limited to regional system and
facility budgeting, employment and removal of regional system and facility
personnel, purchasing, regional system strategic and capital planning,
organization, quality assurance, improvement and reporting, credentialing of
medical staff, and the issuance of revenue bonds in any amount with corporation
board approval, shall be carried out by the regional system boards, either directly
or by delegation to regional and facility administration. Unless otherwise
prohibited, the duties and powers granted to the corporation board may be
delegated to the regional system boards.
[(b) Duties and powers exercised by the regional system
boards under this chapter or delegated to the regional system boards by the
corporation board shall be consistent with corporation-wide policies. Wherever
appropriate, corporation-wide policies shall take into account differences
among regional systems and among types of facilities, particularly acute care,
critical access, and long-term care facilities within the system.
New corporation-wide policies, and major changes to
existing policies other than those changes mandated by legal or regulatory
requirements, shall be developed by the corporation board after consultation
with a policies committee. The policies committee shall be made up of
representatives of the corporation board and each regional system board or
designees of each board. The corporation board shall have two representatives
on this committee. The corporation board shall review and consider approval of
the policies within thirty days of transmittal by the policies committee or at
the next board meeting; provided that, if the policies committee fails to take
action within thirty days of receiving the proposed policy, the corporation
board may consider and adopt or reject or revise the policy. The regional
system boards and corporation board, as needed, may submit a request to the
committee to alter corporation-wide policies along with detailed justification
for the request. The regional system boards and the corporation board shall
collaboratively establish a procedure to further implement this section.]
(c) Notwithstanding any other law to the contrary, [the
corporation and any of the] each regional system [boards] board
shall exercise the following duties and powers:
(1) Developing [corporation-wide] policies,
procedures, and rules necessary or appropriate to plan, operate, manage, and
control the system of public health facilities and services within its own
regional system without regard to chapter 91; [provided that each
regional system board shall be responsible for its own policies, procedures,
and rules necessary or appropriate to plan, operate, manage, and control the
public health facilities within its own regional system consistent with
corporate policies;]
(2) Evaluating the need for additional health
facilities and services[; provided that each regional system board shall be
responsible for the evaluation within its own regional system;] within
its own regional system;
(3) Entering into and performing any contracts,
leases, cooperative agreements, partnerships, or other transactions whatsoever
that may be necessary or appropriate within its own regional system in
the performance of its purposes and responsibilities, and on terms the [corporation,
or] regional system boards, may deem appropriate, with either:
(A) Any agency or instrumentality of the United States, or with any state, territory, or possession, or with any subdivision thereof; or
(B) Any person, firm, association, partnership, or corporation, whether operated on a for-profit or not-for-profit basis;
provided that the transaction furthers the public
interest; [and provided further that if any dispute arises between any
contract, lease, cooperative agreement, partnership, or other transaction
entered into by the corporation and a regional system board with regard to
matters solely within that regional system, after July 1, 2007, the contract,
lease, cooperative agreement, partnership, or other transaction entered into by
the regional system board shall prevail; and provided further that such
agreements are consistent with corporation policies;]
(4) Conducting activities and entering into business
relationships as the [corporation board, or any] regional system board[,]
deems necessary or appropriate within its own regional system, including
but not limited to:
(A) Creating
nonprofit corporations, including but not limited to charitable fund-raising
foundations, to be controlled wholly by the [corporation, any] regional
system board, or jointly with others;
(B) Establishing, subscribing to, and owning stock in business corporations individually or jointly with others; and
(C) Entering
into partnerships and other joint venture arrangements, or participating in
alliances, purchasing consortia, health insurance pools, or other cooperative
arrangements, with any public or private entity; provided that any corporation,
venture, or relationship entered into under this section furthers the public
interest; provided further that this paragraph shall not be construed to
authorize [the corporation or] a regional system board to abrogate any
responsibility or obligation under paragraph (15);
[provided that
each regional system board shall be responsible for conducting the activities
under this paragraph in its own regional system consistent with policies
established by the corporation board];
(5) Participating in
and developing prepaid health care service and insurance programs and other
alternative health care delivery programs[,] within its own regional
system, including programs involving the acceptance of capitated payments
or premiums that include the assumption of financial and actuarial risk; [provided
that each regional system board shall be responsible for conducting the
activities under this paragraph in its own regional system consistent with
policies established by the corporation board;]
(6) Executing, in accordance
with all applicable bylaws, rules, and laws, all instruments necessary or
appropriate in the exercise of any powers of the [corporation or]
regional system boards;
(7) Preparing and
executing [all corporation-wide] budgets, policies, and procedures [or
any regional system budgets, policies, and procedures; provided that the
regional system boards shall submit their regional and facility budgets to the
corporation to be consolidated into a corporation-wide budget for purposes of
corporation-wide planning and appropriation requests. Regional system and
facility budgets shall be received by the corporation and shall be included in
the corporation-wide budget upon submittal to the corporation;] for
its own regional system;
(8) Setting rates and
charges for all services provided by the corporation within its regional
system without regard to chapter 91[; provided that the duty and power
of the corporation board shall be limited to approving the rates and charges
developed by the regional system boards for the regional system's facilities
and services. Rates and charges may vary among regional systems and facilities
and may be consolidated with the rates of other regional systems into one
charge master. Third-party payer contracts may be negotiated at the
corporation-wide level with input from the regional systems, taking into
consideration the rates set by the regional system boards]. For purposes
of securing revenue bonds, the [corporation or] regional system board
may covenant to set, and if necessary increase, rates and charges as needed to
pay debt service and related obligations plus a coverage factor;
(9) Developing a [corporation-wide]
regional system-wide hospital system that is subject to chapters 76 and
89; [provided that employment of regional system and facility personnel
shall be the responsibility of the regional system boards pursuant to
corporation-wide policies and procedures, applicable laws, rules, regulations,
and collective bargaining agreements;]
(10) Developing the [corporation's
corporation-wide capital and strategic plans or any] regional system
board's capital and strategic plans[; provided that each regional system
board shall be responsible for development of capital and strategic plans in
its own regional system that shall be consistent with, and incorporated into,
the overall corporation-wide plans; and provided further that the corporation
and each regional system board shall be entitled to undertake] and
undertaking the acquisition, construction, and improvement of property,
facilities, and equipment to carry out these capital and strategic plans;
(11) Suing and being
sued; provided that [only the corporation may sue or be sued; and provided
further that] the corporation and the regional system boards shall
enjoy the same sovereign immunity available to the State;
(12) Making and
altering [corporation board and] regional system board bylaws for its
organization and management without regard to chapter 91 and consistent with
this chapter; [provided that each regional system board shall be responsible
for the final approval of its regional system board bylaws;]
(13) Adopting rules
without regard to chapter 91 governing the exercise of the [corporation's or]
regional system boards' powers and the fulfillment of its purpose under this
chapter;
(14) Entering into any
contract or agreement whatsoever, not inconsistent with this chapter or the
laws of this State, and authorizing the [corporation,] regional system
boards[,] and chief executive officers to enter into all contracts,
execute all instruments, and do all things necessary or appropriate in the
exercise of the powers granted in this chapter, including securing the payment
of bonds; provided that [the corporation board shall delegate to a regional
system board its authority to enter into and execute contracts or agreements
relating to matters exclusively affecting that regional system; provided
further that a regional system board shall exercise this power consistent with
corporation-wide policies; and provided further that] contracts or
agreements executed by a regional system board shall encumber only the regional
subaccounts of that regional system board;
(15) Issuing revenue bonds up to $100,000,000 subject to the approval of the governor or the director of finance; provided that:
(A) All revenue bonds shall be issued pursuant to part III, chapter 39;
(B) [The corporation and any] Any
regional system board shall have the power to issue revenue bonds in any amount
without regard to any limitation in chapter 39; and
(C) [The corporation] Any regional
system board shall have the power to incur debt, including the issuance of
revenue bonds in any amount[, and the regional system boards shall have the
power to issue revenue bonds in any amount upon approval by the corporation
board];
(16) Reimbursing the
state general fund for debt service on general obligation bonds or reimbursable
general obligation bonds issued by the State for the purposes of [the
corporation or] any regional system board;
(17) Pledging or assigning
all or any part of the receipts, revenues, and other financial assets of [the
corporation or] the regional system [boards] board for
purposes of meeting or securing bond or health systems liabilities[;
provided that each regional system board shall be responsible for conducting
the activities under this paragraph in its own regional system]. Any
pledge or assignment by [the corporation or] any regional system board
to secure revenue bonds or health system liabilities shall be valid and binding
in accordance with its terms against the pledgor, creditors, and all others
asserting rights thereto from the time the pledge or assignment is made,
without the need of physical delivery, recordation, filing, or further act. [The
corporation shall not take or omit to take any act that would interfere with,
impair, or adversely affect any pledge of assignment by a regional system board
pursuant to this chapter.] In connection with issuing revenue bonds or
related obligations, consistent with corporation policies and procedures, any
regional system board may make such other covenants, binding on the regional
system board and the corporation, that the regional system board determines to
be necessary or appropriate to establish and maintain security for the revenue bonds
or related obligations;
(18) Owning, purchasing, leasing, exchanging, or otherwise acquiring property, whether real, personal or mixed, tangible or intangible, and of any interest therein, in the name of the corporation, which property is not owned or controlled by the State but is owned or controlled by the corporation; provided that:
(A) Regional
system boards shall have custodial control over facilities and physical assets
in their respective regional systems. A regional system board may own, purchase,
lease, exchange, or otherwise acquire property, whether real, personal or mix,
tangible or intangible, and of any interest therein[, other than property
owned or controlled by the corporation,] in the name of the regional system
board; provided further that a regional system board shall be subject to
section 323F-3.5; and
(B) Each regional system board shall be responsible for conducting the activities under this paragraph in its own regional system;
(19) Maintaining,
improving, pledging, mortgaging, selling, or otherwise holding or disposing of
property[,] within its own regional system, whether real,
personal or mixed, tangible or intangible, and of any interest therein, at any
time and manner, in furtherance of the purposes and mission of the [corporation
or any] regional system board; provided that [the corporation or]
any regional system board legally holds or controls the property in its own
name; provided further that other than to secure revenue bonds and related
obligations and agents, [the corporation or] any regional system board
shall not sell, assign, lease, hypothecate, mortgage, pledge, give, or dispose
of all or substantially all of its property; [and provided further that each
regional system board shall be responsible for conducting the activities under
this paragraph in its own regional system, and control over such property shall
be delegated to each regional system board;]
(20) Purchasing
insurance and creating captive insurers in any arrangement deemed in the best
interest of the [corporation,] the regional system board,
including but not limited to funding and payment of deductibles and purchase of
reinsurance; provided that only the [corporation] captive insurance
board established under section 323F-4.5 shall have the power to create
captive insurers to benefit public health facilities and operations in all
regional systems; and provided further that a regional system board may
purchase insurance for its regional system in collaboration with the other
regional systems and the corporation until captive coverage is provided by the [corporation;]
captive insurance board.
(21) Acquiring by
condemnation, pursuant to chapter 101, any real property required by the [corporation]
regional system board to carry out the powers granted by this chapter;
(22) Depositing any
moneys of [the corporation or] any regional system board in any banking
institution within or without the [State,] state, and appointing,
for the purpose of making deposits, one or more persons to act as custodians of
the moneys of [the corporation; or] any regional system board; [provided
that regional system boards may deposit moneys in banking institutions pursuant
to corporation-wide guidelines established by the corporation board;]
(23) Contracting for
and accepting any gifts, grants, and loans of funds, property, or any other aid
in any form in their respective regional systems from the federal
government, the State, any state agency, or any other source, or any
combination thereof, and complying, subject to this chapter, with the terms and
conditions thereof; [provided that the regional system boards shall be
responsible for contracting for and accepting any gifts, grants, loans,
property, or other aid if intended to benefit the public health facilities and
operations exclusively in their respective regional systems; and provided
further that all contracting for or acceptance of gifts, grants, loans,
property, or other aid shall be consistent with corporation-wide policies
established by the corporation board;]
(24) Providing health
and medical services for the public directly or by agreement or lease with any
person, firm, or private or public corporation, partnership, or association
through or in the health facilities of the [corporation or] regional
system boards in their respective regional systems or otherwise; [provided
that the regional system boards shall be responsible for conducting the
activities under this paragraph in their respective regional systems;]
(25) Approving medical
staff bylaws, rules, and medical staff appointments and reappointments for all
public health facilities [of the corporation or any regional system board,]
in their respective regional systems, including but not limited to
determining the conditions under which a health professional may be extended
the privilege of practicing within a health facility, [as determined by the
respective regional system board and consistent with corporate-wide policies,]
and adopting and implementing reasonable rules, without regard to chapter 91,
for the credentialing and peer review of all persons and health professionals
within the facility; [provided that regional system boards shall be] and
acting as the governing body responsible for all medical staff
organization, peer review, and credentialing activities to the extent allowed
by law;
(26) (A) Investing
any funds not required for immediate disbursement in property or in securities
that meet the standard for investments established in chapter 88 as provided by
[the corporation board or any] a regional system board; provided
that proceeds of bonds and moneys pledged to secure bonds may be invested in
obligations permitted by any document that authorizes the issuance or securing
of bonds; and provided further that the investment assists the corporation or
any regional system board in carrying out its public purposes; selling from
time to time securities thus purchased and held, and depositing any securities
in any bank or financial institution within or without the [State.] state.
Any funds deposited in a banking institution or in any depository authorized in
this section shall be secured in a manner and subject to terms and conditions
as [the corporation board or] a regional system board may determine,
with or without payment of any interest on the deposit, including without
limitation time deposits evidenced by certificates of deposit. Any bank or
financial institution incorporated under the laws of this State may act as
depository of any funds of the corporation or a regional system board and may
issue indemnity bonds or may pledge securities as may be required by [the
corporation or] a regional system board; [provided that regional
system boards may exercise the powers under this subsection with respect to
financial assets of the regional system consistent with corporation-wide
policies;] and
(B) Notwithstanding
subparagraph (A), contracting with the holders of any of its notes or bonds as
to the custody, collection, securing, investment, and payment of any moneys of
the corporation or a regional system board and of any moneys held in
trust or otherwise for the payment of notes or bonds and carrying out the
contract. Moneys held in trust or otherwise for the payment of notes or bonds
or in any way to secure notes or bonds, and deposits of such moneys, may be
secured in the same manner as moneys of the [corporation or] regional
system board, and all banks and trust companies are authorized to give security
for the deposits;
(27) Entering into any
agreement with the State, including but not limited to contracts for the
provision of goods, services, and facilities in support of the [corporation's
programs or the] regional system boards' programs, and contracting for the
provision of services to or on behalf of the State; [provided that the
regional system boards shall be responsible for entering into agreements to
provide goods, services, and facilities in support of programs in their
respective regional systems consistent with corporation-wide policies;]
(28) Having a seal and altering the same at a regional system board's pleasure;
(29) Waiving, by means that the corporation or a regional system board deems appropriate, the exemption from federal income taxation of interest on the corporation's or a regional system boards' bonds, notes, or other obligations provided by the Internal Revenue Code of 1986, as amended, or any other federal statute providing a similar exemption;
(30) Developing
internal policies and procedures for the procurement of goods and services,
consistent with the goals of public accountability and public procurement
practices, and subject to management and financial legislative audits; [provided
that the regional system boards shall be responsible for developing internal
policies and procedures for each of their regional systems consistent with the
corporation's policies and procedures; and further] provided that[:
(A) The
regional system boards and the corporate board shall enjoy the exemption under
section 103-53(e);
(B) The]
the regional system boards shall enjoy the [exemption] exemptions
under section 103-53(e) and chapter 103D[; and
(C) The
corporation shall be subject to chapter 103D];
(31) Authorizing and
establishing positions; provided that [regional system boards shall be
responsible for hiring and firing regional and facility personnel consistent
with corporation policies, except] a regional chief executive officer and
regional chief financial officer shall only be hired or dismissed upon the
approval of the regional system board [and the corporation board] as
further set forth in section 323F-8.5;
(32) Having and
exercising all rights and powers necessary or incidental to or implied from the
specific powers granted in this chapter, which specific powers shall not be
considered as a limitation upon any power necessary or appropriate to carry out
the purposes and intent of this chapter; [provided that the regional system
boards shall be responsible for having and exercising all powers and rights
with respect to matters in their regional systems consistent with the law;]
and
(33) Each regional system, through its regional system board, shall:
(A) Develop
policies and procedures necessary or appropriate to plan, operate, manage, and
control the day-to-day operations of facilities within the regional system [that
are consistent with corporation-wide policies];
(B) Exercise custodial control over and use of all assets of the corporation that are located in the regional system pursuant to this chapter; and
(C) Expend
funds within its approved regional system budget and expend additional funds in
excess of its approved regional system budget upon approval of the [corporation
board.] regional system board."
SECTION 8. Section 323F-8.5, Hawaii Revised Statutes, is amended as follows:
1. By amending its title and subsections (a) an (b) to read:
"[[]§323F-8.5[]]
Regional chief executive officer; exempt position. (a) Upon establishment,
[and until December 31, 2008,] a regional system board may appoint a
regional chief executive officer and regional chief financial officer whose
salary shall be set by the corresponding regional system board and may
discharge a regional chief executive officer or regional chief financial
officer for cause, consistent with subsection (b); provided that the position
shall be exempt from chapter 76 and section 26-35(a)(4). [Effective January
1, 2009, the hiring and firing of the regional chief executive officers shall
be subject to approval of both the regional system board and the corporation
board.] Each regional chief executive officer may also appoint, as
necessary, other personnel, exempt from chapters 76 and 89, to work directly
for the regional chief executive officer for the regional system and for the
corresponding regional system board.
(b) Any regional system board or its designee
may discharge its exempt personnel with or without cause; provided that removal
without cause shall not prejudice any contract rights of personnel[; and
provided further that the discharge of a regional chief executive officer shall
be limited to the reasons outlined in section 323F-3.5(e) up to December 31,
2008. Effective January 1, 2009, regional]. Regional chief
executive officers and other exempt personnel shall be subject to discipline,
including discharge, in accordance with duly executed contracts, laws governing
exempt personnel of the State, and regional system policies adopted in
accordance with [corporate] regional system board policies."
2. By amending subsection (d) to read:
"(d) Hiring, firing, compensation
packages, and other personnel actions with respect to employees not covered by
chapters 76 and 89 shall be governed by policies adopted by each regional
system board. [These policies and guidelines shall be consistent with
policies and guidelines adopted by the corporation board after consultation
with the regional system boards.]"
SECTION 9. Section 323F-9, Hawaii Revised Statutes, is amended to read as follows:
"§323F-9
Hiring of attorneys. The [corporation]
corporate board and regional system boards may employ or retain any attorney,
by contract or otherwise, for the purpose of representing the [corporation
or] regional system boards in any litigation, rendering legal counsel, or
drafting legal documents for the [corporation or] regional system
boards.
SECTION 10. Section 323F-10, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) On the transfer date, there shall be established within the corporation for each region, a public health facility management advisory committee to consist of nine members initially to be appointed by the chief executive officer of the corporation with the advice of the hospital administrators of the facilities in the affected regions. The members shall serve for a term of four years; provided that upon the initial appointment of the members, two shall be appointed for a term of one year, two for a term of two years, two for a term of three years, and three for a term of four years.
Following the initial appointments by the chief
executive officer of the [corporation] corporate board, any
vacancies on a regional committee shall be filled by a simple majority vote of
the members of the executive committee from a list of qualified nominees
submitted by the regional committee in which the vacancy occurred. If a
regional committee vacancy remains unfilled for more than thirty days, that
vacancy may be filled by the chief executive officer of the corporation.
Each regional management advisory committee shall include medical and health care providers, consumers, and knowledgeable individuals in other appropriate areas such as business and law; provided that at least one member shall be a physician with active medical staff privileges at one of the region's public health facilities. At least three members of the committee shall be consumers.
The management advisory committee for the East Hawaii region shall have three members who reside in the Ka‘u district, three members who reside in the Hamakua/North Hilo districts, and three members who reside in the South Hilo/Puna districts. The management advisory committee for the West Hawaii region shall have not less than three members who reside in the North Kohala/South Kohala districts.
Each regional committee shall select its own
chairperson and vice chairperson and shall adopt rules governing the terms for
removal of its chairperson from the executive management advisory committee.
In the event of a regional committee voting to remove its chairperson who
concurrently sits on the [corporation] corporate board, that vote
shall be unanimous. In the event of a regional committee voting to remove its
physician member from the [corporation] corporate board, that
vote shall also be unanimous. Each regional committee may also adopt other
rules as it may consider necessary for the conduct of its business.
The members of the regional committees shall serve without compensation, but shall be reimbursed for traveling expenses incurred in the performance of their duties. The corporation shall provide for the necessary expenses of the committees; provided that no expenses may be incurred without prior authorization by the chief executive officer.
(b) Each regional committee shall sit in an
advisory capacity to the chief executive officer on matters concerning the
formulation of regional operational and capital improvement budgets, and the
planning, construction, improvement, maintenance, and operation of public
health facilities within its respective jurisdiction and shall sit in an
advisory capacity to the governor on matters concerning the nominees for
positions on the [corporation] corporate board. Nothing in this
section shall be construed as precluding or preventing the committees from
coordinating their efforts and activities with the facility administrators
within their counties."
SECTION 11. Section 323F-10.5, Hawaii Revised Statutes, is amended by amending subsections (a), and (b) to read as follows:
"(a) There is established within the
corporation an executive public health facility management advisory committee
to consist of the chairpersons of each of the five regional public health
facility management advisory committees. The executive committee shall,
through its chairperson, represent the interests of all regional committees on
the [corporation] corporate board.
(b) The executive committee shall select its
own chairperson to serve on the [corporation] corporate board and
shall adopt rules governing the terms of office and removal from the [corporation]
corporate board. The executive committee shall also adopt rules
governing the terms of office for each of the five regional committee
chairpersons. The executive committee may also adopt other rules as it may
consider necessary for the conduct of its business."
SECTION 12. Section 323F-11, Hawaii Revised Statutes, is amended to read as follows:
"§323F-11
Executive branch; noninterference.
Notwithstanding any other law to the contrary, the governor and executive
branch agencies shall limit their responsibilities to that of review and
oversight when the [corporation or] regional system board receives
general funds from the State to subsidize the operating budgets of deficit
facilities. The governor and executive branch agencies shall not interfere
with the systemic change, capacity building, advocacy, budget, personnel,
system plan development, or plan implementation activities of [the
corporation or] any regional system board. The governor and executive
branch agencies shall not interfere with the ability of [the corporation or]
any regional system board to function as a multiple facility public
hospital system delivering health care services to the residents of the [State.]
state."
SECTION 13. Section 323F-21, Hawaii Revised Statutes, is amended as follows:
1. By amending subsections (a) through (f) to read:
"(a) There is created in the state treasury a special fund to be known as the health systems special fund, into which shall be deposited all fees, proceeds, reimbursements, and the like owed to or received by the corporation, any regional system board, and its facilities, except as herein provided. There shall be established within the special fund regional subaccounts for each regional system board upon its establishment. The special fund and the regional subaccounts shall be used solely to fulfill the purposes outlined in this chapter.
[The corporation and each] A
regional system board may establish and maintain, within the health systems
special fund or any regional subaccount, any other accounts that may be
necessary and appropriate to carry out its purposes and responsibilities.
[The corporation and any] A
regional system board may deposit moneys into trustee accounts for the purposes
of securing or issuing bonds.
[The corporation and] A regional
system [boards] board may provide reasonable reserves for any of
the following purposes:
(1) Insurance deductibles;
(2) The improvement, replacement, or expansion of [their]
its facilities or services;
(3) The securing of [the corporation's or]
regional system boards' bonds, notes, or other instruments of indebtedness; or
(4) Any other purpose [the corporation or the]
a regional system [boards deem] board deems necessary or
appropriate in the performance of [their] its purposes and
responsibilities.
(b) [The corporation board and] A
regional system [boards] board shall [collaboratively]
develop budgetary guidelines and annual operating and capital budgets for each
facility within its respective regional system, taking into account
anticipated surpluses from or subsidies to the facilities pursuant to the
annual guidelines described in this section, accumulated corporation and
regional reserves and accounts, subsidies, if any, that are determined to be
needed from the general fund, and other sources of corporation-wide and
regional income as may be identified. Two-year budgets will be approved for
regional system boards, in alignment with State of Hawaii biennium budgeting.
The corporate board shall not alter the two-year budget of a regional system [except:
(1) Where state general funding is reduced;
(2) An emergency exists; or
(3) There is a renegotiated budget approved
by a regional system board].
The [corporation and] regional system boards
shall [collaboratively] develop budgetary guidelines and negotiate with
each facility within its respective regional system reasonable
corporation administrative costs, including funds determined by [the
corporation or any] a regional system board to be needed from or
provided to each facility within its regional system to:
(1) Repay [corporation or] regional system
board debts;
(2) Provide subsidies to any facility within its regional system determined to be unable to fund from within that facility's programs and services deemed essential to community needs; and
(3) Maintain appropriate reserves.
(c) [The corporation and] A regional
system [boards] board shall [collaboratively] develop
annual [corporation] operating and capital budgets, taking into account
anticipated surpluses from or subsidies to the facilities within its
respective regional system pursuant to the annual guidelines described in
this section, accumulated corporation and regional system board reserves and
accounts, subsidies, if any, that are determined to be needed from the general
fund, and other sources of corporation-wide and regional system board income as
may be identified.
(d) Beginning with the first of the
legislative biennium budget years following the establishment of a regional
system board, and for each biennium period thereafter, the [corporation]
regional boards shall call together all the [regional systems through
representatives selected by each regional system board, and the] chairs of
the facility management advisory committees within their respective regional
systems, if any, to determine which services and functions should be
provided by the [corporation] regional system board for the next
biennium budget period, consistent with this chapter. As part of the biennium
budgeting process, [the corporation board and the representatives of]
each regional system, working through the [corporation] corporate
board regional representatives, shall agree upon an allocation methodology for
funding the agreed upon and statutorily created corporate services and
functions.
(e) The corporation may share in any
facility's surplus and may offset any facility's deficits as provided herein.
Any regional system board shall share in the surplus of any facility within the
regional system and shall offset any facility deficits within its regional
system. Operating surpluses of the regional system board shall be reinvested
in the operations of that regional system in any prudent manner; provided that
upon request, and subject to authorization by the regional system board, the
regional system board may share its surplus or resources with a facility
outside of the regional system to benefit the corporation-wide system of health
care. Obligations undertaken by a facility shall be paid only from funds of
that facility, unless the [corporation] corporate board, the
regional system board managing the facility, or an authorized agent explicitly
agrees to guarantee the obligation. Loans and other transfers may be made
between regional systems upon approval of the affected regional system boards
to assist in the cash flow and operations of the public health facilities.
(f) In accordance with each annual facility
budget, and subject to policies established by the [corporation] corporate
board and by each regional system board, each facility of the corporation and
regional system board, respectively, shall:
(1) Bill and collect for its services;
(2) Maintain bank accounts; and
(3) Pay for needed personnel, supplies, equipment, and other operational and capital expenditures."
2. By amending subsection (h) to read:
"(h) The [corporation] corporate
board and regional system boards may hold public informational meetings on
their budgets. Representatives of any county government, state government, or
any other person having an interest in the budget, shall have the right to be
heard at the meetings."
SECTION 14. Section 323F-22, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) The corporation shall engage
a certified public accountant to conduct an annual audit of its financial
affairs, books, and records in accordance with generally accepted accounting
principles. The corporation, in consultation with a regional system board, may
permit or require a regional system board to retain an audit firm to conduct an
independent audit of the regional system. Each regional system board shall
submit the results of the annual audit to the [corporation] corporate
board within one hundred twenty days after the close of the regional system
board's fiscal year. The corporation shall submit to the governor and the legislature,
within one hundred fifty days after the close of the corporation's fiscal year,
a report that shall include the audited financial report for that fiscal year
for the corporation and each regional system board."
SECTION 15. Section 323F-7.5, Hawaii Revised Statutes, is repealed:
["[§323F-7.5] Regional system boards; delegated authority.
If the Hawaii health systems corporation board is unable to act on important
transactions in as timely a manner as the chairperson of the corporation board
deems reasonable, the chairperson of the corporation board may further delegate
authority to the regional system boards to take action on specific matters."]
SECTION 16. Section 323F-3, Hawaii Revised Statutes, is repealed:
["§323F-8
Chief executive officer; exempt positions. (a) The corporation board may appoint, exempt from
chapter 76 and section 26-35(a)(4), a chief executive officer of the
corporation whose salary shall be set by the corporation board. The chief
executive officer may also appoint up to eighteen other personnel, exempt from
chapters 76 and 89, to work directly for the chief executive officer and the
corporate board.
(b) The corporation board or its designee may
discharge its exempt personnel with or without cause; provided that removal
without cause shall not prejudice any contract rights of personnel.
(c) The corporation's chief executive officer or the
chief executive officer's designee may appoint, exempt from chapters 76 and 89,
hospital administrators, assistant administrators, directors of nursing,
medical directors, and staff physicians, to facilitate the management of
facilities within the corporation; provided that directors of nursing appointed
before July 1, 1998, may maintain their civil service status as provided in chapter
76 by so communicating in writing to the chief executive officer by October 31,
1998. Hospital administrators and assistant administrators appointed before
July 1, 1983, may maintain their permanent civil service status as provided in
chapter 76.
(d) Hiring, firing, compensation packages, and other
personnel actions with respect to employees not covered by chapter 76 and 89
shall be governed by policies and guidelines established by the corporation,
except as otherwise provided in this chapter.
(e) Upon the establishment of a regional system
board, the authority to appoint regional hospital administrators, assistant
administrators, directors of nursing, medical directors, and staff physicians
under subsection (c) shall be superseded by section 323F-8.5 for that regional
system. No incumbent personnel shall lose a position without specific action
taken by the regional system board."]
SECTION 17. Sections 26-35.5, 76-11, 89-2,89C-1.5,323F-4, 323F-4.5, 323F-5, Hawaii Revised Statutes, are amended by substituting the words "corporate board" or like terms wherever the words "corporation board" or like terms occur as the context requires.
SECTION 17. (a) It is the intent of this Act that the ability of the Hawaii health systems corporation to carry out its mission and improve the quality and efficiency of care in all of its regional systems will be enhanced by the delegation to community-based, regional system boards the control over the assets, personnel, services, and operations of the corporation. This regional control shall be delegated to the regional system boards within a reasonable period of time following the effective date of this Act. This Act shall be construed with this intent.
(b) Following a transition period of no longer than one year after this Act taking effect, each regional system board the control over the assets, personnel, services, and operations of the Hawaii health systems corporation with regard to the respective regional system shall be transferred to the appropriate regional system board. The corporate board shall assist as directed by any regional system board in transitioning regional control of Hawaii health system corporation operations within the respective regional systems. Transition shall take no longer than one year, unless a longer period is agreed to by the regional system board.
(b) No officer or employee of the State having tenure shall suffer any loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefit or privilege as a consequence of this Act, and such officer or employee may be transferred or appointed to a civil service position without the necessity of examination; provided that the officer or employee possess the minimum qualifications for the position to which transferred or appointed; and provided that subsequent changes in status may be made pursuant to applicable civil service laws.
(c) During any transition period or until a methodology for funding regional system services and functions as provided for in section 323F-21, Hawaii Revised Statutes, is developed, the Hawaii health systems corporation shall continue to provide to any regional system board services that the Hawaii health systems corporation provides to any of its facilities as of April 1, 2009, and may charge an amount consistent with charges levied on other facilities within the system for such services. In the event there is a service provided by the corporation to only one regional system, and the regional system board determines that it does not need the service during this interim period, the regional system board may terminate the service upon one hundred eighty days written notice to the corporate board.
SECTION 18. 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 2009-2010 to support the necessary transfer in services and regional control from Hawaii health systems corporation's corporate board to the regional system boards.
The sum appropriated shall be expended by the regional system boards of the Hawaii health systems corporation for the purposes of this Act.
SECTION 19. All acts passed prior to or during this regular session of 2009, whether enacted before or after passage of this Act shall be interpreted to conform to this Act, unless the acts specifically provide that this Act is being amended. In so far as this Act is inconsistent with any other law, this Act shall control.
SECTION 20. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 21. This Act shall take effect on July l, 2009.
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