Bill Text: HI SB1441 | 2025 | Regular Session | Introduced
Bill Title: Relating To The Transition Of The Oahu Regional Health Care System From The Hawaii Health Systems Corporation Into The Department Of Health.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2025-02-05 - The committee(s) on HHS recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in HHS were as follows: 4 Aye(s): Senator(s) San Buenaventura, Aquino, Hashimoto, Keohokalole; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Fevella. [SB1441 Detail]
Download: Hawaii-2025-SB1441-Introduced.html
|
TH1441E SENATE |
S.B. NO. |
|
|
THIRTY-THIRD LEGISLATURE, 2025 |
|
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
RELATING TO THE TRANSITION OF THE OAHU REGIONAL HEALTH CARE SYSTEM FROM THE HAWAII HEALTH SYSTEMS CORPORATION INTO THE DEPARTMENT OF HEALTH.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Act 212, Session Laws of Hawaii 2021, as amended by section 2 of Act 150, Session Laws of Hawaii 2022, is amended as follows:
1. By amending sections 2 and 3 to read:
"SECTION
2. [Section 323F-2, Hawaii Revised Statutes,
is amended by amending subsection (b) to read as follows:
"(b) The corporate organization shall be divided into
four regional systems, as follows:
(1) The Kauai regional health care system;
(2) The Maui regional health care system;
(3) The east Hawaii regional health care
system, comprising the Puna district, north Hilo district, south Hilo district,
Hamakua district, and Kau district; and
(4) The west Hawaii regional health care
system, comprising the north Kohala district, south Kohala district, north Kona
district, and south Kona district;
and shall
be identified as regional systems I, II, III, and IV, respectively."] Repealed.
SECTION
3. [Section 323F-3, Hawaii Revised Statutes,
is amended to read as follows:
"§323F-3 Corporation 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.
(b) The members of the corporation board shall be
appointed as follows:
(1) The director of health as an ex officio,
voting member;
(2) The four regional chief executive officers
as ex officio, nonvoting members;
(3) Three members who reside in the county
of Maui, two of whom shall be appointed by the Maui regional system board and one
of whom shall be appointed by the governor, all of whom shall serve as voting members;
(4) Two members who reside in the eastern
section of the county of Hawaii, one of whom shall be appointed by the East Hawaii
regional system board and one of whom shall be appointed by the governor, both of
whom shall serve as voting members;
(5) Two members who reside in the western
section of the county of Hawaii, one of whom shall be appointed by the West Hawaii
regional system board and one of whom shall be appointed by the governor, both of
whom shall serve as voting members;
(6) Two members who reside on the island
of Kauai, one of whom shall be appointed by the Kauai regional system board and
one of whom shall be appointed by the governor, both of whom shall serve as voting
members;
(7) One member who shall be appointed by
the governor and serve as an at-large voting member.
The
appointed board members who reside in the county of Maui, eastern section of the
county of Hawaii, western section of the county of Hawaii, and on the island of
Kauai shall each serve for a term of four years; provided that the terms of the
initial appointments of the members who are appointed by their respective regional
system boards shall be as follows: one of
the initial members from the county of Maui shall be appointed to serve a term of
two years and the other member shall be appointed to serve a term of four years;
the initial member from East Hawaii shall be appointed to serve a term of two years;
the initial member from West Hawaii shall be appointed to serve a term of four years;
and the initial member from the island of Kauai shall be appointed to serve a term
of two years; and provided further that the terms of the initial appointments of
the members who are appointed by the governor shall be four years. The at-large member appointed by the governor
shall serve a term of two years.
Any
vacancy shall be filled in the same manner provided for the original appointments. The corporation board shall elect its own chair
from among its members. Appointments to the
corporation board shall be as representative as possible of the system's stakeholders
as outlined in this subsection. The board
member appointments shall strive to create a board that includes expertise in the
fields of medicine, finance, health care administration, government affairs, human
resources, and law.
(c) The selection, appointment, and confirmation of
any nominee shall be based on ensuring that board members have diverse and beneficial
perspectives and experiences and that they include, to the extent possible, representatives
of the medical, business, management, law, finance, and health sectors, and patients
or consumers. Members of the board shall
serve without compensation but may be reimbursed for actual expenses, including
travel expenses, incurred in the performance of their duties.
(d) Any member of the board may be removed for cause
by vote of a two-thirds majority of the board's members then in office. For purposes of this section, cause shall include
without limitation:
(1) Malfeasance in office;
(2) Failure to attend regularly called meetings;
(3) Sentencing for conviction of a felony,
to the extent allowed by section 831-2; or
(4) Any other cause that may render a member
incapable or unfit to discharge the duties required under this chapter.
Filing nomination
papers for elective office or appointment to elective office, or conviction of a
felony consistent with section 831-3.1, shall automatically and immediately disqualify
a board member from office.
(e) Upon completion of the transition of the Oahu
regional health care system into the department of health, the corporation board
shall have no legal relationship with the Oahu regional health care system or its
facilities."] Repealed."
2. By amending sections 6 through 10 to read:
"SECTION
6. [(a) The budget of the Oahu regional health care system
shall be transferred from the Hawaii health systems corporation to the department
of health; provided that:
(1) The Oahu regional health care system's
budget codes and all related allocated funds of the Oahu region shall be reflected
in the state budget and all other related tables;
(2) The organizational structure of the Oahu
regional health care system shall remain unchanged, unless modified and approved
by the working group established pursuant to section 9 of this Act, and as approved
by the conditions established in this part or as required by law; and
(3) During the transition period, all]
All requests for operational funds necessary for the Oahu regional health
care system to maintain its operations at Leahi hospital and Maluhia shall be made
by the Oahu regional health care system and shall be submitted with budget requests
made by the Hawaii health systems corporation; provided further that, when appropriated,
funding for the Oahu regional health care system shall be designated under HTH 215,
the program ID assigned to the Oahu regional health care system.
[(b) The transfer of positions and respective class
specifications of the Oahu region from the Hawaii health systems corporation's personnel
system to the department of health, as set forth in the transition documents submitted
by the working group established pursuant to section 9 of this Act no later than
twenty days prior to the convening of the regular sessions of 2022 and 2025, shall
be completed no later than December 31, 2025; provided that:
(1) All employees of the Oahu region who
are employed as of December 31, 2025, shall be transferred to the department of
health before the transition of the Oahu regional health care system into the department
of health is complete;
(2) All employees of the Oahu region who
occupy civil service positions shall be transferred to the department of health
by this Act and retain their civil service status, whether permanent or temporary,
and shall maintain their respective functions as reflected in their current position
descriptions during the transition period; provided that any changes determined
necessary by the working group established pursuant to section 9 of this Act shall
follow standard union consultation process prior to implementation;
(3) Employees shall be transferred without
loss of salary; seniority, except as prescribed by applicable collective bargaining
agreements; retention points; prior service credit; any vacation and sick leave
credits previously earned; and other rights, benefits, and privileges, in accordance
with state employment laws;
(4) The personnel structure of the Oahu regional
health care system shall remain unchanged, unless modified and approved by the working
group and as approved by the conditions established pursuant to this Act;
(5) Any employee who, prior to this Act,
is exempt from civil service or collective bargaining and is transferred as a consequence
of this Act shall be transferred without loss of salary and shall not suffer any
loss of prior service credit, contractual rights, vacation or sick leave credits
previously earned, or other employee benefits or privileges, and, except in the
instance of discipline, shall be entitled to remain employed in the employee's current
position for a period of no less than one year after the transition of the Oahu
regional health care system into the department of health is complete;
(6) The wages, hours, and other conditions
of employment shall be negotiated or consulted, as applicable, with the respective
exclusive representative of the affected employees, in accordance with chapter 89,
Hawaii Revised Statutes; and
(7) The rights, benefits, and privileges
currently enjoyed by employees, including those rights, benefits, and privileges
under chapters 76, 78, 87A, 88, and 89, Hawaii Revised Statutes, shall not be impaired
or diminished as a result of these employees being transitioned to the department
of health pursuant to this Act. The transition
to the department of health shall not result in any break in service for the affected
employees. The rights, benefits, and privileges
currently enjoyed by employees shall be maintained under their existing collective
bargaining or other agreements and any successor agreement.]
SECTION
7. [(a) The Oahu regional board shall, through the Oahu
regional board chair, facilitate the transition of the Oahu region into the department
of health as part of the working group established pursuant to section 9 of this
Act and effectuate the assignment of all contracts and agreements in which the Oahu
region is a party to the department of health.
(b) Notwithstanding any law to the contrary, the terms
of the following members of the board of directors of the Hawaii health systems
corporation shall expire on December 31, 2025:
(1) The regional chief executive officer
of the Oahu regional health care system; and
(2) The two board members residing on the
island of Oahu appointed pursuant to section 323F-3(b)(7), Hawaii Revised Statutes.] Repealed.
SECTION
8. [(a) During the transition planning period commencing
on July 1, 2021, to and including the completion of the transition of the Oahu regional
health care system into the department of health no later than December 31, 2025,
the Oahu regional system board may:
(1) Develop and implement its own policies,
procedures, and rules necessary or appropriate to plan, operate, manage, and control
its facilities without regard to chapter 91, Hawaii Revised Statutes;
(2) Enter into and perform any contract,
lease, cooperative agreement, partnership, or other transaction whatsoever that
may be necessary or appropriate in the performance of its purposes and responsibilities,
and on any terms the regional system board may deem appropriate with either:
(A) Any agency or instrumentality of the
United States, or with any state, territory, possession, or 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;
(3) Conduct activities and enter into business
relationships the regional system board deems necessary or appropriate, including
but not limited to:
(A) Creating nonprofit corporations, including
but not limited to charitable fundraising foundations, to be controlled wholly by
the 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 agreements, with any public or private
entity; provided that any corporation, venture, or relationship entered into under
this subsection shall further the public interest;
(4) Execute, in accordance with all applicable
bylaws, rules, and laws, all instruments necessary or appropriate in the exercise
of any powers of the regional system board;
(5) Make and alter regional system board
bylaws and rules for its organization and management without regard to chapter 91,
Hawaii Revised Statutes;
(6) Enter into any contract or agreement
whatsoever, not inconsistent with the laws of the State, execute all instruments,
and do all things necessary or appropriate in the exercise of the powers granted
under chapter 323F, Hawaii Revised Statutes, including securing the payment of bonds;
provided that contracts or agreements executed by the regional system board shall
only encumber the regional subaccounts of the regional system board;
(7) Own, purchase, lease, exchange, or otherwise
acquire property, whether real, personal, or mixed, tangible or intangible, and
any interest therein, in the name of the regional system board; provided that the
regional system board shall be subject to the requirements of section 323F-3.5,
Hawaii Revised Statutes;
(8) Contract for and accept any gifts, grants,
and loans of funds or property, or any other aid in any form from the federal government,
the State, any state agency, or any other source, or any combination thereof, in
compliance, subject to chapter 323F, Hawaii Revised Statutes, with the terms and
conditions thereof; provided that the regional system board shall be responsible
for contracting for and accepting any gifts, grants, loans, property, or other aid
if intended to exclusively benefit the Oahu region public health facilities and
operations;
(9) Provide health and medical services to
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 regional system board or otherwise; provided that the regional system board
shall be responsible for conducting the activities under this paragraph solely within
the Oahu regional system;
(10) Approve medical staff bylaws, rules,
and medical staff appointments and reappointments for all public health facilities
of the regional system board, 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 regional system board, and adopting and
implementing reasonable rules, without regard to chapter 91, Hawaii Revised Statutes,
for the credentialing and peer review of all persons and health professionals within
the facility; provided that the regional system board shall be the governing body
responsible for all medical staff organization, peer review, and credentialing activities
to the extent allowed by law;
(11) Enter into any agreement with the State,
including but not limited to contracts for the provision of goods, services, and
facilities for the support of the regional system board's programs, and contracting
for the provision of services to or on behalf of the State;
(12) Develop 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 board shall enjoy the exemptions under
section 103‑53(e)
and chapter 103D, Hawaii Revised Statutes;
(13) Authorize, establish, and abolish positions;
and
(14) Employ or retain any attorney, by contract
or otherwise, for the purpose of representing the regional system board in any litigation,
rendering legal counsel, or drafting legal documents for the regional system board.
(b) During the transition period commencing on July
1, 2021, to and including the completion of the transition of the Oahu regional
health care system into the department of health no later than December 31, 2025,
the Oahu regional system board shall continue to enjoy the same sovereign immunity
available to the State.
(c) During the transition period commencing on July
1, 2021, to and including the completion of the transition of the Oahu regional
health care system into the department of health no later than December 31, 2025,
the Oahu regional system board shall be exempt from chapters 36, 37, 38, 40, 41D,
103D, 103F, part I of chapter 92, and section 102-2, Hawaii Revised Statutes.] Repealed.
SECTION
9. [(a) There is established a working group of the Oahu
regional health care system and department of health to develop, evaluate, and implement
any additional steps necessary to complete the transition of the Oahu regional health
care system into the department of health.
(b) The working group shall consist of the following
members:
(1) The director of health or the director's
designee, who shall serve as co-chair and who, along with the chair of the Oahu
regional system board or the chair's designee, shall have final authority over transfer
activities to be implemented by the working group;
(2) The chair of the Oahu regional system
board or the chair's designee, who shall serve as co‑chair and who, along with the
director of health or the director's designee, shall have final authority over transfer
activities to be implemented by the working group;
(3) The chief executive officer of the Oahu
regional health care system or the chief executive officer's designee;
(4) One or more department of health staff
members as deemed necessary by the director of health or the director's designee;
and
(5) One or more Oahu regional health care
system staff members as deemed necessary by the chief executive officer of the Oahu
regional health care system or the chief executive officer's designee.
(c) In addition, the working group shall include the
following members who shall serve in a consultative capacity:
(1) One representative from the behavioral
health administration of the department of health;
(2) One representative from the department
of human resources development;
(3) One representative from the department
of accounting and general services;
(4) One representative from the department
of the attorney general;
(5) One representative from the department
of budget and finance;
(6) One representative from the office of
planning;
(7) The chair of the Hawaii health systems
corporation board or the chair's designee;
(8) One representative from the Hawaii health
systems corporation human resources department;
(9) One representative from the Hawaii health
systems corporation finance department;
(10) One representative from the state procurement
office;
(11) One representative from the Hawaii Government
Employees Association, who shall be invited to participate;
(12) One representative from the United Public
Workers, who shall be invited to participate;
(13) Community representatives as recommended
and invited by the co-chairs; and
(14) Others as recommended and invited by
the co-chairs.
(d) In carrying out its purpose, the working group
shall develop a comprehensive business plan and transfer framework to govern and
manage the additional steps necessary to complete the transfer of the Oahu region
into the department of health. The comprehensive
business plan and transfer framework shall include but not be limited to the following:
(1) Preparation of a five-year pro forma
operating plan and budget for the continuing operations of Leahi hospital and Maluhia;
(2) Preparation of a ten-year pro forma capital
improvement plan and budget for the continuing operations of Leahi hospital and
Maluhia;
(3) Identification and preparation of proposed
legislation to address any matters not covered by this Act that may be necessary
to complete the transfer of the Oahu regional health care system into the department
of health;
(4) Identification of all real property,
appropriations, records, equipment, machines, files, supplies, contracts, books,
papers, documents, maps, and other property made, used, acquired, or held by the
Oahu regional health care system to effectuate the transfer of the same to the department
of health;
(5) Identification of all debts and other
liabilities that will remain with the Hawaii health systems corporation and the
remaining debts and liabilities to be transferred to the department of health;
(6) Identification of all contractual arrangements
and obligations of the Oahu regional health care system, including but not limited
to those related to personal service contracts, vendor contracts, and capital improvement
projects;
(7) Development and implementation of any
and all policies and procedures necessary to ensure that the facilities within the
Oahu regional health care system remain compliant with all federal, state, and local
laws and regulations; and
(8) Development and implementation of procedures
to extricate the Oahu regional health care system from system-wide services secured
or provided by the Hawaii health systems corporation or enable the Oahu region to
continue to utilize those services on a temporary or permanent basis through interagency
agreement.
(e) Members of the working group shall serve without
compensation but shall be reimbursed for reasonable expenses necessary for the performance
of their duties, including travel expenses.
No member of the working group shall be subject to chapter 84, Hawaii Revised
Statutes, solely because of the member's participation in the working group.
(f) The working group shall submit reports to the
legislature no later than twenty days prior to the convening of the regular sessions
of 2022 and 2025 that shall include the five-year pro forma operating and budget
plan, ten-year pro forma capital improvement plan, proposed legislation to address
any matters not covered by this Act that may be necessary to complete the transfer
of the Oahu regional health care system into the department of health, and a timeline
of major milestones necessary to effectuate the transfer of personnel, assets, liabilities,
and contracts needed to complete the transfer pursuant to this Act. The reports shall also document the completion
of the transfer and dissolution of the Oahu regional health care system.
(g) The working group shall be dissolved on December
31, 2025, or upon completion of the transition of the Oahu regional health care
system into the department of health, whichever is first.
(h) The working group may hold executive sessions
in compliance with the procedures set out in section 92-4, Hawaii Revised Statutes,
to discuss individually identifiable information that could affect patient privacy
or information that could identify prospective bidders.] Repealed."
SECTION
10. [All transition actions shall be subject
to the following conditions:
(1) The attorney general shall approve the
legality and form of any material transition actions created by the working group
prior to implementation; 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; the director of human resources development and comptroller
shall approve the transition of employee positions and payroll in accordance with
all applicable laws, rules, policies and procedures; and the director of accounting
and general services shall approve transition actions in accordance with all applicable
laws, rules, policies, and procedures; and
(2) Liabilities of the Oahu regional health
care system that were transferred to the Hawaii health systems corporation upon
its creation by Act 262, Session Laws of Hawaii 1996, or to the Oahu regional health
care system upon its establishment by Act 290, Session Laws of Hawaii 2007, and
all other contractual liabilities of the Oahu regional health care system, including
those related to collective bargaining contracts negotiated by the State in existence
at the time they are transferred to the department of health, shall become the responsibility
of the State.] Repealed."
3. By amending section 14 to read:
"SECTION
14. This Act shall take effect on July 1,
2021[; provided that part II of this Act shall take effect on December 31, 2025]."
PART II
SECTION 2. Section 323F-7.6, Hawaii Revised Statutes, is amended to read as follows:
"§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;
[(5) A division or branch under a state executive
department; or
[(6)] (5)
Any two or more of the entities in paragraphs (1) through [(5).] (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[; provided that under a transfer that
is effectuated pursuant to paragraph (5), real property shall transfer in its then-existing
state, whether in lease, fee, or otherwise, to the department of land and natural
resources]. 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; [provided
that under a transfer that is effectuated pursuant to subsection (a)(5), real property
shall transfer in its then-existing state, whether in lease, fee, or otherwise,
to the department of land and natural resources;]
(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."
SECTION
3. Chapter 321, part XLVI, Hawaii Revised
Statutes, is repealed.
PART
III
SECTION
4. The Oahu regional health care system and
the department of health shall enter into an agreement
regarding Oahu regional health care system providing care of low acuity patients
in the department of health's custody by December 31, 2025.
SECTION
5. Statutory material to be repealed is bracketed
and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect upon its approval.
|
INTRODUCED BY: |
_____________________________ |
|
|
BY REQUEST |
Report Title:
HHSC; DOH; Oahu Regional Health Care System; Transfer; Repeal; Low Acuity Patients; Agreement
Description:
Repeals the requirement to transfer the Oahu Regional Health Care System from the Hawaii Health Systems Corporation to the Department of Health. Repeals certain changes to the Hawaii Revised Statutes that were made by Act 212, SLH 2021. Requires the Oahu Regional Health Care System to enter into an agreement with the Department of Health regarding Oahu Regional Health Care System taking care of low acuity patients in the Department's custody by December 31, 2025.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
