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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1112 |
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TWENTY-EIGHTH LEGISLATURE, 2015 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE HAWAII HEALTH SYSTEMS CORPORATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
PART I
SECTION 1. The legislature finds that the State's community hospital system, the Hawaii health systems corporation, provides essential hospital and long-term care services, in addition to physician and other health care services throughout the State. Hawaii health systems corporation facilities are often the only hospitals and emergency care providers in many rural communities. Due to rapid changes taking place in the health care industry, the legislature acknowledges that the governing structure of our public hospital system must provide the appropriate flexibility and autonomy needed to compete and remain viable and to respond to the needs of the specific communities served, by furthering the development of centers of excellence in health care.
The current administrative arrangement places the public hospital system in a single statewide public agency, the Hawaii health systems corporation, which operates with some autonomy from the executive branch. This arrangement is the result of landmark legislation, Act 262, Session Laws of Hawaii 1996, (Act 262), after years of study. Act 262 was largely the result of the work of a task force established pursuant to Act 266, Session Laws of Hawaii 1994, charged with studying the establishment of an agency for community hospitals, then a division of the department of health. On December 20, 1994, the task force issued its report to the governor and the legislature entitled The Preliminary Report of the Governor's Task Force on the Establishment of an Agency for Community Hospitals. Many of the recommendations of the task force were adopted by the legislature, resulting in passage of Act 262, and the creation of the Hawaii health systems corporation in 1996.
One significant recommendation of the task force included the establishment of regional system boards of directors, along with the system-wide board. This was accomplished in Act 290, Session Laws of Hawaii 2007, where the legislature established a two-tiered board system, giving the regional boards custodial control over the operations, facilities, and personnel, to be exercised within corporate policy.
The legislature further limited the corporation's centralized operational authority through Act 182, Session Laws of Hawaii 2009, which prohibits the corporation from granting mortgages on corporation real property in order to secure loans and revenue bonds. However, the legislature finds that the inability to leverage its biggest asset of real property by pledging it as collateral as well as the dollar cap that Act 182 imposed on the corporation's authority to enter into municipal leases has hindered the ability of the corporation to obtain outside financing and refinance loans for more favorable terms.
The legislature finds that the decentralization of personnel, purchasing, and other administrative functions to the four regions within the Hawaii health systems corporation following this decentralization of the system-wide board caused inefficiencies that are detrimental to the financial stability of the system, operational effectiveness, and employee morale. Additional limits on the corporation's ability to leverage its own assets have further limited the corporation's operational effectiveness. The current organizational structure of the Hawaii health systems corporation is ineffective. Consequently, there is an urgent need to stabilize the network of public hospitals that are the primary source of medical care on the neighbor islands, as well as a safety net for thousands of elderly and needy patients.
The purpose of this part is to centralize personnel, purchasing, and other administrative functions within the Hawaii health systems corporation and remove unnecessary operational limitations to achieve greater efficiency, effectiveness, and meaningful financial accountability.
SECTION 2. Chapter 323F, Hawaii Revised Statutes, is amended by adding a new section to part II to be appropriately designated and to read as follows:
"§323F- Financial and management audits. The auditor shall conduct a financial and management audit of the Hawaii health systems corporation every five years."
SECTION 3. Section 89-8.5, Hawaii Revised Statutes, is amended to read as follows:
"[[]§89-8.5[]]
Negotiating authority; Hawaii health systems corporation. Notwithstanding any
law to the contrary, including section 89-6(d), the Hawaii health systems
corporation [or any of the regional boards], as a sole employer
negotiator, may negotiate with the exclusive representative of any appropriate
bargaining unit and execute memorandums of understanding for employees under
its control to alter any existing or new collective bargaining agreement on any
item or items subject to section 89-9."
SECTION 4. Section 323F-1, Hawaii Revised Statutes, is amended as follows:
1. By inserting a new definition to be appropriately inserted and to read:
""Regional public health care facility management advisory committee" means a regional committee that advises the chief executive officer and the corporation board."
2. By repealing the definition of "regional system board":
[""Regional
system board" means a community-based governing board of directors of a
regional system of the corporation."]
SECTION 5. Section 323F-2, Hawaii Revised Statutes, is amended to read as follows:
"§323F-2 Hawaii health systems corporation. (a) There is established the Hawaii health systems corporation, which shall be a public body corporate and politic and an instrumentality and agency of the State. The corporation shall be placed within the department of health for the administrative purposes specified in section 26-35(a)(6) only.
(b) The corporate organization shall be divided into five regional systems, as follows:
(1) The [Oahu
regional health care system;] city and county of Honolulu;
(2) The [Kauai regional
health care system;] county of Kauai;
(3) The [Maui
regional health care system;] county of Maui, except for the county of
Kalawao;
(4) The [east Hawaii
regional health care system,] eastern section of the county of Hawaii,
comprising the Puna district, north Hilo district, south Hilo district, Hamakua
district, and Kau district; and
(5) The [west Hawaii
regional health care system,] western section of the county of Hawaii,
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, IV, and V, respectively."
SECTION 6. Section 323F-3, Hawaii Revised Statutes, is amended to read as follows:
"§323F-3 Corporation board. (a) The corporation shall
be governed by [an eighteen-member] a thirteen-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 five 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) Two members who reside on the island
of Oahu, one of whom shall be appointed by the Oahu regional system board and
one of whom shall be appointed by the governor, both of whom shall serve as
voting members; and
(8) 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, on the island of
Kauai, and on the island of Oahu 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; the initial member from the island of Kauai shall
be appointed to serve a term of two years; and the initial member from the
island of Oahu shall be appointed to serve a term of four 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].
(b) Ten members of the corporation board shall be appointed by the governor pursuant to section 26-34 as follows:
(1) One member from region I who resides in the city and county of Honolulu;
(2) One member from region II who resides in the county of Kauai;
(3) One member from region III who resides in the county of Maui;
(4) One member from region IV who resides in the eastern section of the county of Hawaii;
(5) One member from region V who resides in the western section of the county of Hawaii;
(6) One member from region II who resides in the county of Kauai or from region III who resides in the district of Hana or on the island of Lanai; provided that in no event shall the member be appointed from the same region for two consecutive terms; and
(7) Four at-large members who reside in the State.
The eleventh member shall be the chairperson of the executive public health facility management advisory committee, who shall serve as an ex officio, voting member.
The twelfth member, who shall serve as a voting member, shall be a physician with active medical staff privileges at one of the corporation's public health facilities. The physician member shall serve a term of two years. The initial physician member shall be from region II, and subsequent physician members shall come from regions IV, III, and V, respectively. The physician member position shall continue to rotate in this order. The physician member shall be appointed to the corporation board by a simple majority vote of the members of the executive public health facility management advisory committee from a list of qualified nominees submitted by the public health facility management advisory committee for the region from which the physician member is to be chosen. 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 region.
The thirteenth member shall be the director of health or the director's designee, who shall serve as an ex officio, voting member.
Prior to the transfer date, the public health facility management advisory committees appointed pursuant to section 323F-10 for each county may recommend names to the governor for each position on the corporation board designated for a region that corresponds to its county. After the transfer date, the public health facility management advisory committees appointed pursuant to section 323F-10 for each region may make recommendations to the governor. The appointed board members shall serve for a term of four years; provided that upon the initial appointment of the first ten members:
(1) Two at-large members shall be appointed for a term of two years;
(2) Three at-large members shall be appointed for a term of three years; and
(3) Five regional members shall be appointed for a term of four 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 the governor or 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."
SECTION 7. Section 323F-4, Hawaii Revised Statutes, is amended to read as follows:
"§323F-4 Board meetings. (a) The corporation board [and
each regional system board] shall be exempt from part I of chapter 92 and
shall meet no fewer than four times [a] per year[; provided
that the regional system boards and the corporation board shall meet together
at least once a year]. Each regional [board]
public health facility management advisory committee shall meet at least
six times each year; provided that two of these meetings shall be public
community meetings for the purpose of informing the community and taking
comment on the regional [system's] public health facility management
advisory committee performance [if these meetings are in addition to the
four board meetings]. The public community meetings shall be advertised in
a newspaper of general circulation in the regional system at least two weeks in
advance.
(b) All business of the corporation board [and each regional
system board] shall be conducted at a regular or special meeting at which a
quorum is present, consisting of at least a majority of the directors then in
office. The corporation board [and each regional system board] shall
adopt procedural rules for meetings, not subject to chapter 91, that shall
include provisions for meetings via electronic and telephonic communications
and other methods that allow the [boards] board to conduct
business in a timely and efficient manner. Any action of the corporation board
[or each regional system board] shall require the affirmative vote of a
majority of those present and voting at the meeting; except that a vote of
two-thirds of the entire membership of the respective board then in office
shall be required for any of the following actions:
(1) Removal by the corporation board [or
respective regional system board] of one of its members; provided that
the eleventh and twelfth members set forth in section 323F-3 may be removed
only pursuant to sections 323F-10 and 323F-10.5;
(2) Amendment by the corporation [or a
regional system] board of its bylaws;
(3) Hiring or removing [a regional] the
chief executive officer[;] of the corporation; and
[(4) Filling of vacancies on a board; and
(5)] (4) Any
other actions as provided by the corporation [or regional system board]
bylaws[, except the hiring or removing of the chief executive officer of the
corporation]."
SECTION 8. Section 323F-5, Hawaii Revised Statutes, is amended to read as follows:
"§323F-5 Disclosure of interests. All corporation [and
regional system] board members and employees of the corporation shall be
subject to chapter 84."
SECTION 9. Section 323F-7, Hawaii Revised Statutes, is amended 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)]. (a) Notwithstanding any other law to
the contrary, the corporation [and any of the regional system boards]
shall have and 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 without
regard to chapter 91; provided that each regional system board shall be
responsible for its own] corporate-wide policies, procedures, and
rules necessary or appropriate to plan, operate, manage, and control the system
of public health facilities [within its own regional system consistent
with corporation policies;] and services without regard to chapter 91;
(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;]
(3) Entering into and performing any
contracts, leases, cooperative agreements, partnerships, or other transactions
whatsoever that may be necessary or appropriate 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, 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, 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];
(8) Setting rates and
charges for all services provided by the corporation 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 centralized
corporation-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 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 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] and its chief executive officer
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 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 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] 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 or 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] for property that 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
mixed, 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, 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, and
to transition into a new entity, 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; provided further that this paragraph
shall not be construed to authorize the sale, pledge, or mortgage of real
property under the control of the corporation or a regional system board;]
(20) Purchasing insurance
and creating captive insurers in any arrangement deemed in the best interest of
the corporation, including but not limited to funding and payment of
deductibles and purchase of reinsurance; [provided that only the corporation
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;]
(21) Acquiring by condemnation, pursuant to chapter 101, any real property required by the corporation 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, 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 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] 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],
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 corporation-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 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 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. 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
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 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] the 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 pleasure;
(29) Waiving, by means
that the corporation [or regional system board] deems appropriate, the
exemption from federal income taxation of interest on the corporation's [or
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 corporation board shall enjoy the exemption under section
103-53(e);
(B) The regional
system boards shall enjoy the exemption under chapter 103D; and
(C) The] 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 shall only
be hired or dismissed upon the approval of the regional system 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.] Calling upon the attorney general for legal services that the
corporation may require.
[(d) Each regional system board shall not be subject to chapters
36 to 38, 40, 41D, and 103D as well as part I of chapter 92 and shall enjoy the
exemptions contained in sections 102-2 and 103-53(e), except as otherwise
provided in this chapter.] (b) The
corporation shall not be subject to chapters 36 [to] 37, 37D, 38, 40, and 41D, as well as part I of chapter 92, and
shall enjoy the exemptions contained in sections 102-2 and 103-53(e); provided that the exemption provided under this subsection to
chapter 37D shall only apply to financing agreements of $5,000,000 or less;
provided further that the aggregate value of financing agreements per fiscal
year shall not exceed $25,000,000[.] per region.
[(e)] (c) The duties and powers granted to the
corporation [or any regional system board] may not be used to enter into
contractual or business relationships that have the practical effect of
allowing or are intended to allow private-sector counterparts to replace
existing employee positions or responsibilities within the corporation [or
in any regional system or its facilities; provided the corporation or regional
system boards shall be allowed to enter into such relationships to the extent
and for the purposes that the division of community hospitals could have done
under collective bargaining contracts that were in effect for the 1995-1996
fiscal year]."
SECTION 10. Section 323F-7.6, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) A transition shall only occur upon approval of the [appropriate
regional system board in the case of a regional system or individual facility
transition, or upon approval of the regional system boards and the corporation
in the case of the transition of the entire] corporation. Any transition
shall be subject to legal review by the attorney general who shall approve the
transition if satisfied that the transition conforms to all applicable laws,
subject to the review of the director of the department of budget and finance
who shall approve the transition if it conforms to all applicable financing
procedures, and subject to the governor's approval. In addition the transition
shall be subject to the following terms and conditions:
(1) All proceeds from the sale, lease, or transfer of assets shall be used for health care services in the respective regional system or facility, except that real property shall only be transferred by lease;
(2) Any and all liabilities [of a regional system or facility transitioning into a new entity] that were transferred to the Hawaii health systems corporation
upon its creation by Act 262, Session Laws of Hawaii 1996, and all liabilities [of the regional system or facility]
related to collective bargaining contracts negotiated by the State, shall
become the responsibility of the State; and
(3) During the period of transition:
(A) The State shall continue to fund the provision of health
care services [provided for by the regional system or individual facility];
and
(B) All applicable provisions of this chapter shall continue to apply.
Upon the completion of the transition of all the facilities in a
regional system to a new entity, the regional [system
board] public health care facility management advisory committee 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] committee shall not terminate but shall continue to retain jurisdiction over
those facilities remaining in the regional system."
SECTION 11. Section 323F-8, Hawaii Revised Statutes, is amended to read as follows:
"§323F-8 Chief executive officer; exempt positions. (a) The corporation board may appoint, by majority vote of its entire membership, a chief executive officer of the corporation whose salary shall be set by the corporation board and who shall be exempt from chapter 76 and section 26-35(a)(4). 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.
[The discharge
of the chief executive officer shall require a majority vote of the entire
membership of the corporation board.]
(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 12. Section 323F-9, Hawaii Revised Statutes, is amended to read as follows:
"§323F-9
Hiring of attorneys. The
corporation [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 13. Section 323F-10, Hawaii Revised Statutes, is amended to read as follows:
"§323F-10 Regional public health facility management
advisory committees. (a) [On the transfer date, there] 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 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] If a regional committee [voting] votes to remove
its chairperson who concurrently sits on the corporation board, that vote shall
be unanimous. [In the event of] If a regional committee [voting]
votes to remove its physician member from the corporation 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 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.
(c) Each regional committee may prepare a report for inclusion with the corporation's annual report and audit, which shall include but not be limited to comments and analyses on the corporation's regional operational and capital improvement budgets for its respective region.
[(d) Upon the establishment of a regional system board for a
regional system pursuant to section 323F-3.5, this section shall no longer
apply to that regional system.]"
SECTION 14. Section 323F-10.5, Hawaii Revised Statutes, is amended to read as follows:
"§323F-10.5 Executive public health facility management
advisory committee; establishment. (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, shall represent the interests of all regional
committees on the corporation board.
(b) The executive committee shall select its own chairperson to serve on the corporation board and shall adopt rules governing the terms of office and removal from the corporation 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.
(c) The members of the executive committee shall serve without compensation, but shall be reimbursed for reasonable expenses incurred in the performance of their duties.
[(d) Upon the establishment of a regional system board for a
regional system pursuant to section 323F-3.5, this section shall no longer
apply to that regional system.]"
SECTION 15. 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
regional system board] to function as a multiple facility public hospital
system delivering health care services to the residents of the State."
SECTION 16. Section 323F-21, Hawaii Revised Statutes, is amended to read as follows:
"§323F-21 Fiscal provisions. (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 regional system board] may
establish and maintain, within the health systems special fund [or any
regional subaccount], any [other] accounts that [may be] are
necessary [and appropriate] to carry out its purposes and
responsibilities.
[The corporation and any regional system board may deposit
moneys into trustee accounts for the purposes of securing or issuing bonds.]
The corporation [and regional system boards] may provide
reasonable reserves for any of the following purposes:
(1) Insurance deductibles;
(2) The improvement, replacement, or expansion of their 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 regional system boards deem] deems necessary [or appropriate]
in the performance of [their] its
purposes and responsibilities.
(b) The corporation board [and regional system boards]
shall [collaboratively] develop budgetary guidelines and annual
operating and capital budgets for each facility, 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], and may allocate to
each facility reasonable corporation administrative costs, including funds
determined by the corporation [or any regional system board] to be
needed from or provided to each facility to:
(1) Repay corporation [or regional system
board] debts;
(2) Provide subsidies to any facility 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 regional system boards] shall [collaboratively]
develop annual corporation operating and capital budgets, taking into account
anticipated surpluses from or subsidies to the facilities 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 shall call together all the
regional systems through representatives selected by each regional system
board, and the chairs of the facility management advisory committees, if any,
to determine which services and functions should be provided by the corporation
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 board regional
representatives, shall agree upon an allocation methodology for funding the
agreed upon and statutorily created corporate services and functions.
(e)] (d) 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
board[, the regional system board managing the facility, or an] or
its 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)] (e) In accordance with
each annual facility budget, and subject to policies established by the
corporation 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.
[(g)] (f) The corporation [and
each regional system board], subject to policies established by the
corporation [and each regional system board, respectively], may elect to
manage its own capital improvement project and funds, either directly or
indirectly by contract; provided that annual reports of the project moneys are
provided to the governor and legislature.
[(h)] (g) The corporation board
[and regional system boards] may hold public informational meetings on [their]
its 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 17. Section 323F-22, Hawaii Revised Statutes, is amended to read as follows:
"§323F-22 Annual audit and report; disclosure of revenue
projections[; internal performance audit]. (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 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].
(b) In addition to the submittal of the audit required under
subsection (a), the corporation[, in cooperation with the regional system
boards,] shall submit a report to the legislature at least twenty days
prior to the convening of each regular session that shall include but not be
limited to:
(1) The projected revenues for each health care facility;
(2) A list of all proposed capital improvement projects planned for implementation during the following fiscal year; and
(3) All reports submitted by regional public health facility management advisory committees pursuant to section 323F-10(c).
(c) [The regional system boards shall prepare a
report for inclusion with the corporation's annual report and audit.
(d)] There shall be an annual internal audit
of the management and operations of the corporation [and regions]. The
corporation[, in cooperation with the regional system boards,] shall
submit a report to the legislature at least twenty days prior to the convening
of each regular session on the results of the annual internal audit of the
management and operations of the corporation [and regions]."
SECTION 18. Section 323F-23, Hawaii Revised Statutes, is amended to read as follows:
"§323F-23 Exemption from taxation. The corporation [and
each regional system board] shall be exempt from paying any:
(1) Assessments levied by any county; and
(2) State taxes of any kind."
SECTION 19. Section 323F-24, Hawaii Revised Statutes, is amended to read as follows:
"§323F-24
Budget oversight. The
corporation's [and each regional system board's] operating and capital
improvement budgets shall not be subject to review or approval by the governor
or any state agency, except where state general funds or capital improvement
moneys are requested. If general funds or capital improvement moneys are
requested, then the corporation [or any regional system board] shall
include, with its request, the proposed budget for which the funds or moneys
are to be included. The corporation [and regional system boards, once
operational,] shall [collaboratively] submit [their] its
budgets annually to the legislature for review and approval at least twenty
days prior to the convening of the regular legislative session[, beginning
with the budgets for the 2010-2011 biennium fiscal years]."
SECTION 20. Section 323F-25, Hawaii Revised Statutes, is amended to read as follows:
"[[]§323F-25[] Regional system board; community] Community hospitals; community health
centers; collaboration. Each [regional system
board and each] community hospital under the jurisdiction of the
corporation shall collaborate with community health centers within their
respective geographic jurisdictions to maximize funding from the state and
federal governments to:
(1) Maximize reimbursement for health care services provided;
(2) Acquire funds for capital investment;
(3) Provide expanded hours of service; and
(4) Ensure the provision of the appropriate level of care to the community served by each community health center."
SECTION 21. Section 323F-31, Hawaii Revised Statutes, is amended to read as follows:
"§323F-31 Maintenance of services. (a) Prior to implementation, the corporation shall notify the legislature of any planned substantial expansion, reduction, or elimination of direct patient care services.
[(a)] (b) No
[planned] substantial reduction or elimination of direct patient care
services at any facility shall be undertaken [unless all of the following
requirements are met:
(1) An initial determination is made by
the regional chief executive officer as to critical and emergency services
which shall not be subject to reduction or elimination pursuant to this
section;
(2) The plan of the facility to
substantially reduce or eliminate any direct patient care services at the
health facility shall first be presented to the regional system board for its
approval;
(3) Subsequent to the requisite regional
system board approval, the regional chief executive officer shall present the
plan to the community in which the facility is located, at a community informational
meeting, in order to obtain community input on the plan; and
(4) Provided that if the regional system
board approves the plan, the plan as approved by the regional system board
shall be submitted to the corporation board for ratification.
(b) After the community informational meeting, but at least twenty
days prior to the implementation of the plan approved by the regional system
board, the regional system board shall give notice of implementation of the
plan to the governor, senate president, and the speaker of the house of
representatives.
(c) The decision of the regional system board shall be the final
decision with respect to the plan. Implementation of the plan shall commence
and continue, provided that no legislation is enacted that:
(1) Requires the reinstatement and
continuation of the direct patient care services that are subject to reduction
or elimination under the plan; and
(2) Includes an appropriation of
additional moneys sufficient to adequately fund the mandated reinstatement and
continuation of the subject direct patient care services.] by the
corporation without the approval of the legislature.
(c) The legislature shall maintain review and oversight authority over the provision of direct patient care services provided at each facility and may intervene to counter or restrict any substantial reduction or elimination of patient care services."
SECTION 22. Section 323F-3.5, Hawaii Revised Statutes, is repealed.
["§323F-3.5 Regional system boards. (a) There is hereby established a
regional system board of directors to 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.
(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 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
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.
(d) Each regional system board shall:
(1) Be
responsible for local governance, operations, and administration of the
delivery of services in its respective regional system as set forth in this
chapter and as further delegated by the corporation;
(2) Include
medical and health care providers and professionals, consumers, and
knowledgeable individuals in other appropriate areas, such as business,
finance, and law; provided that no more than three members of the regional
system board shall be physicians;
(3) Be as
balanced and representative of the community stakeholders as possible; and
(4) Have the powers, duties, and responsibilities that are specific to
the regional system board as provided in this chapter.
(e) Any member of a regional system board may be removed for
cause by the governor or for cause by vote of a two-thirds majority of the
regional system board's voting members then in office. For purposes of this
section, "cause" shall include without limitation:
(1) Malfeasance
in office;
(2) Persistent
failure to attend regularly called meetings;
(3) Sentencing
for conviction of a felony, to the extent allowed by section 831-3.1; or
(4) Any other
cause that may render a member incapable of discharging or unfit to discharge
the duties required under this chapter."]
SECTION 23. Section 323F-4.5, Hawaii Revised Statutes, is repealed.
["[§323F-4.5] Captive insurance board. (a) There is established a ten-member
captive insurance board that shall carry out the corporation's duties and
responsibilities relating to the establishment of any captive insurance company
pursuant to section [323F-7(c)(20)] and the operation thereof.
(b) Eight members of the captive insurance board shall be
appointed by the governor as follows:
(1) Three
members from a list of five persons submitted by the president of the senate;
provided that at least one of these members shall have experience in the insurance
industry and financial matters;
(2) Three
members from a list of five persons submitted by the speaker of the house of
representatives; provided that at least one of these members shall have
experience in the insurance industry and financial matters; and
(3) Two
members, one of whom shall be the chief executive officer or chief financial
officer of an insurer licensed to do business in the State and shall serve as a
nonvoting member.
The director of health or the director's designee and the insurance
commissioner or the commissioner's designee shall serve as ex officio,
nonvoting members.
Any vacancy shall be filled in the same manner provided for the
original appointments. The captive insurance board shall elect its own chair
from among its members.
(c) The selection, appointment, and confirmation of any
appointed nominee shall be based on ensuring that captive insurance board
members have diverse and beneficial perspectives and experiences and that they
include, to the extent possible, representatives of the insurance and/or
finance sectors. Members of the captive insurance board shall serve without
compensation but may be reimbursed for actual expenses, including travel
expenses incurred in the performance of their duties.
(d) Any appointed member of the captive insurance board may be
removed for cause by the governor or for cause by vote of a two-thirds majority
of the captive insurance board 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,
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) No member of the captive insurance board shall be an
employee or vendor of the corporation, or an immediate family member thereof.
For purposes of this subsection, "immediate family member" means a
corporation board employee's or vendor's spouse, child, parent, grandparent, or
any related individual who resides in the same household of the employee or
vendor.]"
SECTION 24. 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 25. Section 323F-8.5, Hawaii Revised Statutes, is repealed.
["§323F-8.5
Regional chief executive officer; exempt position. (a) Upon
establishment, a regional system board may appoint a regional chief executive
officer whose salary shall be set by the corresponding regional system board
and may discharge a regional chief executive officer; provided that the
position shall be exempt from chapter 76 and section 26-35(a)(4). 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.
(c) Each
regional chief executive officer or their designees 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 regional system.
(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 26. The auditor shall conduct a comprehensive financial and management audit of the Hawaii health systems corporation, including an analysis of information technology operations, procurement practices, contract administration, cash collections, accounts receivable, and personnel management.
The auditor shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2016.
SECTION 27. Sections 26-5, 26-35.5, 28-8.3, 36-27, 36-30, 37-53, 37-74, 37D-1, 37D-2, 41D-2, 102-2, 103-53, 103D-102, Hawaii Revised Statutes, are amended by deleting the words "regional system board", or like term, whenever the words "regional system board", or like term, appear, as the context requires.
PART II
SECTION 28. The legislature finds that under current law, employees of the Hawaii health systems corporation are included in seven bargaining units that also include employees of other public employers. While this arrangement is not unique to the Hawaii health systems corporation, the corporation's status as one of the nation's largest public health care organizations providing acute and long term health care services makes its workforce needs wholly different from other government agencies in the State.
Other health care workers are employed by the State; however, none of them provide acute hospital care or residential long term care. The ability to negotiate collective bargaining agreements that address the wages, hours, and working conditions of its employees will allow the Hawaii health systems corporation to expeditiously respond to and address the unique issues inherent in its hospital operations, including census, acuity, process improvement, and most importantly, quality patient care.
The legislature further finds that a more appropriate categorization of the bargaining units requires that the employees of the Hawaii health systems corporation be separated from other employees of different public employers and be placed in separate bargaining units that are counterparts to existing ones.
The purpose of this part is to establish seven separate bargaining units for employees of the Hawaii health systems corporation.
SECTION 29. Section 89-6, Hawaii Revised Statutes, is amended as follows:
1. By amending subsections (a) and (b) to read:
"(a) All employees throughout the State within any of the following categories shall constitute an appropriate bargaining unit:
(1) Nonsupervisory employees in blue collar positions;
(2) Supervisory employees in blue collar positions;
(3) Nonsupervisory employees in white collar positions;
(4) Supervisory employees in white collar positions;
(5) Teachers and other personnel of the department of education under the same pay schedule, including part-time employees working less than twenty hours a week who are equal to one-half of a full-time equivalent;
(6) Educational officers and other personnel of the department of education under the same pay schedule;
(7) Faculty of the University of Hawaii and the community college system;
(8) Personnel of the University of Hawaii and the community college system, other than faculty;
(9) Registered professional nurses;
(10) Institutional, health, and correctional workers;
(11) Firefighters;
(12) Police officers;
(13) Professional and scientific employees,
who cannot be included in [any of the other] bargaining units[; and]
(1), (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), or (12);
(14) State law enforcement officers and state
and county ocean safety and water safety officers[.];
(15) Nonsupervisory employees in blue collar positions with the Hawaii health systems corporation;
(16) Supervisory employees in blue collar positions with the Hawaii health systems corporation;
(17) Nonsupervisory employees in white collar positions with the Hawaii health systems corporation;
(18) Supervisory employees in white collar positions with the Hawaii health systems corporation;
(19) Registered professional nurses with the Hawaii health systems corporation;
(20) Institutional and health workers with the Hawaii health systems corporation; and
(21) Professional and scientific employees with the Hawaii health systems corporation, who cannot be included in bargaining units (15), (16), (17), (18), (19), and (20).
(b) Because of the nature of work involved and the essentiality of certain occupations that require specialized training, supervisory employees who are eligible for inclusion in units (9) through (14) shall be included in units (9) through (14), respectively, instead of unit (2) or (4). Supervisory employees with the Hawaii health systems corporation who are eligible for inclusion in bargaining units (19) through (21) shall be included in bargaining units (19) through (21), respectively, instead of bargaining unit (16) or (18)."
2. By amending subsection (d) to read:
"(d) For the purpose of negotiating a collective bargaining agreement, the public employer of an appropriate bargaining unit shall mean the governor together with the following employers:
(1) For bargaining units (1), (2), (3), (4),
(9), (10), (13), and (14), the governor shall have six votes and the mayors[,]
and the chief justice[, and the Hawaii health systems corporation
board] shall each have one vote if they have employees in the particular
bargaining unit;
(2) For bargaining units (11) and (12), the governor shall have four votes and the mayors shall each have one vote;
(3) For bargaining units (5) and (6), the
governor shall have three votes, the board of education shall have two votes,
and the superintendent of education shall have one vote; [and]
(4) For bargaining units (7) and (8), the
governor shall have three votes, the board of regents of the University of
Hawaii shall have two votes, and the president of the University of Hawaii
shall have one vote[.]; and
(5) For bargaining units (15), (16), (17), (18), (19), (20), and (21), the governor shall have two votes and the Hawaii health systems corporation board shall have one vote.
Any decision to be reached by the applicable employer group shall be on the basis of simple majority, except when a bargaining unit includes county employees from more than one county. In that case, the simple majority shall include at least one county."
SECTION 30. Section 89-11, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e) If an impasse exists between a public
employer and the exclusive representative of bargaining unit (2), supervisory
employees in blue collar positions; bargaining unit (3), nonsupervisory
employees in white collar positions; bargaining unit (4), supervisory employees
in white collar positions; bargaining unit (6), educational officers and other
personnel of the department of education under the same salary schedule;
bargaining unit (8), personnel of the University of Hawaii and the community
college system, other than faculty; bargaining unit (9), registered
professional nurses; bargaining unit (10), institutional, health, and
correctional workers; bargaining unit (11), firefighters; bargaining unit (12),
police officers; bargaining unit (13), professional and scientific employees; [or]
bargaining unit (14), state law enforcement officers and state and county ocean
safety and water safety officers[,]; bargaining
unit (15) nonsupervisory employees in blue collar positions with the Hawaii
health systems corporation; bargaining unit (16), supervisory employees in blue
collar positions with the Hawaii health systems corporation; bargaining unit
(17), nonsupervisory employees in white collar positions with the Hawaii health
systems corporation; bargaining unit (18), supervisory employees in white
collar positions with the Hawaii health systems corporation; bargaining unit
(19), registered professional nurses with the Hawaii health systems
corporation; bargaining unit (20), institutional and health workers with the
Hawaii health systems corporation; or bargaining unit (21), professional and
scientific employees with the Hawaii health systems corporation, the board shall
assist in the resolution of the impasse as follows:
(1) Mediation. During the first twenty days after the date of impasse, the board shall immediately appoint a mediator, representative of the public from a list of qualified persons maintained by the board, to assist the parties in a voluntary resolution of the impasse.
(2) Arbitration. If the impasse continues twenty days after the date of impasse, the board shall immediately notify the employer and the exclusive representative that the impasse shall be submitted to a three-member arbitration panel who shall follow the arbitration procedure provided herein.
(A) Arbitration
panel. Two members of the arbitration panel shall be selected by the parties;
one shall be selected by the employer and one shall be selected by the
exclusive representative. The neutral third member of the arbitration panel,
who shall chair the arbitration panel, shall be selected by mutual agreement of
the parties. [In the event that] If the parties fail to select
the neutral third member of the arbitration panel within thirty days from the
date of impasse, the board shall request the American Arbitration Association,
or its successor in function, to furnish a list of five qualified arbitrators
from which the neutral arbitrator shall be selected. Within five days after
receipt of the list, the parties shall alternately strike names from the list
until a single name is left, who shall be immediately appointed by the board as
the neutral arbitrator and chairperson of the arbitration panel.
(B) Final
positions. Upon the selection and appointment of the arbitration panel, each
party shall submit to the panel, in writing, with copy to the other party, a
final position that shall include all provisions in any existing collective
bargaining agreement not being modified, all provisions already agreed to in
negotiations, and all further provisions [which] that each party
is proposing for inclusion in the final agreement; provided that such
further provisions shall be limited to those specific proposals that were
submitted in writing to the other party and were the subject of collective
bargaining between the parties up to the time of the impasse, including those
specific proposals that the parties have decided to include through a written
mutual agreement. The arbitration panel shall decide whether final positions
are compliant with this provision and which proposals may be considered for
inclusion in the final agreement.
(C) Arbitration hearing. Within one hundred twenty days of its appointment, the arbitration panel shall commence a hearing at which time the parties may submit either in writing or through oral testimony, all information or data supporting their respective final positions. The arbitrator, or the chairperson of the arbitration panel together with the other two members, are encouraged to assist the parties in a voluntary resolution of the impasse through mediation, to the extent practicable throughout the entire arbitration period until the date the panel is required to issue its arbitration decision.
(D) Arbitration decision. Within thirty days after the conclusion of the hearing, a majority of the arbitration panel shall reach a decision pursuant to subsection (f) on all provisions that each party proposed in its respective final position for inclusion in the final agreement and transmit a preliminary draft of its decision to the parties. The parties shall review the preliminary draft for completeness, technical correctness, and clarity and may mutually submit to the panel any desired changes or adjustments that shall be incorporated in the final draft of its decision. Within fifteen days after the transmittal of the preliminary draft, a majority of the arbitration panel shall issue the arbitration decision."
PART III
SECTION 31. All rights, powers, functions, and duties of the Hawaii health systems corporation regional system boards are transferred to the Hawaii health systems corporation.
All employees who occupy civil service positions and whose functions are transferred to the Hawaii health systems corporation by this Act shall retain their civil service status, whether permanent or temporary. 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 personnel laws and this Act; provided that the employees possess the minimum qualifications and public employment requirements for the class or position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.
Any employee who, prior to this Act, is exempt from civil service and is transferred as a consequence of this Act may retain the employee's exempt status, but shall not be appointed to a civil service position as a consequence of this Act. An exempt employee who is transferred by this Act shall not suffer any loss of prior service credit, vacation or sick leave credits previously earned, or other employee benefits or privileges as a consequence of this Act; provided that the employees possess legal and public employment requirements for the position to which transferred or appointed, as applicable; provided further that subsequent changes in status may be made pursuant to applicable employment and compensation laws. The board of directors of the Hawaii health systems corporation may prescribe the duties and qualifications of these employees and fix their salaries without regard to chapter 76, Hawaii Revised Statutes.
SECTION 32. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the Hawaii health systems corporation regional system boards relating to the functions transferred to the Hawaii health systems corporation shall be transferred with the functions to which they relate.
SECTION 33. All acts passed prior to or during the regular session of 2015, whether enacted before or after passage of this Act, shall be amended to conform to this Act unless such acts specifically provide that this Act is being amended. Insofar as this Act is inconsistent with any other law, this Act shall control.
SECTION 34. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 35. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 36. This Act shall take effect on July 1, 2050; provided that part II of this Act shall apply to collective bargaining agreements negotiated after July 1, 2015.
Report Title:
Hawaii Health Systems Corporation
Description:
Reconsolidates HHSC operational administration and oversight by eliminating regional system boards. Repeals certain limits on operational authority. Creates new bargaining units for HHSC employees. (HB1112 HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.