SECTION 1. The purpose of this Act is to ensure that all of the people of Hawaii, especially those residing in underserved rural communities, have continued access to health care services by establishing a process for determining whether the health care services presently provided by the Hawaii health systems corporation, one or more of the corporation's five regional health care systems, or one or more of the corporation's health systems facilities can be delivered more cost-effectively by partnering with a private health care management system.

SECTION 2. Section 323F-7.6, Hawaii Revised Statutes, is amended to read as follows:

"[[]§323F-7.6[]] Transition of Hawaii health systems regional system or health facility to a new entity. (a) Notwithstanding any other law to the contrary, including but not limited to section 27-1 and [~~chapter~~] chapters 76, 78, 89, and 171, any of the regional systems or individual facilities of the Hawaii health systems corporation is hereby authorized to [~~transition~~]:

(1) Enter into agreements with other health care entities to transition some or all of the responsibilities of a facility or region; and

(2) Transition into a new legal entity in any form recognized under the laws of the State, including but not limited to:

[~~(1)~~] (A) A nonprofit corporation;

[~~(2)~~] (B) A for-profit corporation;

[~~(3)~~] (C) A municipal facility;

[~~(4)~~] (D) A public benefit corporation; or

[~~(5)~~] (E) Any two or more of the entities in [~~paragraphs (1) through (4).~~] subparagraphs (A) through (D).

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

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

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

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

(3) During the period of transition:

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

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

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

(c) The Hawaii health systems corporation and the regional system boards shall collaborate and adopt management and oversight policies for agreements entered into pursuant to paragraph (a)(1). The regional system board of the area where the facilities and operations are located shall oversee the performance of the terms of the agreement by the private entity and shall manage the agreement on behalf of the State in accordance with the policies adopted."

SECTION 3. No employee of the Hawaii health systems corporation who is separated from service as a result of the implementation of a transition plan under section 2 of this Act shall suffer any loss of retirement allowance earned as provided in section 88-74, Hawaii Revised Statutes.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2015.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1112
TWENTY-EIGHTH LEGISLATURE, 2015
STATE OF HAWAII