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Hawaii committees back working group to refine proposal requiring insurers to boost primary care spending
Summary
Lawmakers advanced HB1965 but routed technical details to a new working group after insurers warned the defined medical-loss-ratio mechanics and external-review processes could conflict with federal definitions and existing state rate-setting rules.
A bipartisan working group will refine a bill that would require health carriers to allocate a minimum share of medical spending to primary care after testimony that the measure’s intent is sound but its mechanics need work.
Supporters including physicians and patient groups told the House committees that Hawaii faces critical primary care shortages — especially on neighbor islands — that threaten access and continuity of care. “Primary care reimbursements have to be increased to 6% by January of 2027 just to keep these clinics going,” said Scott Gross, president of the Hawaii Healthcare Task Force, describing provider shortages of 40% or more in some communities.
Insurance officials urged caution. Justin Chu of the DCCA insurance division said the bill’s use of a medical-loss-ratio definition and a hard premium ceiling could conflict with CMS definitions and the state’s obligation to ensure rates are neither excessive nor inadequate. He also asked for clear procedures for expedited external review of downcoded claims.
The Department of Human Services described existing MedQUEST investments and a recent year when managed-care organizations invested about 9% of medical expenditures in primary care under Quest integration contracts, and urged a broader definition of “primary care investments” that includes supportive services like care management.
Chair Greg Takayyama proposed forming a technical working group to draft implementable language and address five areas identified in testimony: a practicable minimum primary care expenditure definition, safeguards against improper downcoding, reporting and audit details, penalty frameworks, and rural-focused stabilization measures. The group will be led by the State Health Planning and Development Agency and include insurer, provider and consumer representatives, plus ex officio state agency advisors, and report back with recommendations before the 2027 session.
The committee adopted the working-group approach rather than sending the bill forward as-is, reflecting widespread agreement on the goal and concern about legal and operational complexity.
