2021 Hawaii Revised Statutes
Title 19. Health
323F. Hawaii Health Systems Corporation
323F-52 Transfer of right and responsibility to manage, operate, and provide health care services in a facility of the Maui regional system to a nonprofit management entity.

Universal Citation: HI Rev Stat § 323F-52 (2021)

§323F-52 Transfer of right and responsibility to manage, operate, and provide health care services in a facility of the Maui regional system to a nonprofit management entity. (a) Notwithstanding any other law to the contrary, including but not limited to section 27-1, section 76-16(b) and other sections of chapter 76, chapters 78, 89, 89A, 89C, and 171, part V of chapter 323D, and sections 323F-11 and 323F-31, the governor, with the assistance of the chief executive officer of the corporation, and the regional chief executive officer of the Maui regional system, or their designees, shall negotiate with a private entity to transfer the right and responsibility to manage, operate and otherwise provide health care services at one or more facilities of the Maui regional system, including Maui memorial medical center, Kula hospital and clinic, and Lanai community hospital, to a nonprofit management entity wholly-owned by the private entity; provided that the private entity submitted a statement of interest in response to a notice published in accordance with section 1-28.5 by the Maui regional system board, inviting private entities to submit statements of interest in acquiring the right and responsibility to manage, operate and otherwise provide health care services in one or more of the Maui regional system's facilities.

(b) Any agreement negotiated by the governor and entered into by the private entity and the governor, the corporation board, and the Maui regional system board, shall, at minimum, include a transfer completion date and a plan and schedule for completing the transfer that includes:

(1) Provisions and deadlines for conducting and completing due diligence;

(2) Provisions and a deadline to terminate the agreement before a transfer is completed, at the parties' respective option;

(3) Provisions for winding-down operations at the transferred facility or facilities and for terminating the agreement in the event that the lease entered into pursuant to section 323F-54 is terminated before the lease expires or the private entity or its nonprofit management entity abandons or otherwise discontinues its provision of health care services in a transferred facility; and

(4) Provisions to transfer or assign interests in equipment and furnishings, including any leases for the same; accounts receivable; medicare and other provider agreements; business and commercial licenses and registrations; intellectual property and goodwill; administrative, financial, and medical records and information; or any other interests or property of the Maui regional system facility or facilities to be transferred under this part, that the parties agree to transfer or assign.

(c) On and after the transfer completion date for the transfer of one or more facilities of the Maui regional system to a private entity or its nonprofit management entity pursuant to this part, the State, the corporation, and the Maui regional system and its board shall cease to have any responsibility for or control over the management and operation of the facility or facilities transferred by the agreement pursuant to this part. [L 2015, c 103, pt of §2]

Case Notes

Although plaintiff argued that Act 103, Session Laws of Hawaii 2015, violated the contract clause of the United States Constitution because it interfered with the collective bargaining agreement (CBA) between unions representing public employees and the state Hawaii Health Systems Corporation (HHSC), court found that the transfer of management and operation of three state-owned medical facilities to a private entity did not substantially impair the CBA. The CBA did not guarantee employment for the duration of the CBA, contained no explicit or implicit term that required the HHSC to operate any facility for the duration of the CBA, and explicitly contemplated possibility of employer-wide layoff, as well as layoffs due to a lack of work, needs, or funds. 166 F. Supp. 3d 1159 (2016).

No diversity jurisdiction in an action where union, representing public employees who worked for state agency responsible for management of state-owned medical facilities, sought a preliminary injunction enjoining governor from implementing Hawaii law transferring management and operation of three state-owned medical facilities to a private entity. State of Hawaii, a real party in interest, was not a "citizen" for purposes of federal diversity jurisdiction and, thus, could not be sued in federal court. 166 F. Supp. 3d 1159 (2016).

Plaintiff did not show that Act 103, Session Laws of Hawaii 2015, substantially impaired any collective bargaining agreement provisions by depriving public employee union members, employed by the Hawaii Health Systems Corporation, of statutory protections concerning the State's civil service system and merit principle or public employees' bargaining rights. Thus, there was no violation of the contract clause of the United States Constitution since civil service positions were creations of state law and could be eliminated by legislative act without violating statutory protections. 166 F. Supp. 3d 1159 (2016).

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