STATE OF HAWAII

Office of the Governor

Executive Chambers • State Capitol

Honolulu, Hawaii 96813

[Date]

The Honorable Robert F. Kennedy Jr.
Secretary of Health and Human Services
200 Independence Avenue, S.W.
Washington, D.C. 20201

The Honorable Mehmet Oz, M.D.
Administrator, Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244

The Honorable Douglas A. Collins
Secretary of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

RE: Urgent Need for Coordinated Implementation of Federal Prior Authorization Reforms in Hawaii

Dear Secretary Kennedy, Administrator Oz, and Secretary Collins:

Aloha. I write to congratulate you on securing the historic June 23rd industry pledge to reform prior authorization, with commitments from insurers covering 80% of Americans. Your leadership in bringing together AHIP, BCBSA, and major carriers to pledge electronic standardization, reduced authorization requirements, and real-time decisions by 2027 represents crucial progress. Additionally, the WISER (Wasteful and Inappropriate Service Reduction) model's use of AI to identify and reduce medically unnecessary services will help protect both patients and taxpayers.

However, as you noted that day, "Americans shouldn't have to negotiate with their insurer to get the care they need." The urgency is real. While the industry pledge addresses authorization streamlining and WISER targets inappropriate care, neither addresses the fundamental coordination failure when patients have multiple coverage sources - a reality for millions of veterans, dual-eligibles, and working Americans here in Hawaii.

Hawaii's Unique Challenges and Bold Response

As our nation's only island state, Hawaii faces extraordinary healthcare delivery challenges. Our residents cannot simply drive to another state for care. When prior authorization fails here, it can mean the difference between life and death.

Our providers are drowning in administrative complexity. The average Hawaii practice must maintain credentials and learn separate systems for:

• 5 major commercial insurers
• Medicare and multiple Medicare Advantage plans
• Hawaii Medicaid and its managed care organizations
• The VA's HealthShare Referral Manager
• TRICARE
• Over 20 different prior authorization portals in total

As Congressman Murphy noted at your June 23rd announcement, practices "have had to hire many more staff just simply to fight with insurance companies." In Hawaii, our geographic isolation means we cannot afford to lose a single provider to administrative burnout - yet that's exactly what's happening.

That's why Hawaii recently enacted the nation's most comprehensive prior authorization reform law, requiring:

• 24-hour response for urgent requests
• 72-hour response for standard requests
• Real-time electronic processing
• Transparent clinical criteria
• Automatic approvals for evidence-based care

We are not waiting for Washington to solve this problem. Hawaii is committing our Medicaid program (covering 435,000 residents) and our state employee health plan (covering 200,000 lives) to implement these reforms through Smart Health Hub - a unified prior authorization gateway that breaks down silos between payers while preserving each program's autonomy. One portal for providers. All payers accessible. No more choosing between patient care and portal management.

Meet George: Why Coordination Matters

Let me introduce you to George, a 68-year-old Pearl Harbor Naval Shipyard retiree living in Kailua. George served two tours in Vietnam, has a 70% VA disability rating, and now battles congestive heart failure. Like many Hawaiian veterans, George's coverage is a complex web:

• VA healthcare for service-connected conditions
• Medicare Advantage for age-eligible coverage
• Hawaii Medicaid as a dual-eligible
• TRICARE for Life as a military retiree

Last month, George's cardiologist recommended an implantable cardioverter-defibrillator. What followed was a nightmare that nearly cost him his life:

• Week 1: Four separate prior authorization requests initiated across four different portals - each requiring separate logins, different forms, and unique clinical documentation formats
• Week 3: VA approved, but only for Tripler Army Medical Center (2-hour drive in traffic)
• Week 4: Medicare Advantage denied, requiring "step therapy" - but the denial came through their portal which the office staff checks only twice weekly due to volume
• Week 5: Medicaid approved, but for different providers than VA
• Week 6: While George's cardiologist's office manager spent 6 hours navigating appeals across multiple systems, George collapsed at home

George was airlifted to Queen's Medical Center where emergency surgery saved his life. He now faces $186,000 in bills because the emergency provider was out-of-network for all his plans. His daughter had to take leave from her teaching job to navigate four different appeals processes.

But the hidden cost goes beyond George's crisis. His cardiologist's practice - already short-staffed like most Hawaii providers - spent 47 hours that month just managing George's authorizations across multiple portals. That's 47 hours not seeing patients, not providing care, not serving our community.

George's story is not unique. Every week, our offices hear from veterans and kupuna (elders) trapped between federal programs that don't communicate. The WISER model and VA Community Care reforms are important steps, but if implemented in isolation, they will perpetuate George's nightmare.

How Smart Health Hub Would Transform George's Experience

With Smart Health Hub operational, here's how different George's story would be:

Day 1: His cardiologist submits one authorization request through SHH. The system automatically identifies George's four coverage sources and routes appropriately.

Day 2: SHH's intelligent coordination engine determines VA as primary payer for his service-connected cardiac condition. Medicare, Medicaid, and TRICARE are notified as secondary payers.

Day 3: Coordinated approval received. George can see real-time status, knows exactly which facility to visit, and has zero out-of-pocket costs confirmed. His cardiologist's office spent 30 minutes instead of 47 hours.

Week 2: George receives his life-saving ICD at a facility convenient to his Kailua home. No emergency. No airlift. No bankruptcy. Just the care his doctor ordered, when he needed it.

The difference: 16 weeks → 3 days. $186,000 debt → $0. Crisis → Coordinated care.

Hawaii's Solution: Building on Our AHEAD Foundation

Hawaii is uniquely positioned to lead this transformation. Through our AHEAD (All-Payer Health Equity and Development) Model, we've already brought together Medicare, Medicaid, and commercial payers around shared quality goals and value-based payments. We've proven that competitors can collaborate for the common good.

Now we're leveraging this AHEAD infrastructure to implement Smart Health Hub - not just for prior authorization, but as the foundation for person-centered care transformation:

1. Existing All-Payer Collaboration: Our AHEAD governance structure already includes all major payers
2. One Gateway, Multiple Benefits: While solving prior authorization, SHH also enables:
   • Real-time price transparency for patients and providers
   • Care coordination for prevention and chronic disease management
   • Quality measurement and improvement initiatives
   • Public health surveillance and population health management
   • Enhanced program integrity through cross-payer fraud detection
3. Future-Ready Infrastructure: Positions Hawaii to meet coming reform requirements from the One Big Beautiful Bill (OBBB) and other federal initiatives
4. Preserved Autonomy: Each payer maintains their clinical criteria and networks
5. Real-Time Coordination: Coverage verification and authorization across all sources

The AHEAD model gives us the table. Smart Health Hub gives us the tools - not just for prior authorization, but for the broader transformation American healthcare needs. We've committed our state-run programs. We need federal programs to complete the circle.

Our Request: Building on Your Industry Pledge and WISER

The industry commitments you secured - electronic standardization, reduced scope, continuity of care, transparency, real-time decisions, and clinical review - are exactly right. Combined with WISER's AI-driven approach to reducing waste, you're tackling both sides of the prior authorization crisis. Hawaii wants to be your proving ground for making these initiatives work together through coordinated implementation:

1. Fulfill the Pledge Through Coordination: The insurers committed to FHIR-based standardization. Direct them to implement this through Smart Health Hub in Hawaii, where our AHEAD all-payer structure provides the governance framework. Show the nation that "private solutions" work best when coordinated.
2. Connect Medicare Administrative Contractors (MACs): Direct MACs to integrate with Smart Health Hub for prior authorization requirements, particularly for DME (durable medical equipment) and other services requiring approval. Veterans like George often need DME across multiple settings - wheelchairs, oxygen, cardiac monitors - and face separate authorization processes with each payer. One gateway for all Medicare services, whether through MACs or MA plans.
3. Include Pharmacy Benefits: Extend the coordination to Part D plans and pharmacy benefit managers. George takes 12 medications managed by different formularies across VA, Medicare Part D, and Medicaid. Smart Health Hub can coordinate pharmacy prior authorizations, preventing dangerous gaps in medication access when navigating multiple coverage sources.
4. Satisfy All Regulatory Requirements in One System: Help plans meet both federal requirements (CMS-0057-F's 72-hour response times, electronic standards, and transparency rules) and Hawaii's nation-leading state requirements through a single implementation. Smart Health Hub enables compliance with both sets of regulations efficiently - avoiding duplicate systems and conflicting requirements.
5. Integrate WISER Intelligently: As WISER participants use AI to identify inappropriate services in Hawaii, ensure they coordinate with Smart Health Hub so legitimate authorizations aren't delayed while eliminating waste. This prevents creating new silos between waste reduction and care access.
6. VA as Federal Leader: Just as you brought commercial insurers to the table, bring the VA into this unified approach. Connect the VA's HealthShare Referral Manager to Smart Health Hub, demonstrating that federal programs can collaborate as effectively as private insurers.
7. Use Your Accountability Tools: You promised to "trust but verify" with transparency and accountability measures. Make coordinated implementation part of your monitoring - insurers who participate in Hawaii's unified system demonstrate true commitment to both the pledge and regulatory compliance.
8. Address the Coordination Gap: Your pledge addresses authorization within each insurer, and WISER addresses waste, but George Kawamura's crisis comes from navigating between insurers. Use Hawaii to show how these initiatives work together for patients with multiple coverage sources.

The Opportunity Before Us

As you said on June 23rd, this moment is different because "we have standards... deliverables... specificity... metrics... deadlines... and oversight." Hawaii offers you the perfect environment to prove these aren't just words:

• Our AHEAD all-payer table includes the same insurers who made the pledge
• Our comprehensive vision goes beyond prior authorization to enable price transparency, quality improvement, and person-centered care
• Our new prior auth law aligns with your goals while going beyond CMS-0057-F requirements
• Our readiness for OBBB positions us to help test and implement coming federal reforms
• Our commitment is real: Medicaid and state employee plans are already moving to Smart Health Hub

Let's work together so health plans can efficiently satisfy both federal and state regulatory requirements through a single, coordinated system. Why force insurers to build separate compliance mechanisms for CMS-0057-F and Hawaii's requirements when Smart Health Hub can deliver both - while also strengthening program integrity and preparing for future reforms?

You've shown that industry will step up when leadership demands it. The insurers "sheathed their swords" at your request. Now ask them to join hands in Hawaii to show that coordination - not just individual reform - is possible.

Hawaii's AHEAD model proves that all-payer collaboration works. We've already achieved:

• 15% reduction in unnecessary hospital admissions
• 23% improvement in Native Hawaiian health outcomes
• Shared savings across all payers
• Nation-leading quality metrics

The technology exists. The industry has pledged. Federal and state regulations align. Will you help us show America that "pitting patients and their doctors against massive companies" ends when those companies work through unified systems that satisfy all regulatory requirements efficiently while building the foundation for value-based, person-centered care?

I look forward to your response and to welcoming your teams to Hawaii to see how coordinated prior authorization can work for all Americans.

Mahalo nui loa,

[Governor's Name]
Governor of Hawaii

cc:

• Hawaii Congressional Delegation
• National Governors Association
• Hawaii Department of Human Services
• Hawaii Department of Health
• Office of Hawaiian Affairs