Case Title: Orthopedic Associates of Hawaii, Inc. v. Hawaiian Insurance Guaranty Company, Ltd.

Citation: 109 Haw. 185

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2005-12-07T00:00:00Z

Document:
FOR PUBLICATION ***

IN THE SUPREME COURT OF THE STATE OF HAWAI'I.

 

00

  

ORTHOPEDIC ASSOCIATES OF HAWAII, INC.
ATKINSON, M.D.; GREGORY H. CHOW, M.D
CHUN-HOON, M.D. DARRYL M. KAN, M.D.; THOMAS J. MANE,
III, M.D.; DEAN'G. LORICH, M.D.; JAY M, MARUMOTO, M.D.
CALVIN S. OISHT, M.D.; ALAN N. OXI, M.D.; ALAN PAVEL,
M.D.; ALLEN B. RICHARDSON, M.D.; DANIEL I. SINGER,
M.D.; HONOLULU SPORTS MEDICAL CLINIC, INC. ; CHET
NIERENBERG, M.D.; ROBERT SMITH, M.D.; PETER DIAMOND,
M.D. MAUT RADIOLOGY CONSULTANTS; EUGENE C. WASSON,
III, M.D.; DAVID J. HEENEY, M.D.; GEORGE S. BOREN,
M.D.; CHRISTOPHER A. NEAL, M-D.; SCOTT R. BOREN, M.D.
JAMES A. BENDON, M.D.; GEOFFREY M. MURRISH; HAWAIT
ORTHOPAEDICS, INC.; EDWARD GUTTELING, M.D. ; JEAN
MARINE, M.D.; ARTHUR REHME, M.D.; JOHN’ AZZATO, M.D.;
PRANK OSBORNE, M.D.; ROLF DRINHAUS, M.D.; JOHN CHASE,
M.D.; THOMAS SCHOTT, M.D.; WILLIAM FALOON, M.D. ;
PATRICK PADILLA, M.D.; DENISE WILLIAMSON, M.D.; JON
SCARPINO, M.D.; ALAN LARIMER, M.D.; ROBERT MEDOFF,
M.D.; LINDA J. RASMUSSEN, M.D.; EDWARD A. ALQUERO,
M.D., individually and dba EDWARD A. ALQUERO, M.D.,
INC.; KHENG SEE ANG, M.D.; STEVEN AZUMA, M.D.; LEE AU,
M.D.; ERNEST L. BADE, M.D., individually and dba ERNEST
LL. BADE, INC.; ALISTAIR BAIROS, M.D.; CHARLES H.
BALLARD, D.O., individually and dba KIHEI WAILEA
MEDICAL CENTER; JOHN BELLATI, M.D., individually and
dba WEST HAWAII ORTHOPEDICS, INC. ; "BARRY BLUM, M.D.,
individually and dba BARRY BLUM, M.D., INC.; WILEY
BRUNEL, M.D.; SUSAN CAULEY, M.D., individually and dba
SUSAN CAULEY, M.D., INC.; DENIS CHAN, M.D.,
individually and dba DENIS CHAN, M.D., INC.; ROBERT K
CHINN, M.D.; KEVIN C. CHEN, M.D., individually and dba
KEVIN C. CHEN, M.D., INC., F.A.C.0.C.; NARK L. COHEN,
M.D., individually and dba MARK L. COHEN, M.D., INC.
MAXWELL A. COOPER, M.D., individually and dba MAXWELL
A. COOPER, M.D., LTD.; KENT DAVENPORT, M.D.; GEOFFREY
V. DAVIS, M.D., individually and dba GEOFFREY V.
DAVIS, M.D., INC.; TERESA ANN DENNEY, D.0.; ALAN C.
GeSILVA, M.D., individually and dba ALAN C. deSILva,
M.D., INC.; MICHAEL J. DIMITRION, M.D., individually
‘and'dba MICHAEL J, DIMITRION, M.D., INC.; LORNE K.
DIRENFELD, M.D., individually and dba MAUI NEUROLOGICAL
‘ASSOCIATES, INC.; FORTUNATO V. ELIZAGA, M.D.; JUDY ANN
EMANUEL, D.O.; PAUL T. 2SAKI, M.D., individually and
dba PAUL T. ESAKI, M.D., INC.; FRANK A. PARREN, M.D.,
individually and dba FRANK A. FARREN, M.D., INC.;

; ROBERT=B)
ALBERT AK.

    

 

 

 

 

 

 

 

 

 

 

 

 

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GERALD D, FAULKNER, M.D., individually and dba GERALD
D. FAULKNER, M.D., INC.; PETER GABIN, M.D.; PETER A.
GALPIN, M.D. KRISTIN GEBROWSKY, M.D.; JAMES L. GROBE,
M.D.; JED'A. GROOM, M.D.; JON HARRELL, M.D.; ROBERT S.
HARVEY, M.D., individually and dba ROBERT S. HARVEY,
M.D., INC.; JOHN HEASTER, M.D.; W. DOUGLAS B. HILLER,
M.D., individually and dba HILLER ORTHOPEDIC, INC.;
JONATHAN JANES, M.D., individually and dba KONA COAST
INTERNAL MEDICINE, INC.; ALFONSO JIMENEZ, M.D.; DONALD
‘A. JONES, M.D.; AARON S. KAICHT, M.D.; RAYMOND KANG,
M.D., individually and dba OMNICARE MEDICAL CLINIC;
NEIL THOMAS KATZ, M.D., individually and dba MAUI
SPORTS MEDICINE CENTER, INC.; WILLIAM G. KEPLER, M.D.;
BRADON YOSHIO KIMURA, M.D.; RICHARD ¥. KIMURA, M.D.,
individually and dba RICHARD Y, KIMURA, M.D., INC.
ROGER T. KIMURA, M.D.; ALLAN R. KUNIMOTO, M.D.
CLIFFORD K.H. LAU, M.D., individually and dba CLIFFORD
K.H. LAU, M.D., INC.; DELLA LIN, M.D.; BLASE B. LEE
LOY, "M.D.} PANU'LIMPISVASTI, M.D.; STEPHEN LIM, M.D. ;
DENNIS B. LIND, M.D.; ROBERT F. LINDBERG, M.D.; JAMES
LUMENG, M.D.; EUGENE MAGNIER, M.D.; SCOTT MANDEL, M.D.;
FRANKLIN MARCUS, M.D.; TKUO MAEDA, M.D.; CHRISTOPHER W.
MARSH, M.D.; ROBERT C. MARVIT, M.D.; GERALD W.
MAYF[]ELD, M.D.; MICHAEL R. MCCARTHY, M.D.,
individually and dba McCARTHY ORTHOPEDIC REHABILITATION
& SPORTS MEDICINE, INC.; TIMOTHY F. McDEVITT, M.D.;
GERALD J. McKENNA, M.D.; MORRIS MITSUNAGA, M.D.,
individually and dba MORRIS MITSUNAGA, M.D., INC.;
PATRICK CHANDLER MURRAY, M.D.; ROLAND K. NAKASHIMA,
€.D., individually and dba ROLLAND K. NAKASHIMA, M.D.,
INC.; GEORGE F. NARDIN, M.D.; FREDERICK A. NITTA, ¥.D.,
individually and dba FREDERICK A. NITTA, M.D., INC.
JAMES E. ODA, M.D., individually and dba’ JAMES'E. ODA,
M.D., INC.; TIMOTHY PF. OLDERR, M.D.; DAVID LEE PANG,
individually and'dba DAVID LEE PANG, M.D., INC.;
MICHAEL ANTHONY PASQUALE, D.O.; RICHARD ALEXANDER
PERRIE, M.D.; RONALD P. PEROFF, M.D., individually and
dba RONALD P. PEROFF, M.D., INC.; ROBERT L. PETERSON,
M.D., individually and dba ROBERT L. PETERSON, M.D.,
INC! ; MICHAEL SOO-CHEN PI, M.D.; JORDAN S. POPPER,
M.D., individually and dba JORDAN S. POPPER, M.D
INC.; DAVID J. RANDELL, M.D.; ELMBER H. RATZLAFF, M.D.,
individually and dba’ KIHET CLINIC; GARY S. RINZLER,
M.D.; PETER ANDREW RONEY, M.D.; CHARLES SALZBERG, M.D.
individually and dba CHARLES SALZBERG, M.D., INC.7
THOMAS H. SAKODA, M.D.; ROBERT L. SCHIFF, M.D.; JAMES
F, SCOGGIN, III, M.D.; MICHAEL H.7. SIA, ™.D.,
individually’ and dba MICHAEL H.T. SIA, M.D., INC.;
ROBERT REID SLOAN, M.D.; JOHN S. SMITH, M.D.,
individually and dba JoHY S. SMITH, M.D., INC.; TERRY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
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a

G. SMITH, M.D.; CHARLES A. SOMA, M.D., individually and
Gba NORTHSHOR ORTHOPAEDICS AND SPORTS MEDICINE; KEITH
‘SOPER, M.D. individually and dba MAUI SPINOSCOPY;
THOMAS J. SPALLINO, M.D.; SUSAN STEINEMANN, M.D.; JOHN
W. STILLER, M.D., P-A.A.N.; ALLEN STRASBERGER, M.D.,
Yndividually and dba PACIFIC PLASTIC SURGERY, INC.;
RANDALL M. SUZUKA, M.D., individually and dba HALEIWA
FAMILY CLINIC, INC. dba HALRIWA FAMILY HEALTH CENTER;
RAMON SY, M.D.; MASAO TAKAT, M.D., individually and dba
M. TAKAT, M.D,, INC.; TERRY A, VERNOY, M.D.,
individually and dba TERRY A. VERNOY, M.D., INC.
DENNIS b. WATKINS, M.D.; FRANKLIN YAMAMOTO, M.D.; CHOON
KIA YEO, M.D., individually and dba CHOON KIA YEO,
M.D., INC.; WALTER K.W. YOUNG, M.D.; IRA D. ZUNIN,
M.D., M.P.#.7 CHOLBAE KIM, M.D.; FRANKLIN RAMOS, PH.D.;
JAMES A. FERRIER, M.D.;

 

 

   

and

HAMAII STATE CHIROPRACTIC ASSOCIATION, INC.; ROBERT J.
ABDY, D.C., individually and dba ROBERT J. ABDY, D.C.,
INC.; LISA BAPTISTA, D.C., individually and dba)
BAPTISTA CHIROPRACTIC; LARRY BELCHER, D.C.; GARY BELL,
D.C.; GARY M. BELL, D.C., individually and dba SPINAL
BYNAMICS HEALTHCARE CLINIC, also dba KAMAAINA
CHIROPRACTIC; CRAIG BENZEL, D.C.; BEVERLY BIGBEE, D.C.;
THOMAS EDWARD BOWLES, D.C., individually and dba
HALEIWA CHIROPRACTIC CLINIC; CHALMERS LAWSON CANNON,
D.C.; JOSEPH CARDINALLI, D.C.; KEITH CASTILLOUX, D.C.
RIK CEDERSTROM, D.C.; DONALD T.L. CHING, D.C.; DONNA-
LYNN CHING, D.C., individually and dba KAIMUKI BACK
CARE CENTER; AMES CHOW, D.C.; RODNEY CHUN, D.C.; TED
CHUN, D.C., individually and dba MILILANT BACK CARE
CENTER, INC., also dba DOWNTOWN CHIROPRACTIC CENTER;
RANDY R. COLLINS, D.C., individually and dba RANDY R.
COLLINS, D.C., INC., also dba T.A.R.G.E.T.; LAWRENCE
CONNORS, 'D.C., individually and dba FAMILY CHIROPRACTIC
CENTER, also dba WINDWARD REHABILITATION CENTER, also
dba WINDWARD THERAPEUTIC MASSAGE CENTER; JEFFREY DASO,
'D.C., individually and dba KEAHOU CHIROPRACTIC; FRANK
DAVIS, D.C., EDAARD DAWRS, D.C. and JILL DAWRS, D.C.,
individually and dba KEAWE CHIROPRACTIC CENTER; RHODY
EDWARDS, D.C.; LINDA A, PICKES, D.C.; ROBERT GALLAGHER,
D.c., individually and dba TRI STAR HEALTH CARE, INC.;
WILLIAM CARL GALLEGOS, M.S., D.C.; TIMOTHY A, GRIFFIN,
D.C.; ROBERT HARRISON, D.C., individually and dba
ROBERT HARRISON, D.C., INC., also dba SPINAL DYNAMICS
HEALTHCARE CLINIC; JAMES HATTAWAY, D.C.; TIM H.
HENDLIN, D.C., individually and’ dba HENDLIN
CHIROPRACTIC HEALTH CENTER? RANDALL W. HILL, D.C.;

 

 

 

 

 

 

 

 
 

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individually and dba CHTROCENTER; SCOTT T. HIRASHIKI,
D.C., individually and dba HIRASHIKT CHIROPRACTIC
CENTER, formerly known as OAHU FAMILY CHIROPRACTIC
CENTER; ALICE HOLM-OGAWA, D.C.; KARL HYNES, D.C. ;
ANDREW M. JANSSEN, D.C. ; JOHN JAROLIMEX, D.C.; STEVEN
KEY, D.C., individually and dba OHANA HALE CHIROPRACTIC
CLINIC, INC.; GINA KIM, D.C.; WILLIAM KIM, D.C.,
individually and dba INJURY CARE CLINIC; LINDSEY J.
KIMURA, D.C.; individually and dba HAWAII CHIROPRACTIC
CLINIC; EUGENE KITTS, D.C., individually and dba
NEWTOWN CHIROPRACTIC’ & NATUROPATHIC CLINIC, INC. ;
ROBERT KLBIN, D.C., individually and dba KLEIN
CHIROPRACTIC CENTER; TIM P. KRANTZ, D.C., individually
‘and dba CHIROPRACTIC CARE OF HAWAII; DOUGLAS KROLL,
D.C.; PAUL W.¥. KURIHARA, D.C., LMT, individually and
dba CHIROPRACTIC SHIATSU HEALTH CENTER; ANN LANDES,
D.C.; ALEJANDRO LAZO, D.C., individually and dba
ALEJANDRO LAZO, D.C., INC., also dba MAUI SPINAL CARE,
formerly known'as MASTERS, 'D.C., individually and dba
MASTERS BACK AND NECK’ PAIN RELIEF CENTER; DALE
McSHERRY, D.C.; DENNIS MOMYER, D.C., individually and
dba MOMYER CHIROPRACTIC; STACY T. NAGAREDA, D.C.; DEAN
NELSON, D.C., individually and dba WINDHORSE
HEALTHCARE; “YU NGUYEN, D.C.; SUSAN A. NICKERSON, D.C.
individually and dba DIAMOND HEAD CHIROPRACTIC; ‘REX K
NEIMOTO, D.C.; individually and dba REX NIIMOTO, D.c.,
INC., also dba PEARLRIDGE CHIROPRACTIC CENTER; | CHRIS|
NOWICKI, D.C. BARRY J. NUTTER, D.C., individually and
dba HOLISTIC WELLNESS CENTER OF HAWAII, INC., also dba
NUTTER CHIROPRACTIC & SPORTS MEDICINE CLINIC, INC.
RYOICHI OGAWA, D.C., individually and dba OGAWA|
CHIROPRACTIC, INC.; NICHOLAS G. OPIE, D.C.,
individually and dba NICHOLAS G. OPIE, D.C., INC.;
MAUDS PANGANIBAN, D.C.; GREG Y. SONG, D.C.,
individually and dba VALLEY ISLE CHIROPRACTIC; HARVELEE
LEITE-AH YO, D.C.; HOWARD M. MARTIN, IZ, D.C.,
individually and dba BIG ISLAND CHIROPRACTIC, alo dba
‘ACCIDENT INDUSTRIAL INJURY CLINIC; KURT MARIANO, D.C.
MICHAEL J. PANGANIBAN, D.C.; ALAN R. PEARSON, D.C.
RAND PELLEGRINO, D.C.; PAUL K. PESTANA, D.C.;
individually and dba AINA HAINA CHIROPRACTIC CLINIC;
MICHAEL C. PIERNER, D.C., individually and dba KIHE!
CHIROPRACTIC CENTER, INC.} CLINIC; JAMES PLEISS, D.C.;
ALBERT L. POLICE, 'D.C.; JILL POPTER, D.C.; JOHN 7.
RATHJEN, D.C., individually and dba RATHJEN CLINIC;
LAWRENCE A. REDNOND, D.C., individually and dba KAIMUKT
CHIROPRACTIC CENTER; DENNIS G. RAHTIGAN, D.C. ; JEPFREY
B. RONNING, individually and dba RONNING CHIROPRACTIC
RESEARCH, also dba PAMILY CHIROPRACTIC CLINIC OF
KAIMUKI; GARY RYAN, D.C., individually and dba RYAN

 

 

 

 

 

 
*** FOR PUBLICATION ***
See

CHIROPRACTIC OFFICES; GARY K. SAITO, D.C., individually
‘and dba SAITO CHIROPRACTIC OFFICE; LAURIE SHEBS, D.C.;
MITCHEL T. SHIMAMURA, D.C.; GARY M. SOLI, D.C.,,
individually and dba GARY M. SOLI, D.C., INC., dba
CHIROPRACTIC HEALTH SERVICES; BRET STEELS, D.C.;
PATRICK J. SULLIVAN, D.C., individually and dba PATRICK
3. SULLIVAN, D.C., INC., also dba MOANALUA CHIROPRACTIC
CENTER; HOWARD TANG, D.C., individually and dba SPORTS
& FAMILY CHIROPRACTIC CLINIC; GARY TANKSLEY, D.C.,
individually and dba TANKSLEY CHIROPRACTIC OFFICE,
also dba GARY TANKSLEY, INC.; STEPHEN A. TAREK, D.C.
ROBERT T. TODA, D.C.; ROSS TRIVAS, D.C.; FRANCES TULLY,
‘D.C., individually and dba CHIROPRACTIC HEALTH CARE OF
AWAIT; ALFRED R. VALENZUELA, D.C.; DIANA WALTON, D.C.
‘and STEVEN WALTON, D.C., individually and dba LAHAINA
HEALTH CENTER; THOMAS WALTON, D.C., individually and
‘dba LEEWARD CHIROPRACTIC CENTER, INC.; WILLIAM K.
WATANABE, D.C., individually and dba TED S. WATANABE,
INC., also dba McCULLY CHIROPRACTIC CENTER; REX WEIGEL,
D.C. RICHARD L. WILCOX. D.C., individually and dba
WILCOX HEALTH & REHABILITATION CENTER; CANDACE
WILLIAMS, D.C.; KENNETH WILLIAMS, D.C., individually
and dba KENNETH WILLIAMS, D.C., INC., also dba WAIMEA
CHIROPRACTIC CLINIC; DALE K. YAMAUCHI, D.C.,
individually and dba YAMAUCHI CHIROPRACTIC, INC.;
MICHAEL YOUNG, D.C., individually and dba YOUNG HEALTH
CLINIC, INC., also dba HEALTH & ACCIDENT CLINIC, INC.;
RAYMOND YOZA, D.C., individually and dba YOZA
CHIROPRACTIC OFFICE; LOTS CAMPBELL, D.C.; NALAMA
CHIROPRACTIC CLINIC; JOSEPH MORELLI, D.C.; MICHAEL J.
MASTERS, D.C.; LEZLIE BIGNAMI, D.C.

 

 

 

and

HEALTHSOUTH, fka PACIFIC REHABILITATION & SPORTS
MEDICINE (“PRSM"); HEALTHSOUTH, fka PRSM dba EAGLE
REHAB CORP,, a Division of Horizon/CMS; HEALTHSOUTH,
‘tka PRSM dba NAUI REHABILITATION & SPORTS MEDICINE;
HEALTHSOUTH, fka PREM dba KONA REHABILITATION & SPORTS
MEDICINE; HEALTHSOUTH, fka PRSM dba HILO REHABILITATION
& SPORTS MEDICINE; HEALTHSOUTH, fka PRSM dba MAUI
REHAB; HEALTHSOUTH, fka PRSM dba KONA REHAB;
HEALTHSOUTH, £ka PRSM dha HILO REHAB; HEALTHSOUTH, fka
PRSM dba PACIFIC REHAB; HEALTHSOUTH, fka PRSM dba
PACIFIC REHAB, INC.; HEALTHSOUTH, fka PRSM dba THERAPY
‘SPECIALISTS, INC.; HEALTHSOUTH, fka PRSM dba CENTRAL
OAHU REHABILITATION; HEALTHSOUTH, fka PRSM dba ADVANCE
REHABILITATION & SPORTS MEDICINE, INC.; HEALTHSOUTH,
fka PRSM dba LEEWARD BACK & NECK,INC; HEALTHSOUTH dba

 
 

FOR PUBLICATION ***

HEALTHSOUTH REHABILITATION CENTER OF HAWAIT (MAUI) ;
HEALTHSOUTH dba HEALTHSOUTH REHABILITATION CENTER OF
HAWAII SATELLITE 1 (MAUI); HEALTHSOUTH dba HEALTHSOUTH

REHABILITATION CENTER OF HAWAII SATELLITE 2 (MAUI
HEALTHSOUTH dba HEALTHSOUTH REHABILITATION CENTER OF
ANAII SATELLITE 3 (MAUI); HEALTHSOUTH dba HEALTHSOUTH
REHABILITATION CENTER OF KAIMUKI; HEALTHSOUTH dba
HEALTHSOUTH REHABILITATION CENTER OF HONOLULU;
HEALTHSOUTH dba HEALTHSOUTH REHABILITATION CENTER OF
HONOLULU SATELLITE i; HEALTHSOUTH dba HEALTHSOUTH
REHABILITATION CENTER OF WAIPAHU; HEALTHSOUTH dba
HEALTHSOUTH SPORTS MEDICINE & REHABILITATION CENTER
(HILO) ; HEALTHSOUTH dba HEALTHSOUTH SPORTS MEDICINE &
REHABILITATION CENTER SATELLITE 1 (PAHOA) ; HEALTHSOUTH
dba HEALTHSOUTH SPORTS MEDICINE & REHABILITATION CENTER
OF KONA; HEALTHSOUTH dba HEALTHSOUTH REHABILITATION
CENTER OF KAUAI; HEALTHSOUTH dba KINESIS HAWAII INC.;
HEALTHSOUTH dba ALOHA PHYSICAL THERAPY INC. ; THE
INDEPENDENT PHYSICAL THERAPY NETWORK OF HAWAII;
PATIENTS IN TRANSITION; RAINBOW REHABILITATION SERVICES
INC. dba PERCH; ACTION REHAB, INC.; HAWAII ERGONOMIC
AND REHABILITATION CLINIC, INC. ; HAWAII PHYSICAL,
‘THERAPY, INC.; ISLAND REHAB, INC.; MAUKA PHYSICAL
THERAPY; JOHN EASON, P.T., individually and dba KONA
PHYSICAL THERAPY, LTD.; RICHARD E. BLITZER, R.P.T.
GREG S. COLLINS, L.M.T.; ANTHONY DiFRANCISCO, L.M.T.;
CHARLES GARDNER, individually and dba LAHAINA
ACUPUNCTURE & MASSAGE CENTER; BETTY LAU, L.M.T.
individually and dba HALOA; RONALD ¥. HANAGAMI, P.T.;
SCOTT HARVEY, individually and dba BIOFEEDBACK’ CENTER
OF THE PACIFIC, INC.; BRIAN H. HOZAKI, individually and
dba HOZAKI PHYSICAL THERAPY; JONATHAN B. LIGHT, M.D.,
B.A.C.; MAITREYI R. LIGHT, L.M.T.; K.T, MELLON, L.A.C.,
M.A.S.; JENNIFER NICKLAW, L.M.T.; NEIL PRIMACK, P.T.,
individually and dba INTEGRATIVE PHYSICAL THERAPY;
LORITA WHITNEY, individually and dba WITKO, INC. dba
HAWAII KAI THERAPEUTIC CENTER, also dba HOLISTIC CENTER
OF THE PACIFIC, INC.; VICTOR M. YAMAMOTO, individually
and dba UNIVERSAL MASSAGE; KALIHI REHAB SERVICES, INC.
WAIANAE VALLEY PHYSICAL THERAPY, INC. ; WAIPAHU PHYSICAL
THERAPY, INC.; RUSSELL K. YAMADA, P.T. dba TOTAL
FITNESS PHYSICAL THERAPY; ACTIVE REHAB; ACUPUNCTURE
ASSOCIATES OF OAHU; HEALTH VENTURES, INC.; PACIFIC
PHYSICAL THERAPY, INC. ; ALLAN YAMAUCHI, L.M.T.
HAWAIIAN REHAB SERVICES, INC.; DREW YAMAMOTO, L.M.T.;

  

 

 
 

   

 

 

   

and

 
*** FOR PUBLICATION ***

 

WORKSTAR OCCUPATIONAL HEALTH SYSTEMS, INC.; MAUI
OCCUPATIONAL HEALTHCENTER, INC.; KABBA ANAND, D.A.C.;
ELLY HUANG, D.P.M.; PAULA LENNY, M.D.; JENNIFER
NICKLAW, L.M..; BRETT SNELLGROVE, R.P.7.;

Plaintiffs-Appellants,
vs.

HAWAIIAN INSURANCE & GUARANTY COMPANY, LTD. ; FIRST
INSURANCE COMPANY OF HAWAII, LTD.; GEICO; PACIFIC
INSURANCE COMPANY, LTD.; DAI-TOKYO ROYAL STATE
INSURANCE COMPANY, LTD.; PROGRESSIVE ADJUSTING COMPANY,
INC.; BUDGET RENT-A-CAR SYSTEMS, INC.; AIG HAWAIT
INSURANCE COMPANY, INC. ; UNITED SERVICES AUTOMOBILE
ASSOCIATION; ISLAND INSURANCE COMPANY, LTD.; ADP
INTEGRATED MEDICAL SOLUTIONS, INC. fna MEDICAL BILLING
REVIEW SERVICES, INC.; MEDCOST, INC. ; ALLSTATE
INSURANCE COMPANY; ALEXIS; LIBERTY’ MUTUAL GROUP; STATE
FARM INSURANCE COMPANY; TIG INSURANCE COMPANY; AETNA
LIFE & CASUALTY; CRAWFORD & COMPANY; FIREMAN’S FUND
INSURANCE COMPANY; TOKIO MARINE & FIRE INSURANCE
COMPANY, LTD.; TRAVELERS PROPERTY CASUALTY; JOHN DOES
1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10; DOB
CORPORATIONS 1-10 and DOE ENTITIES 1-10,

 

 

 

 

Defendants-Appellees.

 

NO. 24634

APPEAL FROM THE FIRST CIRCUIT COURT
(CIV. NO. 98-1752-04 (VLC))

DECEMBER 7, 2005
MOON, C.J., LEVINSON,JJ.; CIRCUIT JUDGE WALDORF,
IN PLACE OP NAKAYAMA, J., RECUSED;
INTERMEDIATE COURT OF APPEALS ASSOCIATE JUDGE LIM,
IN PLACE OF ACOBA, J., RECUSED; AND CIRCUIT JUDGE
HIRAI, IN PLACE OF DUFFY, J., RECUSED
OPINION OF THE COURT BY MOON, C.J.
Plaintiffs-appellants, approximately 322 unaffiliated
Hawai'i health care providers (hereinafter, collectively, the

providers], bring this interlocutory appeal pursuant to Hawai'i

-7-
*** FOR PUBLICATION ***

 

Revised Statutes (HRS) § 641-1(b) (1993),* challenging the August
30, 2001 nonfinal appealable ruling of the Circuit Court of the

First Circuit, the Honorable Virginia L. Crandall pré

 

ting,
denying their motion for partial summary judgment ané granting
partial summary judgment in favor of defendants-appellees
automobile insurers and adjusters (hereinafter, collectively, the

insurers).*

2 ums § 641-1(b) provides, in relevant part, as follows:

pen application made within the tine provided by the miles

of court, an appeal in a civil matter nay be allowed by a

circuit court in ite discretion... from any interlocutory
‘whenever the circuit court may

for the speedy tersination of

 

 

Litigation before it.

2 pitially, Dai-Tokyo soyal state insurance Company, Ltd.; First
Ingurance Company of Hawaii, Ltd.) Governnent Enployees Insurance, Co.

(GEICO); Progressive Adjusting Company, Inc.; Budget Rent-A-Car Systems, Inc.;
AIG Hawaii Ingurance Company, Ine.} Teiand Ineurance Company, Ltd.; Liberty,
Mutual Group; State Farm Insurance Company; TG Insurance Company; Firenan’s
Fund Insurance Conpany: and Tokio Marine and Fire Insurance Company, Led.
hereinafter, collectively, the Dai-Toyko insurers) were the only asur
jointly file the cross-notion for summary judgwent. "On February 9, 200%,
Hawaiian Tegurance and Guaranty Conpany, Led, filed ite motion to join the
Daf~Tokyo insurers’ crose-moticn for sumary judgenent. "On February 13, 2001,
Pacific ineurance Company, utd. filed ite joinder notion and on February 21,
2001, Crawford & Conpany filed the sane

 

 

 

om appeal, the Dai~Toyko insurers filed their answering brief, which
crawford and Company joined. Pacific Insurance Company, Aecaa Life &
Gasuaity, and travelers Property Casualty filed a separate anawering brief.
‘This court need not address the arguments presented in that brief because the
providers, on Novesber 18, 2002, fiied a stipuiation for partial dismissal of
Eheiz appeal against these three insurers, Tt should further be noted that
Island ingurance filed ite own angwering brief after it substituted The
Pacific Law Group as counsel, essentially adopting and incorporating by
Feference the argunents set forcn by the Dai-Tokys ineur

 

 

   

 

Aithough not relevant to this appeal, other nared defendants in this case
include Hawailan Insurance and Guaranty Co., Led. Allstate Insurance Co-1
Alexis; John Does 1-10; Jane Does 1-10; Doe’ Parsnerships 1-10; Doe
Corporacions 1-10) and Doe Entities 1-10, ‘The procedural history of this c
Shows that the providers stipulated to the dismissal of ADP Integrated Medi
Solutions, Ine. fka Medical Billing Review Services, Thc., end Nedcost, Tne
on May 10, 2000, United Services Automobile Association on Decenber 29, 2000,
land Acclanation Insurance Managenent Services on August 3, 2001

 

       

 

 

 
*** FOR PUBLICATION ***
a
on appeal, the providers argue that the circuit court

erred in: (1) finding that the written notice of denial of
benefits mandated by HRS § 431:20C-304(3) (B) (1993), quoted
infra, (hereinafter, HRS § 431:10C-304(3) (B), Section (3) (B), oF
the subject statute] is inapplicable to the subject billing
disputes; (2) concluding that Hawai'i Administrative Rules (HAR)

§ 16-23-120 (1993), quoted infra, applies; and (3) retroactively
applying the May 30, 2000 legislative amendments to the subject
statute and the September 16, 2000 Insurance Conmissioner’s Order
in GEICO v. Dep't of Commerce & Consumer Affairs (DCCA), INS-DR-
2001-1.

For the reasons discussed herein, we vacate the circuit
court's August 30, 2001 order denying the providers’ motion for
partial summary judgment and granting partial summary judgment in
favor of the insurers and remand this case for further
proceedings consistent with this opinion.

1. BACKGROUND
A. Factual Backaround
‘The facts of thia case are uncontested. Between

January 1, 1993 and December 31, 1999, each of the providers

 

submitted bills to one or more of the insurers for non-emergency
treatments rendered to thousands of personal injury protection

(PIP) ingureds allegedly injured in motor vehicle accidents. The
insurers were obligated to pay appropriate PIP benefits under HRS

chapter 431:10C on behalf of their insureds. For purposes of

 
*** FOR PUBLICATION ***

——

billing, the existing workers’ compensation fee schedule was
adopted as the payment fee schedule applicable to medical and
rehabilitative services provided as no-fault benefits for persons

0c-308.5(a) and (b)

  

injured in automobile accidents. HRS §§ 431:

0C-308.5(a), “the term ‘workers’

  

(2993), Under section 43
compensation schedules’ means the schedules adopted and .

establishing [the] fees and frequency of treatment guidelines.

 

The workers’ compensation schedule assigns a medical procedure
code and a fee to each item of service rendered by health care
providers. The providers, in preparing their bills for
submission to the insurers, are required to follow the “fees and
frequency of treatment guidelines" contained in the workers’
compensation schedules. HRS § 431:10C-208.5(b). The insurers,
however, rather than pay the bills as submitted, or deny the
claim (in whole or in part), altered the treatment code because
they believed that, “{blased on the available information, the
services rendered appear to be best described by [a different
medical treatment) code. The resulting effect of changing the
treatment codes was a reduction in the payment for the service

rendered, which the parties generally refer to as “down-coding.”?

 

2 A description of ‘dowm-coding” can be found in several affidavite
that were attached to the summary judgnent notions and basically explain the
sene procedure. For example, the affisavit of Darcy Tavares, a provessional
coder certified by the Anerican of Acadeny of Profersional Codere and a
Licensed independent bill reviewer, describes several snetances where 2
provider listed a redical treatnent code and its attendant cont on the billing
Statenent, and her reasons for dows-coding. In one of those instances, @
charge was subsitted by the provider for an initial office visit, with code
99203 and the corresponding fee of §76.37. Tavares notes that code 9209
requires the provider to meet “three conponents of subscantiating che clais by

‘continued...

 

 

-10-
 

* FOR PUBLICATION ***

 

‘The insurers, thus, (1) paid the bills pursuant to the adjusted
treatment codes and (2) offered to negotiate with the providers
as to the unpaid portions.
B. Procedural Backaround

on April 15, 1998, the providers filed a complaint
against the insurers for the alleged underpayment for services
rendered under their respective no-fault insurance contracts.
count I alleged that the insurers unlawfully down-coded, thereby
xeducing the amounts of the providers’ bills without issuing

0c-304(3) (B), oF

 

denial letters, in violation of HRS § 43:

seeking peer review, as required by HRS § 431:10C-308.6 (1993).

(continued)
the subuission of ~ (i) history, (4i) physical exanination information, and
(340) ‘wedical decision making(.j* The provider, hovever, submitted only a
Schacked-off" list that these three itens were done, withost he proper
Gocunentation. Because the provider failed to meet the three submienion
Fequirenents for code 39203, the changed the code to. 99202, which, in her
View, sore appropriately conformed to she documentation eubmitted. As a
Fesuit, the provider was paid the applicable fee for code 99202, ie., $55.40
Tavares’ affidavit explains other Gown-coding instances that basically amount
to matching the documentation provided with what was deemed to be the
appropriate treatment. code.

 

 

+ on gune 19, 1997, HRS § 432110C-308.6 was repealed by Act 251. 1997
Hav. Sega. L., Act 251 § 50 at 551. The repeal went into effect on January 1,
1998. "Id. ai'ss3. However, at the relevant times herein, HRS § 4321100-308.6

provided in relevant pare:

 

(a)... . 1€ an insurer desires to challenge:
treatment and rehabilitative services in excess of the fee
Schedules or treatment guidelines, the insurer may 40 20 by
filing, within five working days Of a request made pursuant
to subsection (4), a challenge with the commissioner for
Submission to a péer review organization

 

 

 

ig) “1 the incurer challenges a bill for medical
eveatnest or rehabilitative services within thirty days of
Feceipt, the insurer need not pay the provider for the
Aigputed portion of the bill subject to the challenge until
2 determination has been nade by the peer review
Organization

(h) Té @ peer review organization determines that
erestnent of rehabilitative services were sepropriste and

(continued

 

-1n-
*** FOR PUBLICATION ***

 

Count 11 alleged that the insurers breached their no-fault
insurance contracts by failing or refusing to pay for services
rendered.’ The complaint sought declaratory and injunctive

relief against down-coding of the providers’ bills and danages

for the underpaid amounts of the bills. ‘The providers’ complaint

 

involves disputes regarding over 30,000 bills, approximately

 

10,000 of which have been produced in discovery.
In May 2000, Act 138 was signed into law, which anended

HRS §§ 431:10C-304 and 431:10C-308.5 by, anong other things,

adding section 6 to HRS § 431:10c-304 and section (e) to HRS

§ 431:10C-308.5. Section 4 of the act stated that *[t]his act

  

shall take effect upon its approval.* 2000 Haw. Sess. L. Act
138, § 4 at 271. The act was approved on May 30, 2000. Id. The
new subparagraph (6) of HRS § 431:10C-304 (Supp. 2004) states:

Disputes between the provider and the insurer over the
anount of a charge or the correct fee or procedure code to
be used under the workers’ compensation supplemental medical
fee schedule shall be governed by section 431:10C-308.51.)

 

HRS § 431:10C-308.5(e) (Supp. 2004) states:

 

-continued)
Yeasonable, che insurer shall pay to the provider the
Outstanding ancunt plus interest at a rate of one and
Gne-half percent per month on any amount withheld by the
insurer pending che peer review.

 

 

‘The complaint originally contained five counts. Counts 2, Ir, and
Ut allege chat the insurers arbitrarily, unlawfully or {Llegally “dow coded"
the bills subsicted by the providers so that coverage for the services
provides would be less; Count iv alleges that the insurers’ action
Feonstitutes an unfair claim settienent practice,” in violation of HRS
§ 431:13-103 (a) (10); and Count V alleges a cause of action for unfair and/or
deceptive acts and/or practices, in violation of HRS § 480-2. In thelr second
‘anended complaint, the providers added Counts VI and VII, alleging clains of
violations of HRS’ $§ 431:10C~10i, ex gag, 431:10¢-304, and 431:30C-308. The
complaint, however, was finally anendea 20 contain only Counts T and IT

wie

 

 

 

  

 
*** FOR PUBLICATION ***

in the event of a dispute between the provider and the
insurer Over the amount of a charge or the correct fee or
procegure code to be used under the workers’ compensation
Ripplenentel medical fee schedule, the insurer shall:
Ti) pay all undieputed charges within thirty days
After the insurer has received reasonable proot
Gf the fact and amount of benefits accrued ané
Genand for payment thereof; and
(2) Negotiate sf good faith with the provider on the
Gleputed charges for a period up to sixty days
atter the insurer has received reasonable proot
Gf the fact and amount of benefits accrued and
Genand for paynent. thereof
if the provider and the insurer are unable to resolve the
Aleputer the provider, insurer, or claimant may mubmit the
Gispute to the comissioner, arbitration, or court of
Competent juriediction. Tee parties shail include
Gotinencation of the efforts of the insurer and the provider
fo reach a negotiated resolution of the dispute,

 

 

 

 

‘Thereafter, on January 10, 2001, the providers moved
for sunmary judgment on Count I as to eleven bills, involving
five providers and ten insurers, for services rendered between
May 28, 1993 and August 5, 1998. The providers asserted that
these bills were unlawfully reduced twenty to sixty percent by
down-coding and without complying with certain statutory
provisions, The providers specifically contended that: (2) the
insurere’ practice of “unilaterally changling] the medical
procedure codes or refus(ing] to pay the procedure codes, as
submitted, to reduce the overall amount of the bill[,]" was
“t1iegai{,]* because such practice is contrary to the peer review
procedure mandated by HRS § 431:10C-308.6; and (2) the insurers
were in technical violation of Section (3) (B) for failure to
provide written notices of their denials of all or part of a
claim within the mandated period.

on February 2, 2001, the insurers filed cross-motions

for partial summary judgment on Count I as to the eleven bills,

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*** FOR PUBLICATION ***

 

arguing that the bills were lawfully adjusted and that the
underpayments were negotiable. The insurers averred that,
because they accepted all treatments rendered in connection with
the eleven bills as reasonable, neceesary, and appropriate, they
were not obligated to issue a written denial purauant to Section
(3) (B) or seek peer review under HRS § 431:10C-308.6. The
insurers sought a ruling, as a matter of law, that they utilized
the correct billing dispute resolution mechanism when they paid
the undisputed portion of the bills at issue and offered to
negotiate the remaining balance in accordance with HAR

§ 16-23-120 and the 2000 amendment to HRS § 431:10C-308.5. In
support of their position, the insurers relied upon (1) the
Insurance Commissioner's Order in GEICO, issued on September 18,
2000, adopting the insurers’ position in its entirety and (2) the
May 30, 2000 legislative amendments to HRS §§ 431:10C-304 and
431:10C-308.5.

After a hearing on February 23, 2001 on both motions,
the circuit court, in its minute order of August 3, 2001, denied
the providers’ motion for partial summary judgment and granted
the insurers’ cross-motion, essentially adopting the insurers’
arguments, namely, that HRS §§ 431:10C-304 and 431:10C-308.6 are
inapplicable to the facts of this case and that HAR § 16-23-120
applies. On August 30, 2001, the court entered it written

ruling, wherein it found and concluded that

o14-
*** FOR PUBLICATION ***

 

phe bitte at 4
insurer has accepted the treatment as reasonable and
appropriate and has paid the undisputed amount of the bill
and are not bills for which the [insurers] were required to
issue a forsal denial or sesk peer review of the billing
Aieputes. Further, the Court finde that the *72-hour
treatment" cases are inapposite to che instant matter

GWAR} Sec. 16-23-120 (1993) applies. The Court holds that
the [insurers] utilized the correct billing] dispute

nechanisn. (*)

 

 

Im the meantime, the providers, on August 27, 2001, filed a
motion for clarification of the circuit court’s minute order.
‘The motion sought to clarify that the court's order applied to
only those billing disputes arising after January 1, 1998, the
date the peer review statute was repealed. ‘The court denied the
motion on October 15, 2001.

Prior to the denial of their motion for clarification,

the providers, on September 14, 2001, filed a motion for

 

certification of the order granting the insurers’ cross-notion
for partial summary judgment and denying the providers’ motion,
pursuant to Hawai'i Rules of Civil Procedure (HRCP) Rule 54(b)

(2000),” or, in the alternative, for leave to file interlocutory

§ Although the minute order stated that Judge Crandall granted partial
sumary judgnent as to the joinders to the Dal-Tokyo insurers’ ‘cross-motion,
the foreal order only expressly reflects the grant of partial summary Jodgment
In favor of the Dai-Tokyo insurers.

  

nce mule 54(b) provides, in pertinent part, as follows

(b) udgnent upon multiple clains or involving
multiple parties. when nore than one claim for relief is

 

 

resented in an action, the court nay direct the entry
of a final judgrent as to ‘one or nore but fever than all of
the claims or parties only lupen an express direction

for the entry of judgment. “ra the ahsence of such

determination and direction, any order or other form of

Geciston, Rovever designated, which adjudiestes fewer than

al! the clains or the rights and abilities of fewer than

11 the parties shall not terminate the action as to any of

the elaine or parties, and the order or other form of
(continued.

 

 

o15-
*** FOR PUBLICATION ***

After a hearing on September 27, 2001, the circuit

 

appeal
court filed ite order, dated October i, 2001, denying the

providers’ request for HRCP Ru’e 54(b) certification, but
granting leave to file an interlocutory appeal, finding that,

under the specific circumstances of this case(.] a
significant riling has been issue on che bill (ing) dispute
mechanism and that an interlocutory appeal will provide for
W'apeedier termination of the litigation.

 

on October 18, 2001, the providers filed a timely notice of

appeal.”
12. STANDARDS OF REVIEW

A. Summary Judament

“We review the circuit court’s grant or denial of

summary judgment de novo.” Yamagata v. State Farm Mut. Auto.
Img. Co., 107 Hawai'i 227, 229, 112 P.3d 713, 725 (2008) (citing

 

continued)
Gecivion se subject to revision at any tine before the entry

Of judgment adjudicating all ehe claims and the rights and
Uabiiseles of all the parcie!

(Bephasie in original.)
+ mis court hae indicated thats

Ae a general matter, an appellate court's jurisdiction is
Pieleedto's review of einel judgmenta, orders and decrees
A judgeent le final when sil Claims of the parties to the

Cage have been terminated. Absent the entry of final
Sosgnest, ae to all claims, an appeal nay generally be taken
froma nontinal order or decree if (1) leave to take
Enterlocutory appeal has been granted by the circuit court
pursuant to HRS § €41-1(b);, (2) the order or decree has been
Gereified as final for appeal purposes pursuant to [HRCP)
Rule s4(b) (01

   

 

 

1 a ion, Te-, 87 Hawai'i 37, 49, 951
AE 94, 98-59, 924 P.28

Fought & co, inc, v, Steel fna’a & Erection,
Brad 487, 495-(2998) (eiting Kong v. Takevehi, 63 ia

568, 292-93 (app. 1996)) (eone Brackets added) (sone brackets in criginal).

 

 

+ an order extending the tine for appeal was entered september 25,
2002, extending the tine for appeal fron Septenber 29, 2001 to October 29,
2oot ‘because the notion for interlocutory sppesl had bean calendared for
hearing on October 22, 2002

-16-
*** FOR PUBLICATION ***
ee
wad red: v 94 Hawai" 223, 223, 22

P.3d 1, 9 (2000)). The etandard for granting a motion for

summary judgment is well established:

 

[slunmary judgeent is appropriate if the pleadings,
depoeieigns, snawers to interrogatories, nd admissions on
file, together with the affidavite, if any, show that there
{eno genuine issue as to eny material fact and that the
noving’party ie entivied to judgment as a satter of law. A
fact Je material if proof of that fact would have the effect
Of establishing or refuting one of the essential elements of
a cause of action or defense asserted by the parties. The
Evidence must be viewed in the Light most favorable to the
Sonmoving party. Invcther words, we must view all of the
Gvidence and the inferences dvawn therefros in the Light
fost favorable to the party opposing the motion,

Querubin v. Thronas, 107 Hawai'i 48, 56, 109 P.3d 689, 697 (2008)
(citations omitted) (brackets in original).
Statutory Interpretation

“Questions of statutory interpretation are questions of

 

 

 

law to be reviewed de nove under the right/wrong standard." Guth
v. Freeland, 96 Hawai'i 147, 149-50, 28 P.3d 982, 984-65 (2001)
(citations omitted).
IIT, DISCUSSION

As previously stated, the providers, on appeal, advance
three points of error regarding the circuit court’s order denying
their motion for partial summary judgment and granting the
insurers’ cross-motion, alleging that the circuit court erred in:
(2) finding that the insurers were not required to issue formal
written notices of denial for partial payment of medical bills

pursuant to HRS § 431:10C-304(3) (B); (2) ruling that HAR

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FOR PUBLICATION ***

 

§ 16-23-120 applies to the subject billing disputes; and

 

(3) relying on the subsequent legislative amendments and the
Insurance Commissioner‘s decision in GEICO for any medical bill
submitted prior to May 30, 2000.

A. - BI

 

Preliminarily, we note that an insurer's obligation to
pay no-fault benefits" is set forth in HRS § 431:10¢-304(3) (A),
which provides that “[p]ayment of no-fault benefits shall be made
within thirty daye after the insurer has received reasonable
proof of the fact and amount of benefite accrued, and demand for
payment thereof.” (Emphasis added.) In other words, an insurer
shall pay no-fault benefits within thirty days of receipt of a

provider’s billing statement showing “the fact,” ive., the

“Because the providers, on appeal, error in the circuit

court’s conclusion that the indurers’ dispute over fees and procedure codes ie

hot subject to the (now repeaied) peer review statute, HRS §'431:100-308-€,

the providers have waived thie argunent for purposes of this appeal. gee iing

a vokovana, $1 Hawai'i 131, 135, 80 7.24 1005, 1009 (App. 1999) (citing Zou
78 Hawai'i 21, 29 0.19, 889 P28 705, 73 n.39,

   

    

 

(oesiy-

% stlonfault benefits are defined in HRS § 432:100-203(20) (A) and
states in relevant pare

(A) o-fault benefits, sometines referred to as personal
injury protection benefice, with respect to any,
accidental harm mean:

(i) R12 appropriate and reasonable expenses
ily incurred for medical, hospital

Surgical, professional, nursing, ‘dental,

optonetric, anbulance, prosthetic services

products and accomodations furnished, and
x-ray

All appropriate and reasonable exsensee

necessarily incurred for peychiatric, physical,

‘and occupational therapy and renabilitatients]

 

    

 

 

 

   

 

-18-
 

*** FOR PUBLICATION

 

treatment services, and ‘the amount of benefits," ise, the

 

charges or cost of treatment services
At the time the providers’ claims arose, Section (3) (8)

provided:

(B) Subject to section 431:10C-308.6, relating to peer

Feview, if the inurer elects to deny'a claim for’
benetite in whole or in part. the insurer shall

‘within
thirty days gotity the Claimant i writing of the

i ‘The denial
Botice shall be prepared and salted by the ineurer in
triplicate copies and be in a forsat approves by the
Commissioner. In the case of benefite for services,
Specifies in’ section 431:10¢~203(10) (A) (1) ana (1!)
the insurer shall also mail a copy of the denial eo
the provider.

(Emphases added.) The providers maintain that the subject

 

 

statute clearly sets forth the applicable procedure when an
insurer wishes to deny ‘a claim for benefits,* that is, treatment
services and/or costs, “in whole or in part" and that any partial
Payment of medical bills constitutes a denial and triggers the
insurer's obligation under the statute to provide written notice
within thirty days. In response, the insurers assert that, where
they have accepted the treatment rendered as reasonable and
appropriate and the sole dispute concerns the appropriate charges
for that treatment, such dispute is outside the scope of the
subject statute. Thus, the dispositive issue on appeal is
whether ‘a claim for benefits" under HRS § 431:10C-306(3) (B)
encompasses treatment services and the costs attendant thereto
such that a denial of services and/or costs, in whole or in part,

triggers the notice requirement specified in the statute.

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FOR PUBLICATION ** *

 

We begin our analysis by examining the plain language
of the statute at issue. Zanakis-Pico v, Cutter Dodge, Inc., 98
Hawai'i 309, 316, 47 P.34 1222, 1229 (2002). Tn ao doing, “our
foremost obligation is to ascertain and give effect to the
intention of the legislature, which ie to be obtained primarily
from the language contained in the statute itself." Yamagata,
107 Hawai'i at 229, 112 P.3¢ at 715 (citations omitted); see also
Allstate Ins. co. v. Schmidt, 104 Hawai'i 261, 265, 88 P.3d 196,
200 (2004) (*{WJhere the language of the statute is plain and
unambiguous, our only duty is to give effect to its plain and
obvious meaning." (Citations omitted.) (Brackets in

original.)).

As previously indicated, the insurers maintain that
they were not obligated to provide notice because the sole
dispute centered around the charges and not the treatment
services. Section (3) (8), however, does not limit an insurer’s
obligation to provide notice only when the insurer elects to deny
a claim for treatment services. In reading the first and second
sentence of Section (3) (5), it is clear that "a claim for
benefita’” includes both treatment services and the charges
attendant thereto. The first sentence of Section (3) (B)
indicates that any denial of ‘a claim for benefits," either in

whole or in part, requires the issuance of a denial notice to the

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*** FOR PUBLICATION ***

 

 

claimant. The second sentence states: ‘In the case of
benefits for services . . . the insurer shall also mail a copy of

the denial to the provider." (Bmphases added.) In other words,
if an insurer elects to deny a claim for treatment services
and/or cost, in whole or in part, it must notify the claimant; if

the denial involves treatment services, the insurer -- in

 

addition to notifying the claimant -- mist also notify the
provider of the denial. If we were to limit the phrase “claim
for benefits’ as used in the first sentence of Section (3) (8) to
treatment services only, as the insurers urge, the second
sentence would be rendered superfluous. See In xe City & County
of Honolulu Corp, Counsel, 54 Haw. 356, 373, 507 P.2d 169, 178
(1573) (applying the “cardinal rule of statutory construction
that a statute ought upon the whole be so constructed that, if it

can be prevented, no clause, sentence or word shall be

 

superfluous, void, or insignificant” (citations omitted)

(emphases added) ).

 

We further note that nowhere in HRS § 431:10C-304 does

to down-code the billings. tn fact,

 

it authorize the insur

HRS § 431:10C-304(3) (C) specifically provides

 

under ERS § 432/10C-204(3) (B), denial notices of a claim for
benefits are made to the claimant and not the providers, as they suggest.
Nonetheless, Jt ie undisputed that the snaurere di not provide notices to
either che claisants or the providers

 

o21-
*** FOR PUBLICATION ***

 

if the insurer cannot pay of deny the claim for benefice
because additionsl information or loss documentation se
heeded, the insurer shall, within thirty days, forvard to
the claimant an itemized iiet of all the requirea documents
In the case of benefits for services specifies in section
aS11100-103 (a) (1) and (44) (eee gupra note 13], the insurer
shall algo forvard the list to the service provider.

(Bnphases added.) Inasmuch as the insurers’ down-coding was

 

 

based on lack of sufficient information to support the declared
treatment code, the insurers were required to forward to the
claimant and the provider “an itemized list of all the required
docunents.*

In light of the unambiguous mandatory language of HRS
§ 431;100-304(2) (B), an insurer ie required to provide written
notice of its denial -- in whole or in part -- of the clain for
benefits. written notice to the clainant is required where the

to the treatment service and/or

 

denial or partial denial relat:
the charges therefor. where the denial or partial denial
involves treatment services, the insurer must also provide
weitten notice to the provider. We, therefore, hold that the
circuit court erred in ruling that “billing disputes where the
Ansurer(s] halve] accepted the treatment as reasonable and
appropriate and halve] paid the undisputed amount of the bill
_ are not bills for which the [insurers] were required to
issue a formal denial [in accordance with Section (3) (B) .]*

B. Dicabilit 120

 

‘The providers next contend that the circuit court
erroneously concluded that HAR § 16-23-120 applies to the instant

billing disputes. The insurers maintain that HAR § 16-23-120,

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*** FOR PUBLICATION ***

 

which provides a billing dispute resolution mechanism, controls
and that, therefore, the billing disputes at issue fall outside
the purview of HRS § 431:10C-304(3) (B)

HAR § 16-23-120, entitled “Dispute Regarding Charges,”

adopted by the Ineurance Commissioner in 1993, provides in

 

fd pursuant to Exhibit “A to
ie) the insurer shall pay

all charaes notin dispute i negotiate in good faith

With the provider on the disputed charges. Such diaputes

 
  

(b)- Tf che provider and the insurer cannot resolve
the dispute, either party nay make @ request to the
commissioner for a nearing.
(Emphases added.) We recognize that the Insurance Commissioner
has the authority to promilgate administrative rules pursuant to

HRS § 43)

 

oc-214 (1993)” and, most significantly, "to adopt
administrative rules relating to fees or frequency of treatment*
as permitted by HRS § 431:10C-308.5(b). We also recognize that
an administrative agency's interpretation of its own rules ‘is
normally accorded great weight.” Coon v. City & County of
Honolulu, 98 Hawai'i 233, 251, 47 P.3d 348, 366 (2002). However,

“i]t is axiomatic that an administrative rule cannot contradict

 

SERS § 492:200-214 provides in pertinent part!
In order to carry out the provisions and fulfill the
purpose of thie article, the commissioner shall:

{2} Aaope, amend and repeal such rules, pursuant to
chapter $1, a the commissioner dens necessary to carrying
out and fulfilling the purposes of this article, and to
establishing standards for the prompt, fair and equitable
Gigposition of all claine arising out of moter vehicle
accidents {1

    

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oF conflict with the statute it attempts to implement." Aggalud

Blalack, 67 Haw. S88, 591, 699 P.24 17, 19 (1985) (citations
omitted). Pursuant to HRS § 91-7(b) (1993), this court “shall
declare the [administrative] rule invalid if it finds that it
violates . . . statutory provisions, or exceeds the statutory
authority of the agency, or was adopted without compliance with
statutory rulenaking procedures.” See also In re Water Use
Remit Applications, 94 Hawai'i 97, 145, 9 P.34 409, 457 (stating
that ‘we have not hesitated to reject an incorrect or
unreasonable statutory construction advanced by the agency
entrusted with the statute's implenentation"), reconsideration
denied, as amended, 94 Hawai'i 97, 9 P.3d 409 (2000).

under HAR § 16-23-120, disputes relating to “the amount

of a charge or the correct fee and procedure code" need not "be
filed with the [Insurance] Commissioner for submission to [pleer
[rleview." Rather, it authorizes insurers to make partial
payment of charges “not in dispute’ and negotiate with the
providers on “the disputed charges." The peer review exemption,
however, clearly conflicts with the plain language of HRS
§ 431:10C-304 (3) (B) that was in existence before the repeal of
the peer review statute. Prior to the repeal, an insurer's

denial of benefite, in whole or in part, was *[s]ubject to

 

e review." HRS

 

section 431:10C-308.6, relating to p
§ 431:10C-304(3) (B), Inasmuch as HAR § 16-23-120 exempts

ingurere from the peer review procedure for controversies

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relating to treatment services and/or the coste attendant
thereto, we hold that HAR § 26-23-120 contravenes the express
requirement of Section (3) (B) and is therefore void and
unenforceable to this Limited extent.

As a result of the January 1, 1996 repeal of the peer
review statute, the legislature deleted the phrase *[s]ubject to
section 431:10C-308.6, relating to peer review" from Section
(3) (B) ae part of the 2000 amendments to HRS § 431:10C-304.
‘Thue, an insurer's denial or partial denial of a claim for
benefits is no longer subject to peer review." Accordingly, HAR
§ 16-23-120 does not conflict with the plain language of the
subject statute as of the repeal date of the peer review statute.
However, we emphasize that nothing in HAR § 16-23-120

(a) relieves the insurers of their obligation to provide the

 

written notice required by HRS § 431:10C-304(3) (B) when the
insurer wishes to challenge, in whole or in part, a bill for
medical treatment or (2) authorizes the insurers’ practice of
down-coding. Accordingly, to the extent that HAR § 16-23-120 is

consistent with the subject statute after January 1, 1998, we

 

MWe note that HRS § 432:10C-212 (1993) provides a remedy for a denial
of benefits, stating that:

(a) If a claimant or provider of services object to
the denial of benefits by an ineurer or self-insurer
pursuant to section 432-100-204 (3) (3) and desires an
Administrative hearing thereupon, the claimant or provider
Of services shall file with the Commissioner, within
Gaya after the date of denial of the claim, |. (2) a
written request for review(.]

 

   

Further, ed § 431/100-2129 (1993) permite the submisaion of any dlepute
felating to a so-fault policy to an arbitrator fy filisg written request with
the clerk of the circuit court in the circuit where the accident occurred.”

 

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hold that the insurers remain obligated to provide formal

denial notices of a clain for benefite in accordance with

Section (3) (3).

cc. Retze: Ov. BOCA
The providers argue that, in concluding that HAR

§ 16-23-120 applies, the circuit court erred in retrospectively

applying (1) the subsequent legislative anendnents to HRS

§§ 431:10C-304 and 431:10C-308.5 as well as (2) the Insurance

  

Commissioner's Order in GEICO issued on September 18, 2000. In
support of their contention, they point to the August 30, 2001
order. The order, however, made no reference to the amendments
or the GEICO decision, and it is unclear from the record whether
the circuit court relied, if at all, upon them. Because the
providers did not direct us to anywhere else in the record that
demonstrates the circuit court retroactively applied the
amendments or the decision, we believe they have failed to meet
their burden of showing that the circuit court erred. Ala Moana
Boat Owners’ Asa’n vy. State, 50 Haw. 156, 159, 434 P.2d 516, sia,
xeb’o denied, 50 Haw. 181, 434 P.2d 516 (1967); see also Inze
Eetate of Lee Chuck, 33 Haw. 445, 451-52 (1935) ("[There is] a
general presumption . . . in all legal proceedings that judicial

 

tribunals . . . act according to law. On appeal . . . from the
decision of an inferior judicial tribunal an appellate court will

presume in review that it has complied with all the requirements

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of law and that its determination rested on facts sufficient to
sustain them." (Citations omitted.))
IV. CONCLUSION
In light of the foregoing, we vacate the First Circuit
Court’s August 30, 2001 order denying the providers’ motion for
partial summary judgment and granting partial summary judgment in
favor of the insurers, and remand this case to the circuit court

for further proceedings consistent with this opinion.

on the briefs ore
Guy A. sibitla and
Joseph L. Wildman ecciByloLn

(of Sibilla & Wildman),
for plaintiffs-appellants

Richard B. Miller (of
Tom Petrus & Miller),
for defendants-sppellees
Dai-Tokyo Royal State :
Ins. Co., Ltd., et al.

 

Jeffrey H.K. Sia, Steven
L. Goto, and Gary 8.

Miyamoto (of Ayabe, Chong,
Nishimoto, Sia & Nakamura),
for defendants-appellees
Pacific Ins. Co., Aetna

Life & Casualty, and Travelers
Property & Casualty

Nancy Ryan and Patrick
K. Kelly (of The Pacific Law
Group) for defendant -appellee
Teland ins. Co., Ltd.

George W. Playdon, Jr. and
Jefizey K. Hester (of Reinwald,
0’ Connor & Playdon), for
defendant -appellee Crawford

& Company

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