Opinion ID: 871144
Heading Depth: 3
Heading Rank: 1

Heading: Circumstances Leading to Act 198

Text: 15 The circumstances the ICA considered when concluding that Liberty Mutual had waived any objection included that Liberty Mutual (1) addressed its denial of Dacanay’s health providers’ claims directly to Dacanay and specifically alerted her to the option of seeking an administrative review, if she wished to challenge the denials; (2) did not object to Dacanay’s status as a real party in interest when she sought review by the Commissioner; (3) settled the claims with Dacanay’s providers; (4) stipulated with Dacanay that the dispute relating to the denials had been resolved; (5) stipulated to the dismissal of Dacanay’s claims before the Commissioner for the denied PIP benefits; and (6) only questioned Dacanay’s status as a real party in interest after she sought an award of attorney’s fees and costs and it was too late for her to substitute her health care providers as the real parties to her case. See 108 Hawai#i at 400, 120 P.3d at 1135. 16 Because we overrule Wilson, we do not address a question raised by the insureds in these cases but not addressed by the ICA: whether the real party interest holding, which is based on DCRCP Rule 17(a), is applicable to administrative proceedings. One of the purposes of administrative remedies is to enable parties to resolve disputes in a less cumbersome and expensive manner than normally encountered in a trial in court. 2 Am. Jur. 2d Administrative Law § 4. Based on Hawai#i Administrative Rules (HAR) § 16-201- 1, however, which provides that “[w]henever this chapter is silent on a matter, the authority or hearings officer may refer to the Hawaii Rules of Civil Procedure for guidance,” Insurance Commissioner Schmidt’s Final Orders applied Wilson’s real party in interest holding to these insureds. Although we do not decide the issue, we note that “[i]t is axiomatic that an administrative rule cannot contradict or conflict with the statute it attempts to implement[,] Kaleikini v. Thielen, 124 Hawai#i 1, 33, 237 P.3d 1067, 1099 (2010) (Acoba, J., concurring) (citation omitted), and HRS § 431:10C-212 expressly gives insureds the right seek to administrative review. -10-  FOR PUBLICATION IN W EST’S HAW AII REPORTS AND PACIFIC REPORTER  Act 198 was triggered by our holding in Orthopedic Assocs. of Haw., Inc. v. Haw. Ins. & Guar. Co., Ltd., 109 Hawai#i 185, 124 P.3d 930 (2005). This case involved the “down-coding” of bills submitted by providers to PIP insurers: 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) insureds 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. . . . 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, based 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. 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. 109 Hawai#i at 191, 124 P.3d at 936 (footnote omitted). We held: In light of the unambiguous mandatory language of HRS § 431:10C-304(3)(B), an insurer is required to provide written notice of its denial--in whole or in part--of the claim for benefits. Written notice to the claimant is required where the denial or partial denial relates to the treatment service and/or the charges therefor. Where the denial or partial denial involves treatment services, the insurer must also provide written notice to the provider. 109 Hawai#i at 196, 124 P.3d at 941. Before Orthopedic Associates, HRS § 431:10C-304(3)(B), which requires that an insurer mail denial notices in triplicate to the claimant, and mail another copy to the provider, was followed by insurers only for complete denials of a provider’s PIP billing. This holding, however, required that such notices be mailed any -11-  FOR PUBLICATION IN W EST’S HAW AII REPORTS AND PACIFIC REPORTER  time an insurer partially denied a provider’s PIP billing.