Opinion ID: 871688
Heading Depth: 3
Heading Rank: 1

Heading: The HMO Act and HRS article 431:10A authorize HMOs and accident and health insurers to provide closed panel products

Text: This court must determine whether both HRS chapter 432D and HRS article 431:10A authorize the provision of health care services as required by the QExA contracts. [36] Initially, we note that the RFP appears to contemplate that both HMOs and accident and health insurers could provide the closed panel product required by the QExA RFP. [37] Nevertheless, the question for decision here is whether, under Hawaii's insurance code, accident and health insurers are authorized to provide that product. There is no dispute that the HMO Act authorizes HMOs to provide or arrange for the services required under the QExA contracts. The plain language of HRS § 432D-1 indicates that HMOs are authorized to provide or arrange for the delivery of basic health care services to enrollees on a prepaid basis, except for enrollee responsibility for copayments, deductibles or both. [B]asic health care services are defined in HRS § 432D-1 as preventive care, emergency care, inpatient and outpatient hospital and physician care, diagnostic laboratory services, and diagnostic and therapeutic radiological services. Applying those definitions to the instant case, it is clear that properly licensed HMOs, like AlohaCare, are authorized pursuant to HRS § 432D-1 to provide or arrange[,] at their option, for the closed panel health care services required under the QExA program. Although the QExA RFP did not define healthcare services[,] the foregoing definitions appear to coincide with HMOs' authorization to provide or arrange for preventive care, emergency care, inpatient and outpatient hospital and physician care, diagnostic laboratory services, and diagnostic and therapeutic radiological services. See HRS § 432D-1. Therefore, HRS § 432D authorizes HMOs to provide or arrange for the closed panel services required under the QExA RFP. The plain language of HRS § 431:10A-205(b), on the other hand, is not as clear as HRS chapter 432D regarding whether the statute authorizes accident and health insurers to offer the closed panel product required by the QExA contracts, because the statute prohibits a risk-bearing entity licensed as an accident and health insurer from requiring that medical services be rendered by a particular hospital or person. The plain language of HRS § 431:10A-205(b) is written in the singular, indicating that insurers may not require that services be rendered by a single hospital or person. Accordingly, it appears that HRS § 431:10A-205(b) would allow accident and health insurers like United and Ohana to provide the QExA closed panel product because the RFP required that enhanced quality healthcare services be obtained from a network of providers and not a single hospital or person. See HRS § 431:10A-205(b). Nevertheless, the use of singular language is not determinative. Nobriga v. Raybestos-Manhattan, Inc., 67 Haw. 157, 163, 683 P.2d 389, 394 (1984) (The use of words in a statute signifying the singular is ... not conclusive.). HRS § 1-17 sets forth the general rule of statutory construction that [w]ords ... in the singular or plural number signify both the singular and plural number[.] HRS § 1-17 (1993). This provision suggests that HRS § 431:10A-205(b) would not simply prohibit an accident and health insurer from requiring that services be rendered by a particular hospital or person, but also by particular hospitals or persons. If HRS § 431:10A-205(b) prohibits accident and health insurers from providing services by particular hospitals or persons[,] United and Ohana would not be able to provide the closed panel product required under the QExA contracts with their accident and health insurance licenses because the RFP required that services be rendered by a designated provider network[.] This court has interpreted statutes using the statutory presumption in HRS § 1-17 only after reviewing the legislative history and context in which a statute was passed to determine whether the legislature intended to signify both the singular and plural forms of a word. See Nobriga, 67 Haw. at 163, 683 P.2d at 394 (looking to the legislative objective of HRS § 663-14 to determine that the legislature did not intend for there to be a different result based on whether the singular or plural form of the phrase one joint tortfeasor and the word release was used in the Uniform Contribution Among Joint Tortfeasors Act); see Wong v. Hawaiian Scenic Tours, Ltd., 64 Haw. 401, 403-05, 642 P.2d 930, 932-33 (1982) (per curiam) (reviewing the relevant legislative history and applying HRS § 1-17 to the term person to mean persons in a comparative negligence statute). Therefore, this court must look to legislative history to determine whether the legislature intended for HRS § 431:10A-205(b) to prohibit an accident and health insurer from requiring that services be rendered both by a particular hospital or person, and also by particular hospitals or persons. The legislative history of HRS § 431:10A-205(b) is silent on whether accident and health insurers are prohibited from requiring that services be rendered by particular hospitals or persons. See, e.g., S. Stand. Comm. Rep. No. 713, in 1955 Senate Journal, at 668. The legislative history also is silent regarding whether the statute precludes accident and health insurers from offering a closed panel product, such as required by the QExA program. See Id. Nevertheless, because of the historical context in which HRS § 431:10A-205(b) developed, it appears that the legislature did not intend to prohibit accident and health insurers from requiring that services be rendered by particular hospitals or persons when it adopted HRS § 431:10A-205(b). Although HRS § 431:10A-205(b) was enacted in 1987, the statute has remained virtually unchanged since 1955, when it was originally codified as Revised Laws of Hawai`i (RLH) § 181-55(b). [38] The text of HRS § 431:10A-205(b) also substantially conforms to a model law proposed by the National Association of Insurance Commissioners. See Digest of Bills Passed, 14th Legislature, Regular Session of 1987, p. 374-75. Closed panel plans, however, became popular only more recently and were unlikely to have been discussed in 1955, when the language of HRS § 431:10A-205(b) was first drafted. See, e.g., Nw. Med. Labs., Inc. v. Blue Cross and Blue Shield of Oregon, Inc., 310 Or. 72, 794 P.2d 428, 432, n. 2 (1990) (citation omitted) (stating that in 1973, Congress enacted the federal HMO Act, 42 USC § 300(e), which specifically authorized closed panel HMOs). Other jurisdictions have interpreted the phrase particular hospital or person in similar statutes to mean a single hospital or person and not hospitals or persons[.] In Insurance Commissioners v. Mutual Medical Insurance, Inc., 251 Ind. 296, 241 N.E.2d 56, 60-61 (1968), superceded by statute on other grounds as held in Huffman v. Office of Envtl. Adjudication, 811 N.E.2d 806, 811-12 (Ind.2004), the Indiana Supreme Court looked to the intent of the Indiana legislature when it required, as a basic provision of individual and group accident and sickness policies, that `the policy may not require that the service be rendered by a particular hospital or person[.]' In that case, the Appellant-Commissioner contend[ed] that this language reflects the legislative intent that no policy defeat an insured's right of recovery for medical services covered in the policy when the services are rendered by a person duly qualified in Indiana to perform them. Id. The case arose after insurers, under the applicable insurance laws of Indiana, allegedly did not compensate podiatrists for the performance of podiatry services because the podiatrists did not hold unlimited licenses to practice medicine in Indiana. Id. at 57-58. The Indiana Supreme Court held: It is our opinion that the language relied on by the appellants before the Commissioner is statutory language of differentiation, by which policy designs that would permit the insurer to direct the destiny of the cure through the specific designation of the person or facilities, are prohibited. The phrase `may not require that the service be rendered by a particular hospital or person' distinguishes accident and sickness policy standards from the standards of the Workmens' Compensation Laws, which expressly permit and authorize an employer to select for the treatment of his employee, specific physicians, hospitals, nurses, or spiritual healers. Burns' Indiana Statutes, Anno., (1965 Repl.), s[sic] 40-1225. Therefore, Burns' ss [sic] 39-4253 and 39-4260 (supra) serve to prohibit this selective and discretionary designation of personnel for the treatment of the ill, rather than to affirmatively require insurers to indemnify for all attempted cures which are legally rendered. Id. at 61 (emphasis added). The same statutory language also was at issue in Herring v. American Bankers Insurance Co., 216 So.2d 137 (La.App.1969). In Herring, the Court of Appeal of Louisiana considered whether an insurance policy provision that benefits would be paid for confinement only in hospitals recognized by any of three medical associations violated a Louisiana statute providing that such insurance policies may not require that services be rendered by a particular hospital or person. Id. at 138-39. The Court of Appeal held: We do not construe the provision requiring treatment by a hospital recognized by at least one of the associations named in the policy as naming a particular hospital. The statute is not intended to prevent a provision in a policy requiring an institution to meet certain standards before it may be classed as a hospital within the meaning of the policy. We believe that the intent of the statute in prohibiting the naming of a particular hospital has reference to the specification in the policy that an insured must go to a certain hospital designated in the contract by its trade name. We do not believe that the statute intended to prohibit a contract containing a provision prescribing a quality or status which an institution must possess before it will be included under the definition of an acceptable hospital within the terms of the policy. The statute, we feel, was intended to prevent any practice of favoritism between an insurance company and some particular hospital or institution. This is not the situation in the case under consideration. Id. at 140 (emphasis added). Similar to the provision at issue in Herring, the QExA RFP did not require that QExA members go to a particular hospital or person to receive health care. Instead, the QExA RFP required that members receive services in the QExA network, and if medically necessary covered services were not available in the network or on the island of residence, that the member be provided services out-of-network or transported to another island to access the services. The analyses in Mutual Medical Insurance and Herring support the conclusion that HRS § 431:10A-205(b) only applies to a single particular hospital or person, and that the statute should be read without resorting to HRS § 1-17. Moreover, prohibiting accident and health insurers from requiring that services be rendered by particular hospitals or persons would be inconsistent with the ability of those insurers to offer managed care plan[s,] as recognized under HRS § 432E-1. [39] HRS § 432E-1 was enacted in 199843 years after the particular hospital or person provision in HRS § 431:10A-205(b) was first codifiedand recognized that authorized insurers may provide for the financing or delivery of health care services or benefits to enrollees through ... [a]rrangements with selected providers or provider networks to furnish health care services or benefits. Prohibiting accident and health insurers from requiring that services be rendered by particular hospitals or persons would conflict with the recognition of authority in HRS § 432E-1, thereby repealing a portion of the later-enacted statute. See G. ex rel. K. v. State Dep't of Human Servs., 676 F.Supp.2d 1046, 1081 (D.Haw.2009). [40] Such a result would violate two rules of statutory construction. First, [t]he general rule is that repeals by implication are not favored and that if effect can reasonably be given to two statutes, it is proper to presume that the earlier statute is to remain in force and that the later statute did not repeal it. State v. Pacariem, 67 Haw. 46, 47, 677 P.2d 463, 465 (1984) (quoting State v. Gustafson, 54 Haw. 519, 521, 511 P.2d 161, 162 (1973) (per curiam)); see also Richardson v. City & Cnty. of Honolulu, 76 Hawai`i 46, 55, 868 P.2d 1193, 1202 (1994) (quoting Mahiai v. Suwa, 69 Haw. 349, 356-57, 742 P.2d 359, 366 (1987))(stating that where there is a `plainly irreconcilable' conflict between a general and a specific statute concerning the same subject matter, the specific will be favored. However, where the statutes simply overlap in their application, effect will be given to both if possible, as repeal by implication is disfavored[ ]). Second, [l]aws in pari materia, or upon the same subject matter, shall be construed with reference to each other. What is clear in one statute may be called upon in aid to explain what is doubtful in another. HRS § 1-16 (1993). Here, it is possible to give effect to HRS § 431:10A-205(b) and HRS § 432E-1 by reading the former statute in the singular, thereby avoiding repeal by implication. Accordingly, both HMOs and accident and health insurers are authorized to arrange for medical services for members using a defined network of providers, i.e., particular hospitals or persons. HRS § 432D-1; HRS § 431:1-201(a). We note, however, that only an HMO is authorized to arrange for services to be rendered by a single hospital or person. In addition, an HMO, unlike an accident and health insurer, may provide for the delivery of basic health care services in facilities it owns or operates utilizing the services of physicians employed by the HMO. See HRS § 432D-1. Based on the foregoing, HRS article 431:10A and chapter 432D authorize accident and health insurers and HMOs, as riskbearing entities, to provide the closed panel product required by the QExA contracts.