Clarifies the procedures for adjusting automobile personal injury protection coverage benefits in cases where the provider's charge for medical services does not conform to the workers' compensation supplemental fee schedule or there is a dispute over the correct fee or procedure code to be used under the schedule. (SB3072 HD2)

A BILL FOR AN ACT

SECTION 1. The legislature notes that section 431:10C-308.5, Hawaii Revised Statutes, of the motor vehicle insurance law, limits charges for and the frequency of medical treatment covered by personal injury protection benefits to charges and frequency permissible under the workers' compensation supplemental medical fee schedule. The motor vehicle insurer has an obligation to limit payments for treatment accordingly.

Whenever, according to these limits, the payment to the provider must be less than the amount billed, insurers issue a statement of denial of benefits not only to the provider but also to the insured. This procedure is required under the Hawaii supreme court's ruling in Orthopedic Associates of Hawaii, Inc. v. Hawaiian Insurance & Guaranty Co., Ltd., No. 24634, slip. op. (Dec. 7, 2005). As a result, some of the larger insurers are issuing several thousand denials each month. In addition to the increased costs to insurers, this procedure has prompted many calls from insureds who do not understand the process and are concerned that the insurer might be denying them access to medical treatment.

This Act is intended to clarify the procedure to be followed when an insurer receives a demand for payment and does not dispute the treatment rendered but finds the billing exceeds the charges permitted by law. This Act is not intended to affect the amount billed or the amount owed under personal injury protection.

Specifically, this Act makes clear that any adjustment to payment of the amount billed is an acceptance of the treatment and not a denial of benefit. Therefore, section 431:10C-304(3)(B), Hawaii Revised Statutes, which requires a written denial of benefit, is not applicable to an adjustment of the amount billed under personal injury protection benefits and the insurer need not issue a denial.

SECTION 2. Section 431:10C-308.5, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) In the event of a dispute between the provider and the insurer over the amount of a charge or the correct fee or procedure code to be used under the workers' compensation supplemental medical fee schedule, the insurer shall:

If the provider and the insurer are unable to resolve the dispute[,] within sixty days pursuant to paragraph (2), the provider, insurer, or claimant may submit the dispute to the commissioner, arbitration, or court of competent jurisdiction. The parties shall include documentation of the efforts of the insurer and the provider to reach a negotiated resolution of the dispute.

Disputes between the provider and the insurer over the amount of a charge or the correct fee or procedure code to be used under the workers' compensation supplemental medical fee schedule shall not be subject to the requirements of section 431:10C-304(3)(B), and the insurer shall not be deemed to have denied a claim for benefits under that section; provided that the insurer shall pay what the insurer believes is the amount owed and shall furnish a written explanation of any adjustments to the provider and to the claimant at no charge, if requested."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2020.