Ruling allows HMSA suits
The health insurer is accused of unfair practices and policies
A recent state Supreme Court decision clears the way for the Hawaii Medical Association to renew lawsuits against the Hawaii Medical Service Association for alleged illegal policies and practices.
HMA physicians called the decision "an important victory in the battle against the wrongful payment practices of health insurance companies," the association said in a news release.
HMSA will ask the Supreme Court to reconsider its decision, said Laura Lott, HMSA manager of community and public relations.
The Sept. 8 ruling reverses a lower-court decision in 2003 and allows HMA and member physicians to pursue legal action against HMSA in situations where they claim the health insurer systematically or improperly denied or delayed payments.
"HMSA's physician agreements stipulate arbitration in such matters," Lott said this week. "The agreements are voluntarily signed by physicians who wish to be participating providers."
In the past, physicians and HMSA would have such matters determined by arbitration, she said. "We continue to believe that arbitration is the best and fairest option for everyone involved. It is a timely and affordable mechanism for resolving such disputes."
HMA and Drs. Maxwell Cooper, a plastic surgeon, and Michon Morita, a neurosurgeon, filed lawsuits in 2003 alleging HMSA had breached its physician contracts and engaged in unlawful business practices under the Hawaii statute regarding unfair and deceptive trade practices.
HMSA practices cited in the lawsuits included arbitrarily overruling a physician's "medical necessity" determination without proper review, failing to make timely payments to physicians, failing to provide an adequate explanation for denying a claim, and arbitrarily reducing a physician's payment by downcoding, among others.
The Supreme Court said HMA has standing to sue on behalf of members, and its physician members can take claims to court, instead of going to arbitration.
The decision "reactivates the lawsuit," said Paula Arcena, HMA executive director. "We're back on course."
HMA and the doctors still must prove their case, she said. "We still need to do our job and show how HMSA has treated physicians unfairly."
"What we're seeking is for HMSA to reform its practices," Arcena added.
HMSA, established in 1938, is Hawaii's largest health insurer, covering about 700,000 residents statewide.
The Hawaii Medical Association received its charter in 1856 from King Kamehameha IV and represents more than 1,600 physician members. It is the state affiliate of the American Medical Association and the umbrella organization for Hawaii's five county medical societies.