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Dang v. State11/19/1998
APPEAL FROM THE FIRST CIRCUIT COURT (CIV. NO. 96-2149)
Respondent-Appellant/Appellant Government Employees Insurance Company (GEICO) appeals the first circuit court's order and judgment affirming the decision of the Appellee-Appellee Reynaldo Graulty, Insurance Commissioner of the State of Hawaii, granting summary judgment in favor of Claimant-Appellee/Appellee Joseph Dang and ruling that GEICO improperly denied him no-fault benefits.
GEICO argues four points of error on appeal; however, the crux of all four points, and the dispositive issue on appeal, concerns the statutory interpretation of Hawaii Revised Statutes (HRS) § 431:10C-308.6 (repealed 1998). GEICO argues that the plain language of subsection 308.6(c) permits the denial of future treatment plans as a denial of continuing treatment or service at any time.
Dang essentially argues that GEICO's plain language argument fails because the terms "continued services or treatment" and "treatment plan" are not synonymous. Dang argues that the Insurance Commissioner's original decision -- i.e., that prospective denials of benefits are improper per se -- should be upheld.
Finally, the Insurance Commissioner revisits his office's interpretation of section 308.6 and has decided that it would be more cost-efficient to permit prospective denials of treatment under this provision (if the insurer has a specified reason), rather than to require the insurer to challenge and deny each treatment plan. Thus, the Insurance Commissioner asks for reversal.
Effective January 1, 1998, the Hawaii legislature reformed Hawaii's no-fault system and repealed HRS § 431:10C-308.6, the peer review provisions of the former no-fault law. See 1997 Haw. Sess. L. Act 251, § 308.6 at 1262; Sen. Conf. Comm. Rep. No. 171, in 1997 House Journal, at 925. This renders our interpretation of the statute for future cases next to pointless. The parties in this and other pending cases, however, have a viable interest in the interpretation of section 308.6 as it was applied by the Insurance Commissioner.
Because HRS § 431:10C-308.6(c) permitted a challenge at any time to continuing treatment or services, because HRS § 431:10C-308.6(j) mandated that a provider shall not collect payment from either the insurer or insured if a Peer Review Organization (PRO) determines that future treatment is inappropriate or unreasonable, and because we agree with the current arguments of the Insurance Commissioner, GEICO's challenge and denial in this case should have been sustained. We therefore reverse the Insurance Commissioner's final order dated May 15, 1996 and the first circuit court's order and judgment dated September 22, 1997.
I. BACKGROUND
The facts below are largely uncontroverted. Dang was in a motor vehicle accident on August 2, 1993. At the time, Dang was insured by GEICO. Dang sought treatment from a number of physicians for his injuries sustained in the accident. He complained of cervical strain and neck pain.
On December 6, 1993, Dang's chiropractor, B.J. Williams, D.C., submitted a treatment plan requesting an authorization for treatment in excess of the No-Fault Administrative Rules (fee schedule) that went into effect on June 1, 1993. Dr. Williams sought approval for specific manual chiropractic manipulations and physical therapy to be rendered beginning December 31, 1993 and ending approximately May 6, 1994. Because Dang had received treatment from a number of physicians, on December 10, 1993, GEICO challenged the treatment plan's reasonableness and appropriateness, under the "continuing treatment or services" provision of HRS § 431:10C-308.6(c). The challenge was forwarded by the
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