Insurance agents are required to meet specified requirements to maintain their insurance license. In Hawaii, pursuant to the Revised Statutes 431:9A-124: A licensee shall during the twenty-four months preceding a license renewal, complete the required number of credits hoursin approved continuing education.
Agents selling life/accident, health, or sickness insurance products must acquire twenty credit hours relating to that class of insurance, including three credit hours relating to the Hawaii insurance laws and rules. Agents selling property/casualty lines only must acquire twenty credit hours relating to that class of insurance, including three credit hours relating to insurance laws and rules.
Agents who hold a license in dual lines of life/accident, health, and sickness and also property/casualty must acquire 30 hours of which:
Twelve credit hours must relate to the life/accident and health or sickness class of insurance, with two of the twelve being in insurance laws and rules.
Eighteen credit hours relating to the property/casualty class of insurance, with two of the eighteen relating to insurance laws and rules.
Acquired credits are valid for two years. A new licensee who has been licensed for less than two years at the time of the licensees first renewal will be exempt from continuing education requirements for that renewal. The continuing education requirement will go into effect for each subsequent renewal thereafter.
Property/Casualty agents must earn three credit hours in insurance law and rules. If he or she also holds a life/accident, health, and sickness insurance line, then a total of four credit hours would be required, two in the property casualty lines and two in the life/accident, health and sickness lines. It is important that you select law courses that fit your line of insurance license.
Department of Commerce and Consumer Affairs
Chapter 23
Motor Vehicle Insurance Law
16-23-1 Definitions
Unless otherwise noted, as used in this chapter, the following words pertain to the definitions stated here.
Alternative care provider means any person providing medical or rehabilitative services as described in section 16-23-1.1 to a claimant covered by a motor vehicle insurance policy.
Chapter 431 and reference to sections therein, refer to the insurance code contained in the Hawaii Revised Statutes (HRS).
Commissioner means the state commissioner of insurance as defined in section 431:2-102, HRS. Pending the appointment of a person to or during any vacancy in that office, it refers to the state director of commerce and consumer affairs.
County means the counties of Hawaii, Maui, and Kauai and the City and County of Honolulu.
Eligible injured person means:
Motor vehicle insurance law refers to the motor vehicle insurance law, chapter 431:10C, HRC, and sections therein.
Prepaid health care plan means a health care plan approved by the department of labor and industrial relations and meeting the requirements of chapter 393 and the rules of the department in effect on January 1, 1998, or thereafter.
Provider or health care provider means any person providing medical or rehabilitative services as described in section 16-23-5 to a claimant covered by a motor vehicle insurance policy.
Relative means a resident relative as defined in section 431:10C-302(a)(9)(D)(ii), HRS. [Eff 9/1/74;am 9/1/77; am 9/1/78; am 9/1/79; am and ren 16-23-1, 7/7/80; am and comp 9/1/82; am and comp 9/1/85; am 9/1/87; am and comp 9/1/88; comp 9/15/89; comp 9/1/90; am 9/1/91; am and comp 6/1/93; am and comp 1/1/98; am and comp 1/8/99] (Auth: HRS 431:10C-214) (Imp: HRS 431:10C-103, 431:10C-304)
16-23-3 Verification of Insurance
Insurers will issue a forgery resistant insurance identification card to the insured when he or she has paid their premiums or has otherwise earned coverage. Insurers may not issue the identification card for any period exceeding the period for which premiums have been paid or earned. This applies only to the first application of a person for a motor vehicle insurance policy. It does not apply to applications for commercial or fleet vehicles.
The forgery resistant identification card issued by the insurer or the certificate of self-insurance issued by the commissioner must be kept in the insured vehicle at all times. It is to be exhibited to a law enforcement officer upon his or her request.
Any person who violates the two previous paragraphs will be subject to penalty provisions as applicable under Hawaiis laws and regulations.
16-23-4 Motor Vehicle Insurance Policy
In order to be a motor vehicle insurance policy the contract must provide personal injury protection benefits or first-party benefits and liability coverage.
The personal injury protection benefits would conform to sections 431:10C-103.5 and 431:10C-103.6, HRS with respect to any accidental harm, covering medical and rehabilitative expenses, payable to the owner, operator, occupant, or user of the insured motor vehicle. It would also include any pedestrian, such as a bicyclist, or any user or operator of a moped as defined in section 249-1, HRS, but not including any operator or passenger of a motorcycle or motor scooter (section 286-2, HRS) who sustains accidental harm as a result of the operation, maintenance or use of the insured motor vehicle unless expressly provided for in the motor vehicle policy.
Liability coverage, as described in section 431:10C, HRS, would pay sums that the owner or operator of the insured motor vehicle is legally obligated to pay for bodily injury, death, or damage to property of others that come from the ownership, operation, maintenance, or use of the motor vehicle.
A motor vehicle insurance policy may require an eligible injured person submit to medical or related examination by health care providers selected by the insurer. The insurer may require this as often as reasonably necessary to determine eligible benefits.
Notice of a medical or related examination must include a list of three health care providers to choose from with a request that the eligible injured person seek the advice of their treating health care provider when making the choice. An eligible injured person may be required to submit, at the insurers expense, to a medical or related examination in a county other than the county in which the eligible injured person resides.
16-23-5 Personal Injury Protection Benefits
An insurer may provide personal injury protection benefits directly or indirectly by contracting with a provider of a prepaid health care plan. When an insurance company contracts with a prepaid health care provider that has been approved by the department of labor and industrial relations (pursuant to chapter 393, HRS) it is considered to have met the requirement of substantial comparability under section 431:10C-103.6, HRS.
If an insurer chooses not to contract with a provider of a prepaid health care plan, it must ensure that benefits equal or exceed the coverage provided by the prevalent fee for service plan (including preferred provider) identified by the director of labor and industrial relations, pursuant to chapter 393, HRS.
An insurer may make available, at the option of the named insured, coinsurance arrangements in such amounts and on such terms and rates as approved by the commissioner. A policy on which a named insured has failed to elect higher limits for personal injury protection or to elect optional additional coverage will default to the basic minimum required limits of personal injury protection coverage.
16-23-6 Entitlement to
Monthly Earnings Loss Benefits
For accidents arising under policies issued on or before December 31, 1997 for no-fault monthly earnings loss benefits, if the individual loses time from work, benefits may be due. He or she would have performed work duties had he or she not been injured so the individual is entitled to earnings loss benefits even if other compensation is available, such as sick leave, a wage continuation plan, or other income. An unemployed person would not suffer the same earnings loss unless a pending job becomes unavailable due to the injury. He or she would not be entitled to earnings loss benefits until such time that a pending job would have materialized.
16-23-7 Computation of Monthly Earnings
For policies in effect on or before December 31, 1997, the computation of monthly earnings for the purpose of receiving benefits must fairly reflect what the injured party would have actually earned had he or she not been injured. This will be based on employment patterns, including self-employment, the duration of the disability, and the rate of compensation that would have existed had the injury not occurred.
If the injured party is a regularly employed person (including self-employment) monthly earnings means one-twelfth of the persons average annual compensation before state and federal income taxes based on the twelve month period preceding the date of injury or death. This is referred to as pre-accident monthly earnings. If the earning scale is higher at the time of injury or death than the amount for the preceding twelve-month period, the pre-accident monthly earnings will be adjusted accordingly. Benefits might also be upwardly adjusted if the injured party or his or her survivors can show that earnings would have been sufficiently higher than the pre-accident monthly earnings reflect. Benefits would be computed on the basis of the amount of the persons compensation at the time of the accident.
In the case of an unemployed person, a person not regularly employed or self-employed, or a person who has been working for only a short period of time or is in the casual employment sector, monthly earnings means one-twelfth of the persons anticipated annual compensation paid from the time the person would reasonably have been expected to be regularly employed. Benefits would be based on the average annual compensation or earnings of a person of similar training and experience in comparable work.
16-23-8 Computation of Monthly Earnings Loss
When computing the amount of monthly earnings loss under policies in effect on or before December 31, 1997, a month means a calendar month during which the accidental harm resulted in the inability of the eligible injured person to engage in available and appropriate gainful activity. It would also include the diminution of the eligible injured persons earning capacity.
If the time period of earnings loss is less than a calendar month, the loss of payable benefits is then based on the lesser of:
Monthly earnings loss benefits will be reduced by any income from substitute work performed by the eligible injured person or by income the person would have earned in available appropriate substitute work, which he or she was capable of performing but unreasonably failed to undertake. In other words, if the eligible injured party could have earned income from work they were qualified to do, but failed to do, their benefits would be reduced by that amount.
The total amount of monthly earnings loss benefits an eligible injured person is entitled to receive is limited to the amount set out in section 431:10C-103(10)(A)(iii), HRS, prior to January 1, 1998 or the amount of any applicable coverage under section 431:10C-302, HRS, without any deduction of any amount received as compensation for lost earnings under any workers compensation law. The aggregate of the benefits from both sources may not exceed 80 percent of the eligible injured persons monthly earnings. However, if the eligible injured persons employer provided both workers compensation and no-fault payments, the aggregate of the benefits from both sources may not exceed the eligible injured persons net monthly earnings (computed by subtracting the total of federal and state income taxes and employee social security contributions from the gross monthly earnings). The workers compensation payments may not be less than required by chapter 386, HRS.
16-23-9 Liability Coverage
The liability coverage required in a motor vehicle insurance policy included:
When the named insured has failed to elect or request higher limits on the policy or options for bodily injury liability, property damage, stacking, uninsured motorist or underinsured motorist coverages will default to the following:
Alternative care, wage loss, death and funeral benefits will not be added to a policy unless the named insured has elected to buy them.
16-23-10 Determination of Tort Threshold
The medical-rehabilitative limit established for the purpose of prescribing the tort threshold limit pursuant to section 431:10C-306(b)(2), HRS was repealed on January 1, 1998. It does not preclude the person from receiving no-fault medical-rehabilitative benefits in excess of the amount, subject to the no-fault benefits aggregate limit of $20,000 for policies that were effective prior to January 1, 1998.
The medical-rehabilitative limits established for previous years will continue to remain in full force and effect, and will be applicable to claims for tort recovery for accidental harm sustained in those respective years. The medical-rehabilitative limits established do not apply to accidental harm sustained prior to its effective date.
SUBCHAPTER 3
Optional Additional Insurance
16-23-11 Required Optional Additional Coverage
Each insurer must offer their policyholders or applicants for motor vehicle insurance policies the optional coverage as well as the basic motor vehicle insurance coverage, with the applicable premiums applied. Optional coverages will be displayed in Exhibit 1 entitled Required Optional Additional Coverage.
Insurers must fully disclose in writing the availability of all required and optional coverages and deductibles to each policyholder upon the first renewal after January 1, 1998. It must also be disclosed to applicants at the issuance or delivery of their policies. Applicants and policyholders must decline in writing uninsured motorist coverage and underinsured motorist coverage.
Increased limits for residual bodily injury coverage in the amount of $300,000 per person with an aggregate limit of $300,000 per accident and for property damage coverage in the amount of $50,000 per occurrence must be available to all motor vehicles required to be insured for those limits by contract or rule of the State of Hawaii or any political subdivision. Except as provided by section 431:10C-302(a) (9) (D), HRS, the benefits of any optional additional coverages elected by the policyholder are applicable to all eligible insureds.
16-23-11.1 Naturopathic, Acupuncture, and Nonmedical Remedial Care and Treatment
Insurance companies must make optional coverage available for naturopathic, acupuncture, and non-medical remedial care and treatment rendered in accordance with the teachings, faith or belief of any group that relies upon spiritual means through prayer for healing. The coverage must provide for appropriate and reasonable treatment and expenses necessarily incurred as a result of the accidental harm and must provide an aggregate total among and between the types of providers of thirty visits at no more than $75 per visit.
Insurers may make available additional coverages for services provided. These coverages must be for additional blocks of thirty visits not to exceed $75 per visit.
At the option of the insured, an insurer may make available (at appropriately reduced premium rates) deductible, coinsurance or copayment arrangements for the coverage.
16-23-11.2 Managed Care
Insurers may make managed care health care providers or programs an available option for their insureds. These providers or programs would include, but not be limited to, health maintenance organizations, preferred provider organizations, or provider networks. Any such program must meet, be substantially comparable to, or exceed the requirements for prepaid health care plans and the applicable utilization rates of this chapter. This option may include deductibles, coinsurance or copayment arrangements. Any required copayment must be subject to and apply the utilization requirements applicable under prepaid health care plans.
An insurer may provide managed care options by contracting with prepaid health care plans approved by the department of labor and industrial relations as complying with the requirements of Chapter 393, HRS. If compliance exits, the plans meet the requirements of substantial comparability to prepaid health care plans. An insurer that provides managed care options, by means other than contracting with an approved prepaid health care plan, must offer benefits that equal or exceed the coverage provided by the prevalent prepaid health managed care plan, as identified by the Hawaiis department of labor and industrial relations.
16-23-11.3 Wage Loss
Subject to the exceptions allowed, an insurer must make available benefits for monthly earnings loss for injury arising out of a motor vehicle accident, as provided by section 431:10C-302(a)(4), HRS.
16-23-12 Other Optional Coverages
An insurer may offer other optional terms, conditions, exclusions, deductible clauses, coverages, and benefits displayed in Exhibit 2 or upon approval by the commissioner. The commissioner will not approve the same unless they are consistent with the provisions required of a motor vehicle insurance policy, are fair and equitable, and limit the variety of coverage available so as to give insurance buyers reasonable opportunity to compare the cost of coverage among various insurers.
SUBCHAPTER 4
16-23-13 Application for Motor Vehicle Insurance Policy, Rejection of Application, JUP Placement
Insurers (including general agents, subagents, or solicitors) must provide an application and rate quote for a motor vehicle insurance policy within 15 working days of an applicants request for an appointment. Failure to do so (following a request) will be considered a rejection.
Upon rejection of an application for a motor vehicle insurance policy or optional additional insurance the insurer, general agent, subagent, or solicitor must meet with the applicant within 10 working days of the rejection and immediately offer to place the requested insurance coverage with the joint underwriting plan (JUP). The rejection may be by either an affirmative act of the insurer or the failure to comply with the request for an appointment within 15 working days.
16-23-16 Review of Failure to Offer
Joint Underwriting Plan (JUP) Placement, Cancellation, or Refusal to Renew
A person who is not offered a JUP placement after that persons application is rejected, or believes that the persons motor vehicle insurance policy has been canceled or refused renewal without legal justification may file an appeal with the commissioner within ten days after the person has been rejected or received notice of cancellation or refusal to renew. The grievance will be heard and determined in accordance with chapter 91, HRS, and chapter 16-201.
SUBCHAPTER 5
Licensing of Insurers
16-23-19 Licensing of Health Insurers
An insurer may be licensed by the commissioner to provide the personal injury protection benefits described in section 431:10C-103.5, HRS, or to provide optional major medical coverages in excess of personal injury protection benefits coverages, or both, if the commissioner finds the insurer meets the requirements. The commissioner must be satisfied that the insurer has made adequate provisions to assure that any person obtaining personal injury protection benefits will simultaneously be obtaining the other coverages required under a motor vehicle insurance policy and will be provided adequate claims processing and payment services.
An insurer licensed to provide personal injury protection benefits under 16-23-19 must also provide those optional major medical coverages that motor vehicle insurers are required to provide under section 431:10C-302, HRS.
A person licensed to provide personal injury protection benefits or optional major medical coverages must comply with those provisions in chapter 431:10C, HRS, relating to insurers, such as rates and submission of information. An insurer licensed hereunder will be assessed its equitable proration of costs and claims paid under the joint underwriting plan (JUP) and the assigned claims program.
SUBCHAPTER 6
Requirements for Self-Insurance
16-23-20 Application
A person who wants to qualify as a self-insurer must make application to the commissioner using the required form.
16-23-21 Agreement
An applicant wishing to become a certified self-insurer must file a form prescribed by the commissioner. The applicant must agree, in accordance with and to the extent prescribed in the motor vehicle insurance law, to follow specific requirements, including the following:
16-23-22 Surety Bond,
Deposit of Security, or Proof of Financial Ability
An applicant for self-insurance must do one of the following three options:
16-23-23 Amount of Cash, Securities, or Bond
The commissioner will consider the number of vehicles involved, the exposure, the financial condition of the applicant, and other factors appropriate to determining adequacy of security in fixing the amount of the bond or the amount of cash or securities.
16-23-24 Proof of Ability to
Process and Pay Claims Promptly
An applicant must submit proof (satisfactory to the commissioner) that they have retained an adjuster licensed under chapter 431, HRS, to provide a complete claims service to process and promptly pay claims in accordance with articles 10C and 13 of chapter 431, HRS. During such period that the applicant is self-insured, the applicant shall immediately refer all claims to the adjuster for processing. From time to time, the commissioner may require a self-insurer to show that they are continuing to maintain an effective claims service.
16-23-25 Supplemental Bond or
Excess Liability Insurance Requirement
The commissioner may require any self-insurer to provide a bond or additional bond, cash, and securities or additional securities in a reasonable amount whenever he or she finds it necessary or appropriate to do so. The commissioner may also require the self-insurer to provide evidence of excess liability insurance (in excess of the self-insured retention) with a licensed insurer in an amount the commissioner finds appropriate in light of such factors as the exposure, the number of vehicles involved, or the financial condition of the self-insurer.
16-23-26 Service of Process
A self-insurer must appoint an agent, who is a natural person, domiciled in the State of Hawaii to accept service of process and legal documents provided that, in the event of a conflict between this chapter and any other statute or rule of civil procedure, the statute or rule of civil procedure will prevail.
16-23-27 Issuance of Certificate of Self-Insurance
The commissioner will issue a certificate of self-insurance if:
16-23-28 Duty to Notify Commissioner
A self-insurer must notify the commissioner in writing of any change in status of any motor vehicle which is self-insured, such as transfer, sale, removal from the State, or any additional motor vehicle which the self-insurer desires to self-insure within ten working days after the change is affected.
16-23-29 Drivers Education Fund Fee
A self-insurer must comply with the requirements and payments prescribed by subchapter 8.
16-23-30 Duration of Certification
A certificate of self-insurance is valid for a period of one year from the date of issuance and may be renewed annually.
16-23-31 Revocation of Certificate of Self-Insurance
The commissioner may revoke a certificate of self-insurance for good cause at any time after providing notice and opportunity for a hearing in accordance with chapter 91, HRS, and chapter 16-201. Failure to comply with the motor vehicle insurance law, this chapter, or an order or directive of the commissioner or to pay any lawful fee or assessment is cause for revocation. Upon such revocation, the owner of any theretofore self-insured motor vehicle may not operate or permit operation of the vehicle in Hawaii until the owner has obtained insurance or has received a new certificate of self-insurance from the commissioner.
16-23-32 Termination of Self-Insurer Status
and Withdrawal of Security Deposit
Following voluntary termination of a persons self-insurer status, or the revocation of a certificate of self-insurance, application may be made for return of the deposit or cancellation of the surety bond. This would also be true if the individual obtained a motor vehicle insurance policy for any formerly self-insured motor vehicles or demonstrated that no motor vehicle was now owned. Under these conditions the person could request a return of deposit or permission to cancel the bond.
The commissioner would release the deposit or permit cancellation of the bond once a time period of 24 months had elapsed from termination or revocation of self-insurer status. There must be satisfactory proof that all claims had been adjudicated and paid, that all allotments and assessments had been paid and that the owner had complied with the applicable provisions of the motor vehicle insurance law, this chapter, orders and directives of the commissioner, and provisions of the self-insurers agreement. At that point, the commissioner may release the cash or securities deposited or permit cancellation of the bond.
16-23-33 Reporting Requirements
A self-insurer must submit the reports prescribed by subchapter 12 of this chapter.
SUBCHAPTER 8
Driver Education Fund
16-23-56 Payment and Expenditure
There is assessed and levied upon each insurer and self-insurer a drivers education fund underwriters fee of $2 per year, on each motor vehicle insured by each insurer or self-insurer. This fee was due and payable in full on a quarterly basis through June 30, 1998, then on an annual basis from July 1, 1998 by means and at a time determined by the commissioner. Motor vehicles insured under the joint underwriting plan (JUP) are excluded from the drivers education fund assessment. The commissioner deposits the fees into a special drivers education fund account to be used for the operation of the drives education program provided for in section 286-128(m), HRS, and the drivers education program administered by the department of education.
SUBCHAPTER 9
Miscellaneous Provisions
16-23-57 Administrative Hearing on Denial of Claim
If an insurer or self-insurer denies a claim for personal injury protection in whole or in part, it must mail a notice of the denial in triplicate to the claimant. In the case of benefits for services specified in section 431:10C-103.5, HRS, the insurer or self-insurer must also mail a copy of the denial to the health care provider or alternative health care provider.
If the claimant or health care provider desires a review of any action on the claim for benefits, the claimant or health care provider must file two copies of the claim denial notice with the commissioner, request a claim review and submit a statement in duplicate giving specific reasons for the request. This must be done within 60 days following the claim denial date. The commissioner will notify the insurer or self-insurer of the review request, enclosing a copy of the claimants or health care providers statement.
The review hearing will take place in the county in which the claimant or health care provider resides, although with a showing of good cause, the commissioner may hold the hearing elsewhere. The hearing may be held by telephone with the consent of all parties. The commissioner may appoint an impartial referee to hear the matter.
The review will be heard and determined in accordance with the provisions of chapter 91, HRS, and chapter 16-201. The commissioner will assess the cost of the hearing upon either or both parties. This does not preclude determination of any dispute relating to a motor vehicle insurance policy by arbitration and judicial review.
16-23-58 Notice of Claim
Written notice of a claim under a motor vehicle insurance policy or any optional coverage will be given to the insurer within a reasonable time after the date of the accident that the claim is based on or when the claimant first becomes aware of the ailment or disability resulting from the accident.
16-23-59 Criminal Conduct
If a person suffering accidental harm is arrested by or in the custody of a law enforcement agency of government for the alleged commission of an offense punishable by imprisonment for more than one year in connection with the accidental harm or is charged by a duly constituted governmental authority, such as the prosecutor or grand jury, with the commission of such an offense the insurer or self-insurer may withhold payment of personal injury protection benefits accruing from the accidental harm pending final judicial resolution of the criminal charge or reduction of the charge that removes the conduct from the scope of section 431:10C-305(d), HRS.
16-23-60 Motor Vehicle
Insurance Policy Endorsements
Any policy issued or renewed on or after January 1, 1998, will provide the coverage required of a motor vehicle insurance policy in accordance with chapter 431, HRS, and administrative rules as amended from time to time. The endorsement as drafted by the insurer will be subject to approval by the commissioner. The commissioner may require a certification from the insurer that, to the best of the certifiers knowledge and belief, such form meets the requirements of all applicable Hawaii laws and rules.
The endorsement may provide that an eligible injured person will submit to medical or related examination by health care providers selected by, or acceptable to, the insurer when and as often as the insurer may reasonably require. Notice of this requirement will include a list of three health care providers to choose from with a request that the advice of the injured persons treating health care provider be sought when choosing one of the three. An eligible injured person may be required to submit, at the insurers expense, to a medical or related examination in a county other than the county in which the eligible injured person resides.
SUBCHAPTER 12
Statistical and Reporting Requirements
16-23-64 Revision of Current Statistical Plans
Statistical plans currently utilized for the collection and compilation of experience under motor vehicle insurance policies will be revised and refiled to meet the following additional requirements of this section:
16-23-65 Quarterly Report
Within 45 days of the end of each quarter, each insurer must file a quarterly report with the commissioner covering the matters described in this section. Groups of the companies must also file quarterly reports on a combined basis.
A census of vehicles insured as of the end of each calendar quarter must be provided indicating the following characteristics:
Experience under Hawaii motor vehicle insurance policies will be provided by accident quarter, developed through the end of the quarter of the report:
- Car years: written (except commercial)
earned
- Gross premiums: written
earned
- Number of claims incurred
pending as of report date
- Losses & allocated loss adjustment expense:
- Paid on closed claims
- Paid on open claims
- Reserve for outstanding reported losses
- Reserve for incurred but not reported losses
(Number of claims, in the case of personal injury protection, alternative providers, wage loss, death, funeral, uninsured motorist, and underinsured motorist benefits means the number of injured persons receiving benefits. Paid losses should be net of any salvage or subrogation received. Reserve for outstanding reported losses is the amount unpaid as of the report date.)
Data relating to number of policies canceled or refused renewals due to the following:
Data relating to claims for personal injury protection benefits must be provided as follows:
This section of the report will contain an analysis of the reasons for the resistance to or denial of the claims in numbers 2, 3, and 5.
Reports must be filed on diskettes in a format prescribed by the commissioner.
16-23-66 Annual Report
By April 1 of each year, each insurer must file an annual report covering the business of the preceding year. The report must contain a summary of Hawaii motor vehicle insurance experience in a format prescribed by the commissioner. The experience must be reported for six major classes of motor vehicle insurance. Those classes include:
This report must contain a detailed explanation of the methods used to assign expenses and investment income to Hawaii motor vehicle classifications, and those used to develop reserves for losses and loss adjustment expenses. Groups of companies must also file an annual report on a combined basis.
SUBCHAPTER 13
The Joint Underwriting Plan (JUP)
16-23-67 General Description
The joint underwriting plan is intended to provide motor vehicle insurance and optional additional insurance in a convenient and expeditious manner for those persons, uses, or motor vehicles in certain high risk categories. JUP deals with individuals, uses or motor vehicles for which insurance cannot reasonably be obtained in the market at rates not in excess of JUP rates, or for persons who otherwise are in good faith entitled to, but unable to obtain, motor vehicle insurance and optional additional insurance though ordinary methods. Insurers will pool their losses and bona fide expenses under JUP to prevent the imposition of any inordinate burden on any particular insurer.
Another part of the JUP consists of the assignment thereto of claims of victims for whom no policy is applicable, such as hit-and-run victims who are not covered by a motor vehicle insurance policy. The losses and expenses under the assigned claims program are pro-rated among and shared by all motor vehicle insurers and self-insurers.
16-23-68 Membership in the Joint Underwriting Plan
Each insurer must be a member of the JUP (joint underwriting plan). As a condition of licensure each insurer must:
This section does not apply to those insurers writing motor vehicle insurance exclusively under section 431:10C-106, HRS.
The commissioner must notify the insurer of its membership in the JUP at least 30 days before the extension date of the insurers membership. If the fee is not paid on or before the extension date, the fee will be increased by a penalty in the amount of fifty per cent (50%) of the fee. If the fee and the penalty are not paid within 30 days after the extension date, the commissioner may revoke the insurers certificate of authority and reissue the certificate of authority when the penalty and the fee have been paid.
16-23-70 Allocation of JUP Costs
All costs incurred in the operation of the joint underwriting plan bureau and the operation of the plan, such as administrative, staff, and claims paid (other than assigned claims) must be allocated fairly and equitably among the JUP members.
The allocations must be computed on a share of the voluntary market basis. Allocation of private passenger non-fleet experience will be on the basis of net direct written car years. Allocation of commercial and all other experience will be on the basis of net direct written premiums.
Member insurers or the statistical agencies designated by them will report all the data necessary to comply with the allocation procedures to the commissioner or agent designated by the commissioner. Each insurer will permit its statistical agent to release such data.
16-23-71 Selection of Servicing Carriers
The commissioner will select certain insurers as servicing carriers, who will provide joint underwriting plan coverage and perform direct insurance operations on behalf of JUP members. In making the selection, the commissioner will consider:
16-23-72 Classifications Eligible for JUP
In addition to the classifications established in section 431:10C-407, HRS, the JUP must provide motor vehicle insurance policies for the following classes of persons, motor vehicles, and uses:
Motor vehicles owned by licensed drivers are defined as:
1. An applicant or any person who resides in the same household as the applicant and customarily operates the automobile or any person who regularly and frequently operates motor vehicle to be insured who:
a. Within the prior 36 months was convicted of operating a motor vehicle without motor vehicle insurance;
b. Within the 18 months prior to the date of the application has been convicted of or forfeited bail for two or more moving traffic violations, or
c. Has been convicted of any felony involving a motor vehicle.
2. An applicant or any operator of an automobile in the same household who customarily operates the automobile or any other operator who customarily operates the automobile has been involved during the 36 month period prior to the date of the application in:
a. Two or more accidents involving bodily injury or death if there is one car in the household or an average of more than one such accident for all cars in the household, provided that a loss payment has been made or a loss reserve has been established for such accidents.
b. Two or more accidents involving damage to any property, including their own, of $1,000 or more if there is one care in the household, or an average of more than one such accident for all cars in the household, provided that loss payments or reserves under the comprehensive physical damage coverage is not counted; or
c. A combination of two or more such accidents of the type specified in the two previous paragraphs.
Accidents will not be counted unless it can be clearly demonstrated that the applicant or other operator was at fault. Accidents occurring under the following circumstances would tend to demonstrate that the applicant or operator was not at fault:
All other motor vehicles (those not in the first classification or under section 431:10C-407, HRS) include those owned by licensed drivers who are unable to obtain motor vehicle insurance policies and optional additional insurance through ordinary methods.
The JUP will also provide required optional additional insurance for the above classes, with the exception of licensed drivers receiving public assistance benefits and unlicensed permanently disabled individuals who own their motor vehicles and receive public assistance benefits.
16-23-73 Public Assistance Benefits Recipients
The state department of human services (DHS) will provide a certificate of eligibility for JUP coverage to eligible licensed drivers and unlicensed permanently disabled individuals unable to operate their motor vehicle, who are receiving public assistance benefits from the department or from the Supplemental Security Income (SSI) program under the Social Security Administration and who desire basic motor vehicle insurance policy coverage under the joint underwriting plan (JUP); provided such licensed drivers and unlicensed permanently disabled individuals unable to operate their motor vehicle are the sole registered owners of the motor vehicles to be insured under the JUP. The applicant must submit the certificate in person or by mail to the servicing carrier of the applicants choice for a motor vehicle insurance policy.
Certificates received by the servicing carrier within 30 days from the date of certification of eligibility by the state department of human services will be accepted and treated as if it were payment in full for the requested motor vehicle insurance coverages. The certificate must be certified by the servicing carrier, which will function as a motor vehicle insurance policy and issue the applicant a motor vehicle insurance identification card. The serving carrier must develop the information necessary to validate the eligibility of the applicant. Only basic motor vehicle insurance policy coverages will be bound, and the effective date of coverage will be the same date as the signature date on the certificate by the applicant. However, the effective date may not precede the time and date:
1. Of the certification of eligibility by the state department of human services,
2. The date that the servicing carrier receives the certificate, or
3. The second day after postmark, whichever is later.
In the event that the applicant fails to date the certificate, the date that the servicing carrier receives the certificate or the second day after postmark, whichever is earlier, will be considered the date the applicant signed the certificate. The servicing carrier must promptly notify the director of human services of public assistance listing all recipients they have insured.
An applicant must first exhaust all paid coverage under any motor vehicle insurance policy then in force before becoming eligible for JUP coverage. Upon termination of public assistance benefits, the DHS will:
16-23-74 Application for JUP, Placement;
Reporting Disposition
A person may apply for coverage under the JUP to any motor vehicle insurance general agent, subagent, or solicitor, who must inform the applicant whether or not he or she is eligible for JUP coverage.
Any eligible certified public assistance insured (CPAI) must apply for motor vehicle insurance coverage directly to the servicing carrier of the insureds choice. If the applicant qualifies for and desires JUP coverage, an agent who represents servicing carriers in the voluntary market will use the serving carriers in placing JUP applications, giving preference to the applicants choice. An agent who does not represent any servicing carrier in the voluntary market may place the JUP insurance with an appropriate servicing carrier, giving preference to the applicants choice. Each general agent licensed to write motor vehicle insurance must automatically be licensed and authorized to bind eligible applicants on behalf of the JUP and must communicate the fact of such binding directly to the affected servicing carrier.
Each general agent must, within two working days after the date of disposition, inform the commissioner in writing of each application received for JUP coverage, showing whether the application was denied or approved. If the application was denied the reason for denial must be included. If the application is approved, they must list who the servicing carrier is. The commissioner may inquire into the propriety of any disposition and when indicated by the circumstances may, after affording the applicant, insurer, and other affected persons an opportunity to be heard, take such action as may be appropriate.
16-23-75 Denial of Application; Appeal
If an insurer denies an applicant JUP coverage under section 16-23-72 or section 431:10C-407, HRS, by the next working day the insurer must mail or deliver to the applicant in triplicate a notice of:
The denial,
The applicants right to appeal, and
The appeal procedure.
If the applicant wants a review of their application denial, he or she may file two copies of the denial notice with the commissioner, along with a request for review, and a statement in duplicate giving the applicants reasons for the request. This must be done within seven calendar days following the date of application denial.
The commissioner must notify the insurer of the request for review, enclosing a copy of the statement in a timely manner. The appeal will be heard and determined in accordance with the provisions of chapter 91, HRS, and chapter 16-201.
16-23-76 Administration by JUP Bureau
If the commissioner determines that the method of assignment of JUP applicants described herein is not operating in an effective and fair manner, the commissioner may have the JUP bureau directly receive, assign, and supervise the servicing of all applications for JUP coverage.
16-23-77 Servicing Carriers Duties
A servicing carrier has specific duties. They must:
16-23-78 Allowances to Servicing Carriers
Servicing carriers will be reimbursed for their servicing expenses on the basis of Non-certified public assistance insured (non-CPAI) and certified public assistance insured (CPAI).
Under Non-CPAI (those not receiving public assistance for their insurance needs):
Under CPAI:
16-23-79 Commissions
A servicing carrier must pay a general agent a commission for business written pursuant to the JUP at the following rate:
All risks transferred from one servicing carrier to another under the JUP or reinstated policies are to be considered renewal business.
16-23-80 JUP Rates
The commissioner must establish rating rules, refinement of classifications, rates, rating plans, territories, and policy forms for use under the JUP after consultation with the JUP board of governors and in accordance with the requirements and standards prescribed.
16-23-81 JUP Private Passenger Manual
The private passenger manual of the Hawaii joint underwriting plan (HJUP), dated November 1, 1997, and any amendments approved by the commissioner, published by the Automobile Insurance Plans Service Office (Rhode Island), is adopted as the private passenger automobile manual of the HJUP. Copies of the HJUP private passenger automobile manual are available at the Automobile Insurance Plans Service Office (Rhode Island), and are available for inspection at the insurance division, department of commerce and consumer affairs.
16-23-82 JUP Commercial Manual
The commercial automobile manual of the Hawaii joint underwriting plan (HJUP), dated November 1, 1997, and any amendments approved by the commissioner, published by the Automobile Insurance Plans Service Office (Rhode Island) is adopted as the commercial automobile manual of the HJUP. Copies of the JHUP commercial automobile manual are available at the Automobile Insurance Plans Service Office (Rhode Island), and are available for inspection at the insurance division, department of commerce and consumer affairs.
16-23-84 JUP Assigned Claims;
Application; and Assignment of Claims
The claimant must apply to the JUP bureau, which will promptly assign the claim to an appropriate servicing carrier and notify the claimant thereof. The assignment must be made so as to minimize inconvenience to the claimant. The claimant and the assignee carrier have rights and obligations as set forth in part II of chapter 431:10C, HRS.
16-23-85 Proration of Costs
and Assigned Claims Paid
The commissioner will annually assess all insurers and self-insurers and prorate among them all costs and claims paid under the assigned claims program. Proration will be based upon a pro rata distribution for each premium dollar actually or theoretically received. A self-insurer will be assessed that prorated amount based upon the total premium cost for the coverage and vehicles stated in its certificate of self-insurance, as if the self-insurer had sold such coverage at JUP premium rates.
16-23-86 JUP Membership Termination
A member may terminate membership in the JUP upon termination of its licensure to transact motor vehicle insurance business in Hawaii. With respect to all polices in effect on the effective date of a members termination, the liability of the terminating member will cease on the anniversary date of each policy during the succeeding year. Termination of membership will not discharge or otherwise affect liabilities incurred prior to the expiration of these policies and the member will continue to pay assessments until its proportionate share established by its writings prior to discontinuance of business has been determined. However, if the motor vehicle liability, personal injury protection, or physical damage business of an insurer discontinuing the writing of motor vehicle liability personal injury protection, or physical damage insurance in Hawaii has been purchased by, transferred to, or reinsured by another insurer, the latter must pay the assessments of the former until the proportionate share of the former as established by its writings prior to such transfer has been paid.
In the event that an insurer is merged with another insurer or there is a consolidation of insurers, the continuing insurer must pay the assessments of the insurer that merged or consolidated. Groups of insurers under the same ownership and management must be treated as a single insurer under these provisions. Groups of insurers under either the same ownership or management, but not both, may elect to be treated separately.
16-23-87 Joint Liability for JUP Business
In the event of the failure of any member, through insolvency or otherwise, to promptly pay its portion of any loss or expense, after the JUP has made written demand upon it to pay the loss or expense, the commissioner will take appropriate action. If the loss or expense remains unpaid beyond a reasonable period, all of the other motor vehicle insurance insurers, upon notification by the commissioner will promptly pay their respective pro rata shares, based upon the predetermined participation ratios. Members that have made contributions will have the right to recovery thereafter against the member in default, provided that the commissioner may enter into an agreement with the member in default, or with its legal representative, upon an amount, which shall constitute a full settlement of all of the obligations of the members to the remaining members.
16-23-88 Auditing of Members
The commissioner may audit the records of any member relating to the JUP and may prescribe policies, and the keeping of records, books of account, documents, and related material that the commissioner deems necessary to carry out JUP functions. This material must be provided by the members in the form and with the frequency required by the commissioner.
SUBCHAPTER 15
Motor Vehicle Insurance
Administration Revolving Fund
16-23-90 Peer Review Costs
Whenever an insurer or self-insurer for a motor vehicle accident occurring on or between January 1, 1993 and December 31, 1997, files a challenge for submission to a peer review organization in accordance with section 431:10C-115.5, HRS, the insurer or self-insurer will pay $200 to the commissioner at the time the challenge is filed. In addition, the insurer or self-insurer will reimburse the commissioner for expenses relating to review by the peer review organization within thirty days of presentation of an itemized statement.
16-23-91 Allocation of Cost of Motor Vehicle Insurance Administration
The commissioners office will assess each insurer authorized to transact motor vehicle insurance in Hawaii an amount computed on the basis of the motor vehicle insurance premiums written during the previous calendar year. Each self-insurer will be assessed based upon the total premium cost for the coverage and vehicles stated in its certificate of self-insurance as if the self-insurer has sold the coverage at the premium rates applicable under the Hawaii Joint Underwriting Plan (JUP). Each April first, the commissioner will determine the amounts that are due based on the amount needed for that year to administer the commissioners obligations under article 10C of chapter 431, HRS. The amounts assessed on each insurer and self-insurer, which will be received through written notice, are due on September 1 of each year. The cost of administering article 10C of chapter 431, HRS, may be paid out of the motor vehicle insurance administration revolving fund.
SUBCHAPTER 17
Fee Schedule and Utilization Guidelines
16-23-93 Fee Schedules
This chapter applies to treatment occurring after May 31, 1993. Charges and treatment rendered for emergency services during the initial 72 hours following the motor vehicle accident resulting in injury will not be subject to this subchapter as long as charges for emergency treatment does not exceed the health care or alternative care providers usual and customary fee. It must also be appropriate, reasonable and necessarily incurred. Charges for treatment of a primarily palliative nature (to relieve the symptoms or effects of a condition) are subject to the requirements as any other treatment would be.
16-23-94 Definitions
As used in this chapter:
Anesthetist means a registered nurse-anesthetist who performs anesthesia services under the supervision of a licensed physician, preferably an anesthesiologist.
Claimant means a person entitled to the benefits described in section 431:10C-103.5, HRS, under a motor vehicle insurance policy.
Emergency treatment or emergency services means treatment or services which must be performed immediately or within ten working days because the condition is life threatening or could cause serious harm.
Medical fee schedule refers to the Medicare Resource Based Relative Value Scale System applicable to Hawaii and Exhibit A at the end of Title 12, Chapter 15, entitled Workers Compensation Supplemental Medical Fee Schedule.
Physician includes a doctor of medicine, a dentist, a chiropractor, an osteopath, a psychologist, an optometrist, and a podiatrist.
Specialist means a physician or surgeon who holds a certificate as a diplomat issued by a specialty board approved by the American Medical Association or the American Dental Association.
16-23-95 Treatment Plan
This section will apply if the injury resulted from an accident occurring on or between January 1, 1993 and December 31, 1997.
When a health care provider of services submits a treatment plan, both the front page of the document submitted and the envelope in which the document is mailed must be clearly identified as a motor vehicle insurance treatment plan in capital letters. The type must be at least ten-point (this type is 11 point Verdana). The commissioner may prescribe forms to be used for the treatment plan.
Each treatment plan must be written in English and must include at least the following:
1. A current diagnosis of the claimants condition;
2. A description of the treatment to be performed;
3. A time schedule for measurable objectives or documented clinical improvement objectives;
4. Beginning and termination dates for the treatment and the estimated number of treatments during the treatment period.
5. Prognosis or goals at the end of treatment including (where appropriate) range of motion, functional capacity, and specific goals.
6. The estimated cost of treatment, provided that the charges for treatment will not exceed the charges permissible under exhibit A to the workers compensation schedules or, if the treatment is not covered by exhibit A, 80 percent of the providers usual and customary charge.
A treatment plan that does not meet the requirements is considered invalid and may be rejected by the insurer, provided that the rejection is made within five working days from the postmark of the treatment plan.
The provider must be compensated for preparing the initial treatment plan in accordance with the fees permitted under exhibit A to the workers compensation schedules. The provider may not be compensated for subsequent treatment plans except in cases where the claimants diagnosis, condition, or prognosis has changed significantly.
Anytime a treatment plan is submitted, the insurer must respond within five working days after the postmark of the treatment plan, giving authorization or stating in writing the reason for refusal to the health care provider and the claimant. Any such refusal must be filed concurrently with the commissioner for submission to a peer review organization (PRO). Failure by the insurer to respond within five working days after the postmark will constitute approval of the treatment plan.
Nothing in this chapter precludes health care or alternative care providers and insurers from informal agreements to accept or negotiate requests for minor variance without using a formal treatment plan as set forth in this section.
16-23-96 Health Care Provider Responsibilities
The total treatment allowable without prior approval or peer review will not be performed if the claimant recovers from the injury covered by motor vehicle insurance benefits before exceeding the maximum allowed treatment, whether or not prior approval has been obtained.
The frequency of treatment specified in this chapter and in the medical fee schedule is a guideline to improve health care provider accountability and is not intended to be an authoritative prescription for health care.
16-23-97 Surgery
When elective surgery is contemplated for an injury resulting from an accident occurring on or between January 1, 1993 and December 31. 1997, the health care provider who is to perform the surgery will submit a written request for surgery to the insurer no later than seven calendar days before the date of the proposed surgery. The health care provider will concurrently provide a copy of the request to the claimant. The written request must include procedure code, medical documentation justifying the need for surgery, the estimated date of surgery, and the hospital where the surgery is to be performed. When the surgical procedure has a BR fee (by report), the estimated fee must be submitted with the request. The health care providers request must also specify the cost and need for a co-surgeon or assistant and other additional surgical procedures, if any.
Any time a request for elective surgery is received for an injury resulting from an accident occurring on or between January 1, 1993 and December 1, 1997, the insurer must respond within seven calendar days from the postmark of the request, giving authorization or stating in writing the reason for refusal to the health care provider and the claimant. When a refusal is made, it must also be filed concurrently with the commissioner for submission to a peer review organization. Failure by the insurer to respond within seven calendar days will constitute approval of the request.
Surgery that must be performed immediately or within fourteen calendar days because the condition is life threatening or could cause serious harm is not considered elective surgery. When a surgical fee is charged, no office or hospital visit charge is allowed for the same day as the surgical fee, unless the surgery is performed on the same day as the health care providers first examination.
The fees listed for all surgical procedures include the surgery and the follow-up care for the period indicated in days in the column headed Follow-up Days in the medical fee schedule. Necessary follow-up care beyond this listed period must be added on a fee-for-service basis. Where the follow-up period is listed as zero, the listed fee is for the surgical procedure only, and all post-operative care is to be added on a fee-for-service basis.
When additional surgical procedures are carried out within the listed period of follow-up care for a previous surgery, the follow-up periods must concurrently continue to their normal terminations. Some of the listed procedures in the medical fee schedule are typically carried out as an integral part of the total service. As such, they do not warrant a separate charge. When these types of procedures are carried out as a separate procedure rather than as an integral part of a total service, a fee may be applicable.
When significant time or complexity to patient care results from multiple or bilateral surgical procedures performed at the same operative session, the total fee will be the fee for the major procedure plus 50% of the fee of the lesser procedure, unless otherwise specified by law. When an incidental procedure, such as an incidental appendectomy, is performed through the same incision, the fee will be that of the major procedure only.
When surgical assistance is needed during a major surgery, the separate fee for the assistance may not exceed 15% of the fee listed in the medical fee schedule for the surgery. If the major surgery is performed in a hospital where interns or residents are available as surgical assistants no additional assistance fee may be charged. A major surgery is defined as any surgical procedure usually or customarily done in an operating room of a hospital. No fee for assistance at a surgical procedure other than a major surgery is allowed.
One attending health care provider must be in charge of the care of the claimant. However, if the nature of the injury requires the concurrent services of two or more specialists for treatment, then each health care provider will be entitled to the listed fee for services rendered.
Lacerations ordinarily require no aftercare except removal of sutures. The removal is considered a routine part of an office or hospital visit.
For those fees not covered by Medicare, bills for services for a claimant who has had major surgery or treatment for major fractures and are later treated by another health care provider for follow-up care, fees will be limited to the fee schedule during the entire follow-up period as follows:
The operating surgeon must submit a fee, reducing it accordingly if aftercare is not rendered.
The health care provider providing follow-up care must submit the fee for the aftercare; and
It is the responsibility of the operating surgeon to advise the insurer of the apportionment of the respective fee.
16-23-99 Concurrent Treatment
Concurrent treatment by more than one health care or alternative care provider is allowed if the attending health care provider determines the claimants injury involves more than one body system, and requires multidiscipline care, or is so severe or complex that services of more than one health care or alternative care provider is required.
If the injury is the result of an accident occurring on or between January 1, 1993 and December 31, 1997, before a claimant receives concurrent care, a treatment plan must be submitted to the insurer for prior authorization, provided that no request is required for emergency treatment as defined in section 16-23-94. The treatment plan must include the name, business address, discipline, and specialty of the assisting health care or alternative care provider. The reasons for concurrent treatment must be submitted to the insurer at least five working days prior to the referral. Each attending health care provider must also provide a copy of the treatment plan to the claimant. Notwithstanding this section, the attending health care provider must be compensated for the initial evaluation necessary to prepare a treatment plan for concurrent care so long as the initial evaluation is appropriate and reasonable.
Once the concurrent treatment plan is submitted, the insurer must respond within five working days after its postmark. Either authorization must be given or, if refused, the reason for refusal. This must be sent to each attending health care provider and the claimant. Any refusal must be filed concurrently with the commissioner. The insurers failure to file within five working days after postmark will be considered an approval.
16-23-100 Change in Health Care
or Alternative Care Providers
The application of the frequency of treatment guidelines set forth in this subchapter will not be affected when the claimant changes the health care or alternative car provider. If a claimant receives treatments in excess of those specified in the guidelines, regardless of whether the treatments are performed by one health care or alternative care provider or more than one, the excess treatments may be subject to prior authorization or to peer review if the injury resulted from an accident occurring on or between January 1, 1993 and December 31, 1997.
16-23-101 Consultations
If the injury is the result of an accident occurring on or between January 1, 1993 and December 31, 1997, fees for consultation will be allowed if appropriate and necessary for treatment or rehabilitation of the injury covered by motor vehicle insurance benefits.
If the injury is the result of an accident occurring on or between January 1, 1993 and December 31, 1997, the first consultation for a claimant is not subject to prior authorization or to peer review. For subsequent consultations, the attending health care provider must submit a written request for consultation to the insurer before arranging the consultation. If the consultation constitutes emergency treatment, however, no request is required. The name, business address, discipline, and specialty of the consulting health care or alternative care provider and the reasons for the consultation must be submitted in writing to the insurer at least five working days prior to the referral.
If the injury is the result of an accident occurring on or between January 1, 1993 and December 31, 1997, when a request for consultation is submitted, the insurer must respond within five working days after postmark of the request, giving authorization or stating in writing the reason for refusal. This must be sent to the attending health care provider and the claimant. Any such refusal must be filed concurrently with the commissioner for submission to a peer review organization (PRO). The insurers failure to respond within five working days will constitute approval of the request. If the condition of the claimant is life threatening or could cause serious harm, the attending health care provider must notify the insurer as soon as possible. The consultation report must be given to the attending health care provider, the claimant, and the insurer within fourteen calendar days following the examination.
When the consulting health care provider assumes the continuing care of the claimant, this subsequent service will no longer be considered a consultation. If the injury or condition of the claimant necessitates the concurrent services and skill of two or more health care or alternative care providers, concurrent treatment may be provided in accordance with section 16-23-99.
For groups of health care providers or hospitals with satellite clinics, when a member of the group renders service and the claimant is referred to another health care provider in the group for consultation, fees for the consultation may be allowed.
16-23-102 Licensed Physical Therapists
and Registered Occupational Therapists
This section again refers to injuries obtained between January 1, 1993 and December 31, 1997. Frequency of treatment provided by a licensed physical therapist or a registered occupational therapist will not be more than the nature of the injury and the process of recovery requires. Treatment requiring a maximum of 20 therapy sessions during the first 60 calendar days of treatment and 12 therapy sessions during each successive thirty calendar days thereafter does not require prior authorization and is not subject to peer review.
Treatment exceeding 120 calendar days may be subject to prior authorization and peer review.
A licensed physician, physical therapist, or registered occupational therapist must be in attendance while a patient is undergoing therapy treatment procedures such as:
Therapeutic exercises;
Neuromuscular re-education;
Functional activities;
Gait training;
Manual electrical stimulation;
Iontophoresis;
Manual traction;
Contrast baths;
Ultrasound;
Braces;
Thermal therapy;
Ultraviolet therapy;
Pool therapy;
Hubbard tank;
Orthontics training (dynamic bracing, splinting, etc.);
Prosthetic training;
ADL and diversional activities;
Mobilization and manipulation;
Posture training;
Therapeutic massage; and
Therapeutic activities.
16-23-103 Rules of Decision for Allowable Fees for Medical, Surgical, and Hospital Services and Supplies
When all the required care for a case reasonably falls within the range of qualifications of one health care provider, no other provider may claim a fee, except for consultation service or for surgical assistance. For groups of health care providers or hospitals with satellite clinics, when a group member of the same specialty renders service, the group must submit bills as though one health care provider had cared for the claimant.
Medical, surgical, or hospital care of an unusual type or unlisted fee may occur which represents a type of service over and beyond listed procedures. Appropriate fees may be allowed if the treatment was reasonable, appropriate, and necessary.
Medical conditions or symptoms that are pre-existing and are not aggravated or affected by and do not result from the injury covered by motor vehicle insurance benefits may not be compensable. Palliative treatment of these unrelated conditions would be allowed, provided that these conditions directly retard, prevent, or endanger the surgical care or recovery from the injury covered by motor vehicle insurance benefits. In addition, pre-existing conditions that did not require treatment before the motor vehicle accident resulting in accidental harm, but that do not require treatment as a result of the accident must be compensable. Pre-existing conditions that required treatment at the time of the accident and which are aggravated or affected so as to require additional treatment will be compensable to the extent of the additional treatment.
Some of the procedures listed in the medical fee schedules are commonly carried out as an integral part of a total service and do not warrant a separate charge. When such a procedure is carried out as a separate procedure, not immediately related to other services, the indicated fee is applicable. Minimal dressings, counseling incidental to treatment, and so forth, are covered by the office visit fee. Necessary drugs, supplies and materials provided by the health care provider may be charged for separately in accordance with section 16-23-114.
The same health care provider may charge for some services only once per day. This would include office visits. Regardless of the number of injuries or conditions treated only one charge per day may be levied.
16-23-104 Health Care Providers
Frequency and extent of treatment may not be more than the nature of the injury or more than the process of recovery requires. Authorization is not required for the initial fifteen treatments of the injury during the first 60 calendar days, except for chiropractic and acupuncture treatments that are governed by section 431:10C-103.6, HRS, and subsection (d). A visit will include all examinations or chiropractic manipulative treatments involving one or more regions, spinal, and authorized physiotherapy modalities and procedures or acupuncture treatments provided on the same date.
If the injury is the result of an accident occurring on or after January 1, 1998, treatments may include up to four procedures, up to four modalities, or a combination of up to four procedures or modalities for physical medicine and rehabilitation. The visit may not exceed 60 minutes per injury. When treating more than one injury treatments may include up to six procedures, up to six modalities, or a combination of up to six procedures and modalities. The entire visit cannot exceed ninety minutes.
If the injury is the result of an accident occurring on or after January 1, 1998, an insurer or its agents may not reduce payments to health care providers under this section through the withholding of money for the payments of taxes. This does not exempt an insurer or its agents from complying with the Internal Revenue Code.
16-23-105 Doctors of Chiropractic and Naturopathy
This section applies to injuries from accidents occurring on or between January 1, 1993 and December 31, 1997.
Frequency and extent of treatment by doctors of chiropractic or naturopathy cannot be more than the nature of the injury or the process of recovery that is required. A maximum of 20 treatments during the first 60 calendar days following the first treatment are not subject to prior authorization or to peer review. Up to six treatments during the first thirty calendar days thereafter are also not subject to prior authorization or peer review.
Chiropractic or naturopathic care extending beyond 120 calendar days may be subject to prior authorization or peer review. Taking of x-rays will be discretionary for 60 days at or following the initial chiropractic or naturopathic treatment and is not subject to prior authorization or peer review during that period.
When the chiropractic adjustment is an ongoing part of a therapeutic regimen, the evaluative process is not part of this regimen and one evaluation may be permitted each 30 calendar days for 60 calendar days following initial treatment. Additional evaluations may be permitted if new or aggravated symptoms present an indication of need for an additional intermediate or comprehensive evaluation and examination, but these additional evaluations may be subject to prior authorization or peer review.
16-23-106 Physician Assistants
Attending health care providers may prescribe treatment in their discipline to be carried out by persons certified or licensed to provide the service. Fees for services provided by certified or licensed physician assistants under Hawaii law must be 60% of the fees authorized by section 16-23-15. Fees for services provided by assistants not certified or licensed must be 50% of the fees authorized.
16-23-113 Hospital Services
Subject to the terms of the motor vehicle insurance policy, when hospitalization is required for further treatment of a claimant, that claimant must have a free choice of the licensed hospital in the county where the injury occurred or in the county where the claimant resides. If he or she is in critical condition or unable to express a choice, the attending health care provider may designate the facility to which the claimant is taken.
Hospital charges must be limited to ward rates or the lowest prevailing rate at the hospital where the claimant is confined, except if the nature of the injury requires private care, intensive care, or isolation, as determined by the attending health care provider, in which case the prevailing private rates may be charged.
When a claimant is treated in the emergency facility of a hospital, the allowable hospital charge for use of the emergency room will be the established emergency room charge for that particular hospital. All hospital charges must be itemized when their bill is submitted.
16-23-114 Drugs, Supplies and Materials
All charges for prescribed drugs, supplies, or materials for the use of the claimant must be separately listed and certified by the health care provider, or a duly authorized representative of the charges for the injury covered by motor vehicle insurance benefits. Dietary supplements, such as minerals and vitamins are not reimbursable unless a specific compensable dietary deficiency has been clinically established in the claimant as a result of the injury covered by the motor vehicle insurance benefits.
Payment for covered prescription drugs and supplies must be made at the average wholesale price plus 40% of the average wholesale price when sold by a health care provider, hospital, pharmacy, or alternative health care provider. Billings for prescriptive drugs must include the national drug code number listed in the current American Druggist Red Book followed by the average wholesale price listed at the time of purchase. Approved generics must be substituted for brand name pharmaceuticals unless the prescribing health care provider certifies no substitution is permitted due to the claimants condition, which will not tolerate a generic preparation.
16-23-115 Workers Compensation
Medical Fee Schedule
Charges for medical services may not exceed 110% of participating fees prescribed in the Medicare Resource Based Relative Value Scale System applicable t Hawaii (Medicare Fee Schedule) or Exhibit A at the end of Title 12, Chapter 15, entitled Workers Compensation Supplemental Medical Fee Schedule (Exhibit A). The Medicare Fee Schedule and Exhibit A, together herein referred to as the medical fee schedule, is made a part of this chapter and will be used to determine the maximum allowable fees using the procedure codes and unit values established by the department of labor and industrial relations pursuant to section 386-21, HRS. Any subsequent amendment by the department of labor and industrial relations to the Medicare fee schedule and Exhibit A will be incorporated into this chapter by reference.
If the maximum allowable fees for medical services are listed in both the Medicare Fee Schedule and Exhibit A, charges will not exceed the maximum allowable fees allowed under Exhibit A. For the purposes of this section private patient means a patient not covered by insurance. If the charges are not listed in the medical fee schedule or in Exhibit A, the health care provider must charge a fee not to exceed 80% of the health care or alternative care providers usual and customary fee for the same service rendered to a private patient. Upon request by the insurer a health care or alternative care provider must submit a statement itemizing the lowest fee charged for the same health care, services, and supplies furnished to any private patient during a one-year period preceding the date of the particular charge. Requests must be submitted in writing within 20 calendar days of the receipt of the charge allegedly in excess of the allowable amount. The health care or alternative care provider must reply in writing within ten calendar days of the receipt of the request. Failure to comply with the insurers request will be reason for the insurer to deny payment.
Fees listed in the Medicare Fee Schedule will be subject to the current Medicare Fee Schedule correct coding initiative (CCI) and follow-up rules. The Health Care Financial Administration Common Procedure Coding System alphabet codes adopted by Medicare are not allowed unless specifically adopted by the director of labor.
SUBCHAPTER 18
Peer Review
16-23-117 Time Requirements for Peer Review
A peer review organization will complete its review of treatment in excess of the applicable utilization schedules and will report to the commissioner within 30 days after the commissioner has submitted the care to them.
16-23-117.5 Applicability of Peer Review
This applies to treatment for injuries resulting from accidents occurring on or between January 1, 1993 and December 31, 1997.
16-23-118 Submission to Peer Review Organization
When an insurer files a challenge with the commissioner for submission to a peer review organization, the insurer must provide written notice to the claimant and the health care provider. The commissioner may prescribe a form for the notification.
The challenge must be accompanied by the filing fee specified and must include the reason for the challenge, any medical or other information necessary to make a determination of whether the challenged treatment is appropriate and reasonable. Any other medical or applicable information should also be submitted. The challenge must include the treatment plan and any relevant information. The commissioner may prescribe forms to be used for a submission of a challenge to treatment to a peer review organization.
The peer review organization may request additional information, if necessary, from the insurer, the claimant, or the health care provider. The requested information must be provided to the peer review organization within five working days of mailing the request. No other information will be provided to the peer review organization unless they specifically request it.
While the challenge is pending, the claimant is entitled to continued health care services requested up until the date of the peer review organizations decision. If the PRO finds that the treatment is inappropriate or unreasonable, the health care provider must refund any amounts to the insurer that they have paid for the disapproved treatment. Only challenges based on whether treatment is appropriate or reasonable may be filed with the commissioner for submission to a peer review organization. Denial or partial denial of claims based on other grounds, such as coverage questions, is not subject to peer review.
In the event an insurer denies a claim on a basis other than the appropriateness and reasonableness of treatment, the health care provider may collect reasonable values for the services given from the claimant. If the claim is later deemed compensable and the claimant has already paid for them, the insurer must reimburse the claimant for the actual sums paid to the health care provider. The peer review organization can specify a course of treatment that it considers appropriate and reasonable.
16-23-119 Reconsideration
If the peer review organization finds that treatment is appropriate and reasonable, the insurer must either request reconsideration by the peer review organization that made the original decision or pay the claim. If the PRO finds that treatment is inappropriate or unreasonable, the insurer may then deny the claim. In that event, the claimant or the health care provider may request reconsideration by the PRO that made the original determination, request an administrative hearing, or seek arbitration or court review of the denial.
Any party seeing reconsideration of a peer review organizations decision must pay the commissioner a filing fee of $100, along with the cost of the reconsideration. The request for reconsideration must state the basis for reconsideration. Within ten days the PRO will complete its reconsideration and submit a report to the commissioner.
16-23-120 Dispute Regarding Charges
In the event of a dispute between the health care provider and the insurer over the amount of a charge or the correct fee and procedure code to be used, the insurer will pay all charges not in dispute. They will negotiate in good faith with the health care provider on the disputed charges. Such disputes are not filed with the commissioner for submission to peer review.
If the health care provider and the insurer cannot resolve the dispute, either party may make a request to the commissioner for a hearing. The request must include documentation of the efforts of the insurer and the health care provider to reach a negotiated resolution of the dispute.
This concludes the PC Hawaii Law Course.
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