Bill Text: HI SB658 | 2011 | Regular Session | Introduced
Bill Title: Managed Care Plans; External Review Process; Attorneys' Fees
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2011-02-25 - (S) The committee on CPN deferred the measure. [SB658 Detail]
Download: Hawaii-2011-SB658-Introduced.html
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THE SENATE |
S.B. NO. |
658 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to attorneys' fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. In judicial actions that result in a monetary judgment, the prevailing party is entitled to collect attorneys' fees from the losing party. Although external review of a managed care plan's decisions is an administrative process, it is similar to a judicial action in that it is an adversarial evidentiary proceeding that involves a substantial expenditure of time and resources as well as representation by professional counsel for all parties involved. The external review process diverges from a judicial action in the allocation of responsibility for paying attorneys' fees. When an enrollee requests an external review of a managed health care plan's decision, the current statute allows the reviewing authority to require the managed health care plan to pay any attorneys' fees incurred by an enrollee, regardless of whether or not the enrollee is the prevailing party. This has enabled some instances of attorneys bringing non-meritorious cases through the external review process purely as a means of winning money from managed health plans. While many cases subject to external review do indeed have merit, frivolous cases are cumbersome and time consuming, and negatively impact the managed health care plan's ability to carry out its function of efficiently providing health care to all of its enrollees. In the cases of a QUEST managed health care plan including AlohaCare, Evercare, HMSA, Kaiser and ‘Ohana Health Plan, awards of attorneys' fees are absorbed by state taxpayers, regardless of the merits of the underlying claim.
The purpose of this Act is to amend the statute governing the award of attorneys' fees in the case of external review of the decisions of managed health care plans to conform to the law governing awards of attorneys' fees in every other instance in order to reduce the number of frivolous external review cases as well as to ensure equitable treatment for managed health care plans.
SECTION 2. Section 432E-6, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e) [An enrollee may be allowed, at
the commissioner's discretion, an award of a reasonable sum for attorney's fees
and reasonable costs incurred in connection with the external review under this
section, unless the commissioner in an administrative proceeding determines
that the appeal was unreasonable, fraudulent, excessive, or frivolous.] In
all actions for external review of a managed care plan's decisions, there shall
be assessed as attorneys' fees, to be paid by the non-prevailing party and to
be included in the order of the commissioner issued pursuant to subsection (c),
a fee that the commissioner determines to be reasonable; provided that the
attorney representing the prevailing party shall submit to the commissioner an
affidavit stating the amount of time the attorney spent on the action and the amount
of time the attorney is likely to spend to obtain final execution of the order,
or, if the attorney's fee is not based on an hourly rate, the amount of the
agreed upon fee.
The commissioner shall assess reasonable attorneys' fees pursuant to the requirements of this subsection; provided that attorneys' fees shall not exceed the amount of the award for the subject claim and:
(1) Where a note or other contract in writing provides for a fee of twenty-five per cent or more of the amount of the award, or provides for reasonable attorneys' fees, the award of attorneys' fees shall be no more than twenty-five per cent of the award;
(2) Where a note or other contract in writing provides for a fee of less than twenty-five per cent of the amount of the award, not more than the specified rate shall be allowed; and
(3) Any other law to the contrary notwithstanding, no attorneys' fees shall be awarded to the enrollee:
(A) If prior to or at the time the enrollee requested external review pursuant to this section, the enrollee did not sign an instrument in writing that provided for the payment of an attorney's fee; or
(B) If prior to or at the time the enrollee requested external review pursuant to this section, the enrollee did sign an instrument in writing that provided for the payment of attorneys' fees and the instrument in writing contains within its principal amount any attorney's fees from a prior external review.
The fees provided by this section shall be assessed on the amount of the commissioner's order exclusive of costs and all attorneys' fees obtained by the prevailing party, and upon the amount at issue in the underlying claim if the managed care plan is the prevailing party."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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Report Title:
Managed Care Plans; External Review Process; Attorneys' Fees
Description:
Provides for the award of attorneys' fees to the prevailing party in the administrative process for external review of a managed care plan's decision.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
