No. 28899 (May 21, 2009)
Opinion pdf
OPINION OF THE COURT BY FOLEY, J.
Respondent-Appellant-Appellant Hawaii Medical Service Association (HMSA) appeals from the Judgment filed on November 13, 2007 in the Circuit Court of the First Circuit (circuit court). The circuit court affirmed the "Findings of Fact, Conclusions of Law, Discussion and Order" (Discussion and Order) filed on April 18, 2007 with the State of Hawai'i Department of Commerce and Consumer Affairs (DCCA) Insurance Division by the DCCA Insurance Commissioner (the Commissioner), pursuant to Hawaii Revised Statutes (HRS) § 432E-6 (2005 Repl.), and signed by the Commissioner. In the Discussion and Order, a three-member external review panel (the Panel), appointed by the Commissioner, reversed HMSA's February 23, 2007 final determination, in which HMSA denied coverage of an allogeneic stem-cell transplant (allo-transplant) for Petitioner-Appellee-Appellee Brent Adams (Adams) to treat his multiple myeloma.
On appeal, HMSA contends the circuit court erred by (1) applying the "palpably erroneous" standard of review to the entirety of the Discussion and Order; (2) affirming the Panel's interpretation of HRS § 432E-1.4 (2005 Repl.) as requiring HMSA to have specifically identified allo-transplant "for treatment of multiple myeloma" in Chapter 6, "Services Not Covered," of its Preferred Provider Plan for the Hawai'i Employer-Union Health Benefits Trust Fund (the Plan) in order to specifically exclude coverage for such service; (3) concluding that the Panel could consider a study that had been unavailable to HMSA during HMSA's internal review in determining that HMSA had acted unreasonably in denying coverage for an allo-transplant under HRS § 432E-6(a)(7); and (4) affirming the Discussion and Order's conclusion that HMSA breached its implied covenant of good faith and fair dealing when it denied coverage for a lifesaving treatment on the basis that there was no scientific study proving the treatment was beneficial and refused to reconsider such denial when presented with a scientific study, published after the denial.
We vacate the Judgment and remand to the circuit court with instructions to reverse the Discussion and Order and enter judgment on behalf of HMSA.
