Part I.  General Provisions

Published: 2015

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  Sections 432E-1 through 432E-2 designated as Part I by L

2011, c 230, §3.


     §432E-1  Definitions.  As used in this

chapter, unless the context otherwise requires:

     "Adverse action" means an adverse

determination or a final adverse determination.

     "Adverse determination" means a

determination by a health carrier or its designated utilization review

organization that an admission, availability of care, continued stay, or other

health care service that is a covered benefit has been reviewed and, based upon

the information provided, does not meet the health carrier's requirements for

medical necessity, appropriateness, health care setting, level of care, or

effectiveness, and the requested service or payment for the service is

therefore denied, reduced, or terminated.

     "Ambulatory review" means a

utilization review of health care services performed or provided in an

outpatient setting.

     "Appeal" means a request from an

enrollee to change a previous decision made by the health carrier.

     "Appointed representative" means a

person who is expressly permitted by the enrollee or who has the power under

Hawaii law to make health care decisions on behalf of the enrollee, including:

     (1)  A person to whom an enrollee has given express

written consent to represent the enrollee in an external review;

     (2)  A person authorized by law to provide substituted

consent for an enrollee;

     (3)  A family member of the enrollee or the enrollee's

treating health care professional, only when the enrollee is unable to provide


     (4)  A court-appointed legal guardian;

     (5)  A person who has a durable power of attorney for

health care; or

     (6)  A person who is designated in a written advance


provided that an appointed representative shall

include an "authorized representative" as used in the federal Patient

Protection and Affordable Care Act.

     "Best evidence" means evidence based


     (1)  Randomized clinical trials;

     (2)  If randomized clinical trials are not available,

cohort studies or case-control studies;

     (3)  If the trials in paragraphs (1) and (2) are not

available, case-series; or

     (4)  If the sources of information in paragraphs (1),

(2), and (3) are not available, expert opinion.

     "Case-control study" means a

prospective evaluation of two groups of patients with different outcomes to

determine which specific interventions the patients received.

     "Case management" means a coordinated

set of activities conducted for individual patient management of serious,

complicated, protracted, or other health conditions.

     "Case-series" means an evaluation of

patients with a particular outcome, without the use of a control group.

     "Certification" means a determination

by a health carrier or its designated utilization review organization that an

admission, availability of care, continued stay, or other health care service

has been reviewed and, based on the information provided, satisfies the health

carrier's requirements for medical necessity, appropriateness, health care

setting, level of care, and effectiveness.

     "Clinical review criteria" means the

written screening procedures, decision abstracts, clinical protocols, and

practice guidelines used by a health carrier to determine the necessity and

appropriateness of health care services.

     "Cohort study" means a prospective

evaluation of two groups of patients with only one group of patients receiving

a specific intervention.

     "Commissioner" means the insurance


     "Complaint" means an expression of

dissatisfaction, either oral or written.

     "Concurrent review" means a

utilization review conducted during a patient's hospital stay or course of


     "Covered benefits" or

"benefits" means those health care services to which an enrollee is

entitled under the terms of a health benefit plan.

     "Discharge planning" means the formal

process for determining, prior to discharge from a facility, the coordination

and management of the care that an enrollee receives following discharge from a


     "Disclose" means to release,

transfer, or otherwise divulge protected health information to any person other

than the individual who is the subject of the protected health information.

     "Emergency services" means services

provided to an enrollee when the enrollee has symptoms of sufficient severity,

including severe pain, such that a layperson could reasonably expect, in the

absence of medical treatment, to result in placing the enrollee's health or

condition in serious jeopardy, serious impairment of bodily functions, serious

dysfunction of any bodily organ or part, or death.

     "Enrollee" means a person who enters

into a contractual relationship under or who is provided with health care

services or benefits through a health benefit plan.

     "Evidence-based standard" means the

conscientious, explicit, and judicious use of the current best evidence based

on the overall systematic review of the research in making decisions about the

care of individual patients.

     "Expert opinion" means a belief or

interpretation by specialists with experience in a specific area about the

scientific evidence pertaining to a particular service, intervention, or


     "External review" means a review of

an adverse determination (including a final adverse determination) conducted by

an independent review organization pursuant to this chapter.

     "Facility" means an institution

providing health care services or a health care setting, including but not

limited to, hospitals and other licensed inpatient centers, ambulatory surgical

or treatment centers, skilled nursing centers, residential treatment centers,

diagnostic, laboratory and imaging centers, and rehabilitation and other

therapeutic health settings.

     "Final adverse determination" means

an adverse determination involving a covered benefit that has been upheld by a

health carrier or its designated utilization review organization at the

completion of the health carrier's internal grievance process procedures, or an

adverse determination with respect to which the internal appeals process is

deemed to have been exhausted under section 432E-33(b).

     "Health benefit plan" means a policy,

contract, certificate or agreement offered or issued by a health carrier to

provide, deliver, arrange for, pay or reimburse any of the costs of health care


     "Health care professional" means an

individual licensed, accredited, or certified to provide or perform specified

health care services in the ordinary course of business or practice of a

profession consistent with state law.

     "Health care provider" or

"provider" means a health care professional.

     "Health care services" means services

for the diagnosis, prevention, treatment, cure, or relief of a health

condition, illness, injury, or disease.

     "Health carrier" means an entity

subject to the insurance laws and rules of this State, or subject to the jurisdiction

of the commissioner, that contracts or offers to contract to provide, deliver,

arrange for, pay for, or reimburse any of the costs of health care services,

including a sickness and accident insurance company, a health maintenance

organization, a mutual benefit society, a nonprofit hospital and health service

corporation, or any other entity providing a plan of health insurance, health

benefits or health care services.

     "Health maintenance organization"

means a health maintenance organization as defined in section 432D-1.

     "Independent review organization"

means an independent entity that conducts independent external reviews of

adverse determinations and final adverse determinations.

     "Internal review" means the review

under section 432E-5 of an enrollee's complaint by a health carrier.

     "Managed care plan" means any plan,

policy, contract, certificate, or agreement, regardless of form, offered or

administered by any person or entity, including but not limited to an insurer

governed by chapter 431, a mutual benefit society governed by chapter 432, a

health maintenance organization governed by chapter 432D, a preferred provider

organization, a point of service organization, a health insurance issuer, a

fiscal intermediary, a payor, a prepaid health care plan, and any other mixed

model, that provides for the financing or delivery of health care services or

benefits to enrollees through:

     (1)  Arrangements with selected providers or provider

networks to furnish health care services or benefits; and

     (2)  Financial incentives for enrollees to use

participating providers and procedures provided by a plan;

provided that for the purposes of this chapter, an

employee benefit plan shall not be deemed a managed care plan with respect to

any provision of this chapter or to any requirement or rule imposed or

permitted by this chapter that is superseded or preempted by federal law.

     "Medical director" means the person

who is authorized under a health carrier and who makes decisions for the health

carrier denying or allowing payment for medical treatments, services, or

supplies based on medical necessity or other appropriate medical or health plan

benefit standards.

     "Medical necessity" means a health

intervention that meets the criteria enumerated in section 432E-1.4.

     "Medical or scientific evidence"

means evidence found in the following sources:

     (1)  Peer-reviewed scientific studies published in or

accepted for publication by medical journals that meet nationally-recognized

requirements for scientific manuscripts and that submit most of their published

articles for review by experts, who are not part of the editorial staff;

     (2)  Peer-reviewed medical literature, including

literature relating to therapies reviewed and approved by a qualified

institutional review board, biomedical compendia, and other medical literature

that meet the criteria of the National Institutes of Health's National Library

of Medicine for indexing in Index Medicus and Elsevier Science Ltd. for

indexing in Excerpta Medicas;

     (3)  Medical journals recognized by the United States

Secretary of Health and Human Services under section 1861(t)(2) of the federal

Social Security Act;

     (4)  The following standard reference compendia:

         (A)  The American Hospital Formulary

Service-Drug Information;

         (B)  Drug Facts and Comparisons;

         (C)  The American Dental Association Accepted

Dental Therapeutics; and

         (D)  The United States Pharmacopeia Drug


     (5)  Findings, studies, or research conducted by or

under the auspices of federal government agencies and nationally-recognized

federal research institutes, including:

         (A)  The federal Agency for Healthcare Research

and Quality;

         (B)  The National Institutes of Health;

         (C)  The National Cancer Institute;

         (D)  The National Academy of Sciences;

         (E)  The Centers for Medicare and Medicaid


         (F)  The federal Food and Drug Administration;


         (G)  Any national board recognized by the

National Institutes of Health for the purpose of evaluating the medical value

of health care services; or

     (6)  Any other medical or scientific evidence that is

comparable to the sources listed in paragraphs (1) through (5).

     "Participating provider" means a

licensed or certified provider of health care services or benefits, including

mental health services and health care supplies, who has entered into an

agreement with a health carrier to provide those services or supplies to


     "Prospective review" means

utilization review conducted prior to an admission or a course of treatment.

     "Protected health information" means

health information as defined in the federal Health Insurance Portability and

Accountability Act and related federal rules.

     "Randomized clinical trial" means a

controlled, prospective study of patients who have been randomized into an

experimental group and a control group at the beginning of the study with only

the experimental group of patients receiving a specific intervention, which

includes study of the groups for variables and anticipated outcomes over time.

     "Retrospective review" means a review

of medical necessity conducted after services that have been provided to a

patient, but does not include the review of a claim that is limited to an

evaluation of reimbursement levels, veracity of documentation, accuracy of

coding, or adjudication for payment.

     "Reviewer" means an independent

reviewer with clinical expertise either employed by or contracted by an

independent review organization to perform external reviews.

     "Second opinion" means an opportunity

or requirement to obtain a clinical evaluation by a provider other than the one

originally making a recommendation for a proposed health care service to assess

the clinical necessity and appropriateness of the initial proposed health care


     "Specifically excluded" means that

the coverage provisions of the health care plan, when read together, clearly

and specifically exclude coverage for a health care service.

     "Utilization review" means a set of

formal techniques designed to monitor the use of, or evaluate the clinical

necessity, appropriateness, efficacy, or efficiency of, health care services,

procedures, or settings.  Techniques may include ambulatory review, prospective

review, second opinion, certification, concurrent review, case management,

discharge planning, or retrospective review.

     "Utilization review organization"

means an entity that conducts utilization review other than a health carrier

performing a review for its own health benefit plans. [L 1998, c 178, pt of §2;

am L 1999, c 273, §2; am L 2000, c 250, §3; am L 2011, c 230, §6; am L 2015, c

63, §26]


Case Notes


  As chapter 432D does not cover the field of managed care

regulation and because this section, §432D-2, and article 431:10A can be

read together and there is no explicit language or policy reason not to give

each statute effect, chapter 432D does not repeal chapter 432E by implication. 

126 H. 326, 271 P.3d 621 (2012).



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