Hawaii Supreme Court takes on appeal of HMSA case

A Hilo doctor's lawsuit against Hawaii's largest health insurer will go before the state Supreme Court.

Hilo obstetrician- gynecologist Frederick Nitta filed a lawsuit in 2022 against the Hawaii Medical Services Association over several incidents in which the insurer failed to cover certain medications and treatments he considered to be medically necessary for patients.

The suit alleged that in the cases of 30 different patients, HMSA rejected Nitta's diagnoses or treatments, forcing those patients to go without treatment or pay for it out of pocket. In some cases HMSA changed the proposed treatment to something unhelpful or detrimental to the patient's health, according to the claim.

Kailua-Kona Judge Robert Kim ruled in February that three HMSA contracts Nitta highlighted in his suit are "unconscionable" and "unenforceable."

One of those contracts was a Quest Participating Physician Agreement created in 1999 for Charlene Orcino, a patient of Nitta's. According to the suit, Nitta in 2021 prescribed the then- pregnant Orcino the drug Nifedipine, which is usually prescribed for high blood pressure or chest pain but can also treat preterm labor. But when Orcino attempted to fill her prescription, she was told HMSA would not cover the medication.

By the time Orcino was able to raise money for the medication, her condition worsened to the point where she had to be medivaced to Oahu, where she gave birth "dangerously prematurely," according to the lawsuit — she was 25 weeks pregnant at the time. The infant, Jayson Orcino, weighed less than 3 pounds at birth and required regular medical care as a result.

Another contract involved the case of the late Adrian "Scott" Norton, a patient of another physician whose case was merged with Nitta's and Orcino's. After Norton's physician recommended in 2023 that he receive magnetic resonance imaging, HMSA refused to cover the scan and paid only for physical therapy.

HMSA eventually did authorize an MRI, only for Norton to discover he had prostate cancer that had spread to his back, spine, hip and ribs. Norton died in 2023.

Kim's judgement of HMSA's contracts found that they are "contracts of adhesion," meaning they were drafted wholly by the more powerful party and that the other party is unable to negotiate. While these aren't necessarily illegal, they can become so if the court deems them to be unreasonable, as in this case.

"Who makes the decisions regarding your medical care?" Ted Hong, a Hilo attorney who represents the plaintiffs, told the Hawaii-Tribune-Herald on Wednesday. "Should it be your primary care physician, or should it be some clerk in the depths of an insurer's office somewhere?"

Because HMSA appealed Nitta's case in February, Hong said he expected it to drag on for years while at the Intermediate Court of Appeals. But instead, the Hawaii Supreme Court on Wednesday transferred the appeal to itself, something Hong said is a rare occurrence.

"I was very surprised, pleasantly surprised," Hong said. "This case could change the nature of health care delivery in the state. And I think the Supreme Court recognized how consequential this is."

Hong said that if the Supreme Court rules in favor of the plaintiffs, "doctors will be in control of their patients' health care again." He said that such a verdict would require insurers to change their reimbursement structures, which could improve the quality of care statewide.

Hong added that HMSA's low reimbursements are a large part of why it is so difficult to retain physicians in Hawaii, particularly in rural areas on Hawaii island.

Currently, no court date has been set for oral arguments before the high court, although Hong said they could take place by the end of the year.