Court considerations in the Nitta case
In the hot seat, the Hawaii Supreme Court is debating whether contracts between the state's titan health insurer, HMSA, and its healthcare providers and patients are enforceable. During Tuesday's hearing, HMSA's Honolulu-based attorney, Randall Whattoff, argued against a decision made by the now-retired Third Circuit Chief Judge Robert Kim last year.
Kim branded HMSA's contracts as "contracts of adhesion" in three medical cases highlighted in a civil suit by Hilo obstetrician-gynecologist Frederick Nitta. These contracts, predominantly drafted by the more powerful party, are not necessarily illegal, but they can become so if the court deems them unreasonable – a judgment that Kim made.
Whattoff asserted in his argument that Kim committed an error by considering issues outside the scope of a motion to compel arbitration between HMSA and Nitta. He maintained that HMSA's standardized contracts aren't tailored to impose unfavorable terms on healthcare providers and are used to ensure consistency in agreements to minimize administrative costs.
Hilo attorney Ted Hong, representing Nitta, countered that unconscionability is central and pervades these contracts. The contracts in question are HMSA's Participating Physician Agreement, Provider Agreement for Medicare Plans, and Quest Participating Physician Agreement, which have been ruled unconscionable by Kim.
In the case involving Adrian Scott Norton, who was initially denied a magnetic resonance imaging procedure, later diagnosed with prostate cancer, and passed away in 2023, Hong argued against the insurer's clerk making decisions that could potentially impact public health.
Associate Justice Todd Eddins questioned whether these standardized agreements warrant a heightened review due to their impact on public health. While associate justice Sabrina McKenna and Whattoff disagreed on the validity of a clause preventing punitive damages in the previous cases, the court is taking the arguments under advisement and will issue its verdict at a later date.
Email John Burnett at [email protected] for more information on this case.
[1] Contracts of adhesion are agreements drafted by a more powerful party, with the other party having little or no ability to negotiate. The term itself doesn't denote legality or enforceability, but contracts can be ruled unenforceable if deemed unfair or unreasonable.
[2] Dr. Frederick Nitta, Hilo obstetrician-gynecologist, filed a lawsuit challenging HMSA's contracts after the Third Circuit Court ruled that the contracts were unenforceable due to their unfair terms.
- The debate in the Hawaii Supreme Court centers around the enforceability of HMSA's contracts, which are considered 'contracts of adhesion', predominantly drafted by a more powerful party, and their impact on health and wellness, particularly in the context of medical-conditions.
- The unconscionability of HMSA's Participating Physician Agreement, Provider Agreement for Medicane Plans, and Quest Participating Physician Agreement, as ruled by the Third Circuit Court, has sparked a debate about their potential impact on public health, reinforcing the importance of health and wellness in the discussion.
