SB2273

SECTION 1. Chapter 386, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§386- Payment by employer; disputed charges; resolution procedures. (a) The employer shall pay for all medical services required by the employee for a compensable injury and the process of recovery. The employer shall not be required to pay for care unrelated to the compensable injury.

(b) The employer shall not controvert a claim for services:

(1) Without reasonable cause; or

(2) While the claim is pending investigation;

provided that a claim shall be presumed compensable when submitted by an employee who is excluded from health care coverage under the Hawaii prepaid health care act.

(c) An employer shall notify the medical services provider within thirty calendar days of receipt of the notification or bill, if the employer controverts a claim for services rendered or a bill received pursuant to subsection (a). Failure by the employer to submit timely notice to the medical services provider shall render the employer liable for services provided until the employer notifies the medical services provider that the employer controverts additional services.

(d) Any employer who has received a notification of services rendered or a bill from a medical services provider shall be liable for those services and shall pay all charges listed in the notification of services rendered or the bill within thirty calendar days of receipt of the notification or bill, except for items subject to reasonable disagreement between the employer and the medical services provider. If no payment is received by the expiration of the thirty-day period, the medical services provider may increase the total outstanding balance owed for undisputed charges by one per cent per month.

(e) If any charge is subject to reasonable disagreement between the employer and medical services provider, within thirty calendar days of receipt of the bill or notification of services rendered, the employer shall:

(1) Pay all undisputed charges;

(2) Notify the medical services provider of the denial of payment of any disputed charges, and the reason for the denial; and

(3) Provide a copy of the denial to the employee.

(f) The medical services provider may dispute the employer's denial of payment by filing a bill dispute request with the director no later than thirty calendar days after receipt of the denial of payment. The medical services provider's failure to submit a timely bill dispute request shall be considered acceptance of the employer's denial of payment.

(g) The employer's denial of payment shall include the following statement:

"IF THE MEDICAL SERVICES PROVIDER DOES NOT AGREE WITH THE EMPLOYER'S STATED REASON FOR DENIAL OF PAYMENT, THE MEDICAL SERVICES PROVIDER MAY FILE A BILL DISPUTE REQUEST WITH THE DIRECTOR OF THE HAWAII DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS. THE BILL DISPUTE REQUEST SHALL BE CLEARLY IDENTIFIED AS A "BILL DISPUTE REQUEST" IN CAPITAL LETTERS AND IN NO LESS THAN TEN POINT FONT ON THE FRONT OF THE FIRST PAGE OF THE REQUEST AND ON THE FRONT OF THE ENVELOPE IN WHICH THE REQUEST IS SENT AND SHALL INCLUDE A COPY OF THE DISPUTED BILL. ANY BILL DISPUTE REQUEST SHALL BE FILED NO LATER THAN THIRTY CALENDAR DAYS AFTER RECEIPT OF THE EMPLOYER'S DENIAL OF PAYMENT. THE MEDICAL SERVICES PROVIDER'S FAILURE TO SUBMIT A TIMELY BILL DISPUTE REQUEST SHALL BE CONSIDERED ACCEPTANCE OF THE EMPLOYER'S DENIAL OF PAYMENT."

(h) If a reasonable disagreement relating to specific charges cannot be resolved, the employer or medical services provider may request intervention by the director in writing with notice to the other party. Both the front page of the bill dispute request and the envelope in which the request is mailed shall be clearly identified as a "BILL DISPUTE REQUEST" in capital letters and in no less than ten-point type. The director shall send notice to the parties and the parties shall negotiate to resolve the disputed charges during the thirty-one calendar days following the date of the notice from the director. If the parties fail to enter into an agreement during the thirty-one calendar days, then within fourteen calendar days after expiration of the thirty-one-day period, either party, with written notice to the other party, may file a second written request with the director to review the bill dispute. Upon receipt of the second request for review, the director shall send the parties a notice requesting that each party file within fourteen days of receipt of the second notice a position statement with the director, including substantiating documentation that describes the services and amounts in dispute and all actions taken to resolve the dispute. The director shall review the positions of both parties and render an administrative decision without a hearing. The director may assess a service fee of up to $1,000 payable to the general fund against one or more parties who the director finds has failed to negotiate in good faith. Denial of payment without reasonable cause shall be considered failure to negotiate in good faith.

(i) An employee shall be liable for reimbursement of benefits or payments received under this section for any controverted claim that is found to be uncompensable, whether received from an employer, insurer, or the special compensation fund. Reimbursement shall be made to the source from which the compensation was received and may include recoupment by the insurer of all payments made for medical care, medical services, vocational rehabilitation services, and all other services rendered for payment under this section."

SECTION 2. Section 386-21.2, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) A treatment plan shall be deemed accepted if no later than three days after receipt of the treatment plan, an employer fails to file with the director:

(1) An objection to the treatment plan;

(2) Any applicable documentary evidence supporting the denial; and

(3) A copy of the denied treatment plan,

copying the physician and the injured employee."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

Report Title:

Workers' Compensation; Employers; Treatment Plans; Medical Services Providers; Payment; Disagreement; Dispute Resolution Procedures

Description:

Requires that employers pay all workers' compensation claims for compensable injuries and not deny claims without reasonable cause or during a pending investigation. Creates a presumption of compensability for claims submitted by employees excluded from coverage under the Hawaii prepaid health care act. Requires that employers notify medical services providers of any billing disagreements and allows providers to charge an additional rate to employers for outstanding balances owed for undisputed charges. Establishes dispute resolution procedures for employers and providers who have a reasonable disagreement over charges. Requires employers to deny a treatment plan within 3 days of receipt of a treatment plan or the treatment plan is deemed accepted.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

THE SENATE	S.B. NO.	2273
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII