Opposition Brief — Jou v. First Insurance Co. of Hawaii, Ltd.

©

No: 04-355

IN THE SUPREME COURT OF THE UNITED STATES

EMERSON M.F., JOU, M.D.

PETITIONER

VS.

FIRST INSURANCE COMPANY OF HAWAII, LTD.,

RESPONDENTS

ON PETITION FOR A WRIT OF CERTIORARI TO

THE SUPREME COURT OF THE STATE OF HAWAII

BRIEF IN OPPOSITION TO PETITION FOR WRIT OF

CERTIORARI

DENNIS E.W. O’ CONNOR

KELVIN H. KANESHIRO

ELMIRA K.L. TSANG

REINWALD O’CONNOR & PLAYDON LLP

A LIMITED LIABILITY LAW PARTNERSHIP

24" Floor, Makai Tower

733 Bishop Street

Honolulu, Hawaii 96813

Phone: (808) 524-8350

Facsimile: (808) 531-8628

Attorneys for Respondent

FIRST INSURANCE COMPANY OF HAWAII, LTD.

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II.

IIT.

IV.

QUESTIONS PRESENTED FOR REVIEW

Whether this Court has jurisdiction to review the

decisions of the Supreme Court of Hawaii, the Hawaii

Intermediate Court of Appeals, the Hawaii Labor and

Industrial Relations Appeals Board and the Director

of the Hawaii Department of Labor and Industrial

Relations (“Director’’)?

Whether the State of Hawaii’s appointment of an

allegedly biased advisory panel member, and the

Hawaii State Judiciary’s affirmation of the same,

deprived Petitioner EMERSON M.F., JOU, M.D.

(“DR. JOU”) of due process under the Fifth and

Fourteenth Amendments, where nothing in the record

indicates recommendations of the advisory panel were

relied upon by the Director or the appellate board?

Whether Hawaii State agencies and the Hawaii

State Judiciary committed a regulatory taking by

prohibiting DR. JOU from charging patients,

under Hawaii’s worker’s compensation statutes,

for physical therapy provided by staff not licensed

to provide such services?

Whether Hawaii State agencies and Hawaii’s

Intermediate Court of Appeals treated DR. JOU

differently than other physicians employing third-

parties to provide services incident to medical

treatment, when they barred DR. JOU from billing for

physical therapy provided through unsupervised staff

not licensed to provide physical therapy, and thereby

violated DR. JOU’s Fourteenth Amendment equal

protection rights?

Whether the Hawaii State Judiciary violated DR.

JOU’s due process rights and/or committed a

regulatory taking when allegedly biased Hawaii

appellate court judges ruled against him and

allegedly in the interests of a purportedly stacked

Judicial Selection Commission?

il

TABLE OF CONTENTS

a sonihiaacasheues inks eckanbdandtvennsisahasensbbavanonbsies l

a SU PAP MEIO BIGION sscccaccsscsssssnsanssnssavosssesousnssessvavivoens l

CONSTITUTIONAL AND OTHER PROVISIONS

I eta E Lal cheichstnaseicr’Vannaehatbinenastentsasd venues <suonosieniaxesvs |

CONCISE STATEMENT ROR RE SP ccssccnsssnnivseciennvioes 2

SUMMARY OF REASONS FOR DENYING THE

sa sai acca calc haiehis adel sntchkennivevunsdiancoetnnsone 9

a laialneaic hat chisdiesdoehick teas nlonianenmeshikeindinnassieaiae 10

a THERE IS NO JURISDICTION FOR THIS COURT

TO REVIEW DECISIONS ISSUED BY HAWAII

APPELLATE COURTS AND AGENCIEG............. 10

A. DR. JOU’s Claims Were Not Properly Presented

Below So As To Give This Court Jurisdiction fer

a a if RE ge ee 11

_B.' The Hawaii Supreme Court Did Not Pass on DR.

JOU’s Constitutional Claims.....................0..008 13

II. THERE IS NO COMPELLING REASON TO

GRANT A WRIT OF CERTIORARI FOR

QUESTIONS OF STATE LAW......0.0.csccssssesccsseneens 14

Ill. DR. JOU’S CLAIMS HAVE NO MERIT............... 16

A. There is No Due Process Right to Unbiased Advisory

ik uri cebgesahans bxeeies varias «ecaae shake 16

B. DR. JOU Has Not Been Foreclosed From Practicing

Physiatry and He Has Not Been Deprived of Liberty

OE Da Pic rcen sc dan cacnengsthaseieeiecrasion 19

. DR. JOU Was Treated Like to Other Physicians

ON III os ip Blue tisceavencacesthevecceecesh vss 21

. Hawaii’s Judicial Selection Comm ’ssion is Not

“Stacked” and Ruling in the Interests of a Minority of

the Judicial Selection Commission Would Not Secure

PI os bhidsxicixcussnccecacseunssedenehucos 22

Ie AOE cascoksi seonintcities saseunudaemucacticansaigemacle 23

APPENDIX A - Decision of the Director, Department

of Labor and Industrial Relations, filed

November 21, 1990

ll

TABLE OF CITED AUTHORITIES

Cases

Board of Dirs. of Rotary Int'l v. Rotary Club of Duarte, 481

U.S. 537, 107 S.Ct. 1940, 95 L.Ed. 2d 474 (1987).... 11, 14

California v. Holladay, 159 U.S. 415, 16 S.Ct. 53, 40 L.Ed.

FES 5 | en eS On Att eR AAC RUN SAE RT Lan Ae 2

California v. Rooney, 483 U.S. 307, 107 S.Ct. 2852, 97

Lee BIO CET Fv ciececetensennctencacdenissinin autem 14

Esmail v. Macrane, 53 F.3d 176 (7th Cir. 1995) 0.0... 21

First National Bank v. Estherville, 215 U.S. 34, 30 S.Ct.

PRE 6 Lee ee 0 ee cee eereiatdonsdaonnien 2, 13

Fujimoto v. Au, 95 Haw. 116, 19 P.3d 699 (Haw. 2001)..... 11

Goulding v. Feinglass, 811 F.2d 1099 (7th Cir. 1987)........ 20

Hawaii Roofing Co. v. Felix, 49 Haw. 578, 426 P.2d 298

HOH Corp. v. Motor Vehicle Indus. Licensing Bd., Dep't of

Commerce & Consumer Affairs, 69 Haw. 135, 736 P.2d

Bae Te f Oe 7 picetanscinsdincnasiadeniaiaeilaantaunemaniann 12

Johnson v. California, U.S. ___, 124 S.Ct. 1833, 158 L. Ed.

Bee Ie Ue vcecetucsdecenstnsnapndeecisevcueecacseseniiaaacieauaian 10

Lamb Enterprises, Inc. v. Kiroff, 399 F.Supp. 409 (N.D. Ohio

NTO iniésissssicsstevisenes Gissmacnenncaaemaeueianaaenaan 13

ill

Long Grove Country Club Estates, Inc. v. Long Grove, 693 F.

UN: GF CAF. Tah, CID vsdanesitascartddssentvtsiotadesiacienanaiaaes 20

Mutual Life Ins. Co. v. McGrew, 188 U.S. 291, 308, 23 S.Ct.

FE De SE ct Me FE iia ccntdinintisgieaccantednananocns 11

New Orleans Waterworks Co. v. Louisiana, 185 U.S. 336, 22

Re, Eg OD Ec re P isessncsshieicdelasciciieiesuscmecss l

New York C. R. Co. v. New York, 186 U.S. 269, 22 S.Ct. 916,

GG 1 Ts FET ET ikithtstcniarscinicnlcnddesai en 1]

NLRB v. Botany Worsted Mills, 133 F.2d 876 (3" Cir. 1943)

gus upuitasavaduecedeseusahncdsennuesueanatduansiaaniakstesaiddieasiinbeoe 17,18

Palazzolo v. Rhode Island, 533 U.S. 606, 638, 121 S.Ct.

BAGG, ESO 1. BE 2 Fe Ci cistcreuntien 23

Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed. 2d 405

CF Ta ns iacicticcsxacheretueniceinaiesea adnate 20

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158

fF IRA Rcsivnssvsvsdersssasuberkeiensdceeuseihesnstainieabdenszanaebeealiaenn 22

Poka v. Holi, 44 Haw. 483, 357 P.2d 110 (1960).........000.... 12

Radio Station WOW, Inc. v. Johnson, 326 U.S. 120, 65 S.Ct.

£G 72, Gir be Ri. Be 18 OA ictckariactranit abies: 13

Reich v. Freeport, 388 F.Supp. 953 (N.D. Ill. 1974)........... 10

Seibel v. Kemble, 63 Haw. 516, 631 P.2d 173 (1981)......... 17

Smith v. Texas, 233 U.S. 630, 34 S.Ct. 681, 58 L. Ed. 1129

(EOF) oncenkssicssasnstsineistvetiaessiatmihsnetiludlddcglieddemauaadied baad 20

iV

Spies v. Illinois, 123 U.S. 131, 8 S.Ct. 22, 31 L.Ed 80 (1887)

I EOL IR SEIT NETO NE NESE PENNS A ORR RO TT 1]

Thomas v. American Home Prods., 519 U.S. 913, 117 S.Ct.

Fe, 00 bs ee 2d LEO eit tistncinerncanings |

United States v. Greene, 698 F.2d 1364 (9th Cir. 1983) ..... 21

Wilson v. Cook, 327 U.S. 474, 66 S.Ct. 663, 90 L.Ed. 793

ENII Ds <cevcccxvexsneucaninceeapinesaastveracanautccevanestvaienieauanucssibanenss 13

Statutes

Pe RE Be ee Fiend cso caoves sac ede idk ethan jtaah venegsaeananttos 10, 13

Other Authorities

Pike and Fischer, Administrati” We, a, WO nescssetineviouss 18

Rules

United States Supreme Court Rules, Rule 10..............0.. oo

OPINIONS BELOW

Respondent FIRST INSURANCE COMPANY OF

HAWAII, LTD. (“FICOH”) incorporates herein by reference,

the opinions and orders cited by Petitioner EMERSON M.F.,

JOU, M.D. (“DR. JOU” and/or “Petitioner’’). Additionally,

relevant to this matter is the Decision of the Director,

Department of Labor and Industrial Relations, filed

November 21, 1990. See Appendix A.

BASIS OF JURISDICTION

There is no basis for jurisdiction in this Court.

Petitioner has not met requirements necessary to invoke

jurisdiction under 28 U.S.C. 1257. Further, Rule 10(b) of the

Supreme Court Rules (“SCR”) does not grant jurisdiction to

this Court, but merely indicates the general character of

reasons for which the Supreme Court will grant plenary

consideration. Thomas v. American Home Prods., 519 U.S.

913, 117 S.Ct. 282, 283, 136 L. Ed. 2d 201 (1996)(emphasis

added).

CONSTITUTIONAL AND OTHER PROVISIONS

INVOLVED

There are no Constitutional and/or Federal provisions

properly before this court because Petitioner raises no Federal

questions with merit or substance. New Orleans Waterworks

Co. v. Louisiana, 185 U.S. 336, 22 S.Ct. 691, 46 L.Ed. 936

(1902). Issues raised by Petitioner were not passed upon

Federal grounds, but were resolved based upon state law if at

all adjudicated. First National Bank v. Estherville, 215 U.S.

341, 30 S.Ct. 15254 L.Ed. 223, (1910); California v.

Holladay, 159 U.S. 415, 16 S.Ct. 53, 40 L.Ed. 202 (1985).

CONCISE STATEMENT OF THE CASE

This case arises from a Complaint (Record on Appeal

filed in the Hawaii Supreme Court on February 25, 2002

[“RA”] at 1-175) filed on March 5, 1990 in the Disability

Compensation Division (“DCD”) of the State of Hawaii

Department of Labor and Industrial Relations (“DLIR”) by

Respondent FICOH against Petitioner DR. JOU. FICOH

was the workers’ compensation insurance carrier for Pao

Watanabe’s employer, Greeters of Hawaii, Ltd. FICOH

challenged certain charges for medical treatment rendered by

DR. JOU to Ms. Watanabe for work related injuries. FICOH

then filed an Amended Complaint on August 21, 1990, also

charging that DR. JOU rendered physical therapy to Ms.

Watanabe through therapists who were not properly licensed

to render physical therapy, and improperly billed FICOH in

bad faith with erroneous representations that treatment was

performed by duly licensed therapists (RA 248-251)

The Director of the DLIR appointed an advisory

committee of physicians. DR. JOU objected to the

appointment of Dr. Calvin C.M. Kam (“Dr. Kam”), stating

merely that “We could not get a fair hearing from him” (RA

218). No Constitutional clause or Federal issue was raised as

a part of DR. JOU’s objection to Dr. Kam’s appointment.

DR. JOU also failed to make any objections based upon

Federal takings or equal protection during this administrative

tribunal.

On November 21, 1990, the Director of DLIR issued

its Findings of Fact and Decision (“1990 Decision”) (RA

419-423). The 1990 Decision indicated that the medical

advisory panel “did not address issues relative to billings,

reporting requirements and other technical allegations which

do not require medical expertise. The panel recommended a

sanction no more severe than a reprimand.” (RA 419-420).

In the 1990 Decision, the Director found as follows:

Dr. Jou knowingly and improperly used codes 97418

and 97419 which are reserved for services provided

by registered physical therapist. Dr. Jou is entitled to

billing for massage treatments provided by licensed

masseurs, ultrasound, cold and hot pack and

therapeutic exercises provided by registered physical

therapists and services provided by physician

assistants properly supervised. Masseurs, physical

therapists and physician assistants must be licensed

under Hawaii law. Dr. Jou shall be entitled to billings

for services provided by licensed masseurs, registered

physical therapists and physician assistants properly

supervised, provided in combination, computed using

codes 97418 or 97200, and 97419 and/or 97201,

properly adjusted in accordance with administrative

rule Section 12-13-45.

* * * *

Billing for services provided by licensed or

unlicensed physician assistants properly supervised

would be.adjusted 60% and 50% respectively.

Billings for massage treatments provided by

unlicensed masseurs or physical therapy treatments

provided by unlicensed physical therapists are not

allowed.

(RA 422-423)(emphasis in original). The Director did not

address any Federal due process, takings, equal protection or

Constitutional! claims.

On November 28, 1990, DR. JOU filed a Notice of

Appeal regarding the 1990 Decision (RA 428-429). On April

2, 1991, the Labor and Industrial Relations Appeals Board

(“LIRAB”) issued an Order remanding the matter to the

Director of the DLIR to determine all billings that were not

authorized or allowed by the Workers’ Compensation

Medical Fee Schedule, the correct amount that should have

been billed by DR. JOU, and the amount of reimbursement

due to FICOH (RA 546-547).

On October 4, 1991, a hearing was held to address the

issues delineated in the Order of Temporary Remand (RA

812-814, 817). On October 30, 1991, the Director of DLIR

filed a Supplemental to Decision dated November 21, 1990

(1991 Supplemental Decision”) (RA 816-818). According

to the 1991 Supplemental Decision, FICOH requested

reimbursement of $13,493.56 based on its records and an

audit conducted by Accumed (RA 817). DR. JOU, through

his counsel Mark Thomason, Esgq., argued that the Accumed

audit should be disallowed and requested time in which to

respond. Jd. Although Mr. Thomason was granted until

October 15, 1991 in which to file his response, no response

was filed. Jd.

The Director, through the hearing officer, therefore

reviewed the entire record and determined that “Dr. Jou will

be allowed fees of $2,241.93 for services provided Pao

Watanabe during the period August 31, 1987 through July

27, 1990, resulting in a reimbursable amount of $16,950.61

(payments made of $19,192.54 less $2,241.93).” Jd. The

stated figures are reflected in the hearing officer’s

calculations as shown in his worksheets (RA at “Others”

document 5 Emerson Jou (Pao Watanabe); Complainant’s

Exhibit 6 of Complainant’s First Amended Exhibit List dated

August 8, 2001).

On November 4, 1991, DR. JOU filed a second

Notice of Appeal to the LIRAB (RA 819-820). Although a

number of settlement and pretrial conferences were noticed

since December, 1991, the appeal did not proceed to a trial de

novo before the LIRAB until August 8, 2001. DR. JOU filed

his Post-Trial Brief on September 10, 2001, including

arguments that the DLIR Director’s empanelment of Dr. Kam

on the advisory panel consututed a due process violation

(without reference to State or Federal Constitutions), and that

the DLIR Director and Appeal Board’s admission of

FICOH’s Accumed audit violated the Fifth and Fourteenth

Amendments of the United States and Hawaii Constitutions

because DR. JOU was not given the opportunity to examine

its author (RA 1172-1176, 1170-1187, 1188-1223).

On December 17, 2001, the LIRAB issued its

Decision and Order affirming the 1990 Decision and the

1991 Supplemental Decision (RA 1235-1253). The LIRAB

concluded, based solely on Hawaii Revised Statutes and

Hawaii Administrative Rules, that the advisory panel was

properly convened. The LIRAB also found that the

Director’s calculations in the 1991 Supplemental Decision

were not based on the Accumed report, and that the Director

properly disallowed billings performed by those who were

not properly licensed. The LIRAB did not pass on issues of

due process or the Fifth and Fourteenth Amendments (RA

1249, 1251).

DR. JOU filed his Notice of Appeal to the Supreme

Court and the Intermediate Court of Appeals (“ICA”’) of the

State of Hawaii on December 27, 2001 (RA 1255-1276). In

his Opening Brief filed May 6, 20. 2 (“OB”), DR. JOU

ii Mi

argued that (1) the LIRAB and the DLIR Director’s decision

to empanel Dr. Kam on the advisory panel constitutes not

only a due process violation, but an equal protection violation

as well, and (2) the DLIR and LIRAB’s use of Hawaii

Administrative Rules in conflict with Hawaii Revised

Statutes constituted a taking (OB 2-3, 15, 18, 29-30).

The ICA issued a Summary Disposition Order May 7,

2004, stating in relevant part:

Specifically, Dr. Jou contends, “At least one

decisionmaker relied on by the agency (Dr. Calvin

[C.M.] Kam [(Dr. Kam)]), was personally and

financially interested in his decision against [Dr. Jou],

in violation of Article 1, Section 5 of the Constitution

of the State of Hawaii, and the Fifth and Fourteenth

Amendments to The United States Constitution .”

Opening Brief at 2 (citation to appendix omitted).

This argument is unavailing. Dr. Jou’s appeal to the

Appellate Board was a de novo proceeding...and

nothing in the record indicates the Appellate Board

relied upon the recommendations the advisory panel

made to the Director.

x kk *

Dr. Jou also contends that the relevant provision of

the [Hawaii Administrative Rule’s Medical Fee

Schedule] work a taking of his property without due

process of law, “in violation of the Fifth Amendment

of the U.S. Constitution and Article 1, Section 5 of

the Hawaii Constitution[.]” Opening Brief at 27

(capitalization modified). Dr. Jou makes no

detectable argument in support of this assertion, and

thus fails his burden on appeal to prove the

administrative provisions unconstitutional beyond a

reasonable doubt, and show the constitutional defect

clearly, manifestly, and unmistakably.

See Summary Disposition Order May 7, 2004. It should be

noted that the ICA’s opinion made no reference to Federal

laws beyond quotation of DR. JOU’s claims, and discrediting

the same based upon the laws of the State of Hawaii. /d.

On June 1, 2004, DR. JOU filed an Application for

Writ of Certiorari in the Hawaii Supreme Court (““AWC’’).

Questions presented for review include the following:

A. Whether the State’s conduct, approved by the

ICA, penalizing the physician’s practice and

requiring additional licensure as a physical

therapist is a regulatory taking, violating the Fifth —

and Fourteenth Amendments to The United States

Constitution, and Article I Sections 4 and 5 of the

Hawaii Constitution?

B. Whether the ICA authorized the State, by its

agency (LAB), to deprive Petitioner property

without due process of law by permitting the use

of a review board panelist who received payment

prior to the proceedings for an IME on the same

case?

E. Whether the ICA-approved conduct by the agency

limiting the physician’s scope of practice, and

limiting the use of employees and products

incident to the physician’s services, constituted

rule-making without due process, in violation of

the 14" Amendment to The United States

Constitution, and Article I Sections 4 and 5 of the

Hawaii State Constitution?

F. Whether the ICA’s endorsement of the agency’s

conduct restricting the property rights of

Petitioner violated Petitioner’s rights to equal

protection under the Fourteenth Amendment to

The United States Constitution?[...]and whether

the ICA’s decision singled Petitioner out for

treatment disparate from other physicians who

employ licensed non physicians incident to their

services?

(AWC 1-2). The Hawaii Supreme Court denied DR. JOU’s

Application on June 10, 2004. See Order Denying

Application for Writ of Certiorari filed June 10, 2004.

DR. JOU now seeks review by yet another appellate

court, again alleging that constitutional violations occurred

because the last court did not rule in his favor. DR. JOU asks

this Court to find the following:

1. The State of Hawaii’s appointment of an allegedly

biased advisory panel member, and the Hawaii

State Judiciary’s affirmation of the same, deprived

DR. JOU of due process under the Fifth and

Fourteenth Amendments, where nothing in the

record indicates recommendations of the advisory

panel were relied upon by the appellate board.

2. Hawaii State agencies and the Hawaii State

Judiciary committed a regulatory taking by

prohibiting DR. JOU from charging patients,

under Hawaii’s worker’s compensation statutes,

for physical therapy provided by staff not licensed

to provide such services.

3. Hawaii State agencies and the ICA treated DR.

JOU differently than other physicians employing

third-parties to provide services incident to

medical treatment, when they barred DR. JOU

from billing for physical therapy provided through

unsupervised staff not licensed to provide physical

therapy, thereby violating DR. JOU’s Fourteenth

Amendment equal protection rights.

4. The Hawaii State Judiciary violated DR. JOU’s

due process rights and/or committed a regulatory

taking when biased Hawaii appellate court judges

ruled against him and allegedly in the interest of a

purportedly stacked Judicial Selection

Commission.

SUMMARY OF REASONS FOR DENYING THE

PETITION

This Court has no jurisdiction to review decisions of

the Hawaii State courts and agencies below. Failing to meet

the jurisdictional requirements of 28 U.S.C. 1257(a), DR.

JOU did not properly raise Constitutional issues below, nor

did Hawaii’s courts pass upon any Constitutional questions.

Even assuming DR. JOU met jurisdictional requirements,

there is 10 compelling reason for the court to grant review as

the state courts have not decided any questions of Federal

law. Finally, DR. JOU’s claims are substantively devoid of

merit.

ARGUMENT

I. THERE IS NO JURISDICTION FOR THIS COURT

TO REVIEW DECISIONS ISSUED BY HAWAII

APPELLATE COURTS AND AGENCIES

Final judgments or decrees rendered by the highest _

court of a State in which a decision could be had, may

be reviewed by the Supreme Court by writ of

certiorari where the validity of a treaty or statute of

the United States is drawn in question or where the

validity of a statute of any State is drawn in question

on the ground of its being repugnant to the

Constitution, treaties, or laws of the United States, or

where any title, right, privilege, or immunity is

specially set up or claimed under the Constitution or

the treaties or statutes of, or any commission held or

authority exercised under, the United States.

28 U.S.C. 1257(a) (emphasis added). Federal courts are

courts of limited jurisdiction empowered to hear only those

cases which have been entrusted to them by Congressional

grant of jurisdiction, and they have no power to review

judgment of state courts, except where a substantial Federal

question is involved. Reich v. Freeport, 388 F.Supp. 953

(N.D. Ill. 1974), aff'd on other grounds, 527 F.2d 666 (7"

Cir. 1975). Under 28 U.S.C. 1257, jurisdiction is further

limited to review of final judgments or decrees rendered by

the highest court of a State in which a decision could be had.

Johnson v. California, __ U.S. __, 124 S.Ct. 1833, 1834, 158

L. Ed. 2d 696 (2004).

10

A. DR. JOU’s Claims Were Not Properly Presented

Below So As To Give This Court Jurisdiction for

Review

It is well settled that this Court will not review a final

judgment of a state court unless "the record as a whole shows

either expressly or by clear implication that the Federal claim

was adequately presented in the state system." Board of

Dirs. of Rotary Int'l v. Rotary Club of Duarte, 481 U.S. 537,

550, 107 S.Ct. 1940, 95 L.Ed. 2d 474 (1987).

The proper time to assert Federal questions so as to

give the United States Supreme Court jurisdiction on writ of

error to state court, is in the trial court whenever that is

required by the state practice, in accordance with which the

highest court of a State will not revise the judgment of the

court below on questions not therein raised. Mutual Life Ins.

Co. v. McGrew, 188 U.S. 291, 308, 23 S.Ct. 375, 47 L.Ed.

480 (1903). The Federal question relied upon to confer

jurisdiction on Supreme Court cannot first be raised in

Supreme Court of United States. Spies v. Illinois, 123 U.S.

131, 8 S.Ct. 22, 31 L.Ed 80 (1887).

The proper way to assert a Federal question is by

pleading, motion, exception, or other action, part, or

being made part, of the record, showing that the claim was

presented to the court. McGrew, 188 U.S. at 308. A clause

of the Constitution or law of Congress must have been

specified. New York C. R. Co. v. New York, 186 U.S. 269, 22

S.Ct. 916, 46 L.Ed. 1158 (1902).

DR. JOU did not properly raise any of his claims so

as to invoke the jurisdiction of the United States Supreme

Court. Generally, claims regarding constitutional violations

are properly raised before the trial court. Fujimoto v. Au, 95

Haw. 116, 19 P.3d 699 (Haw. 2001). The proper time to

1]

iii iii

raise claims for due process violations associated with bias of

judges is at the trial court level. Poka v. Holi. 44 Haw. 483,

357 P.2d 110 (1960); Hawaii Roofing Co. v. Felix, 49 Haw.

578, 426 P.2d 298 (1967). Similarly, the suggestion of an

advisory panel member’s bias must be made on the record at

the administrative hearing. HOH Corp. v. Motor Vehicle

Indus. Licensing Bd., Dep't of Commerce & Consumer

Affairs, 69 Haw. 135, 141, 736 P.2d 1271, 1274 (1987).

With respect to DR. JOU’s claims of impartiality on

the part of Dr. Kam and consequential due process violations,

such claims arose at the time of the DLIR hearings.

However, charges alleging a constitutional violation were

first made on appeal to the LIRAB (RA 1 173), after the

DLIR hearings had concluded. As well, DR. JOU alleged

that Hawaii appellate court judges were biased and due

process rights were violated, only after their rulings had been

issued and only on appeal thereto. See Petition for Writ of

Certiorari at p. 20-22.

Review of administrative decisions is confined to

issues properly raised in the record of the administrative

proceeding. HOH Corp., 69 Haw. at 141, 736 P.2d at 1274.

DR. JOU’s prohibition from billing for services provided by

unlicensed staff was first pronounced in the decision issued

by the DLIR Director (RA 419-423). The prohibition was

not alleged to be a regulatory taking until appeal to the ICA

(OB 15). Similarly, DR. JOU neglected to raise his equal

protection allegations related to disparate treatment by the

DLIR, during proceedings before the DLIR. In fact, the

argument was not made until DR. JOU’s application for Writ

of Certiorari to the Hawaii Supreme Court (AWC 2).

Because DR. JOU was required to raise his regulatory taking

and equal protection claims during the DLIR proceedings,

but failed to do so until the appeal, this Court is unable to

review the same on writ of error.

12

B. The Hawaii Supreme Court Did Not Pass on DR.

JOU’s Constitutional Claims

For the Supreme Court to review a decision of a state

court, it must appear affirmatively from record not only that a

Federal question was presented to highest court of state

having jurisdiction but that its decision of the Federal

question was necessary for determination of case. Wilson v.

Cook, 327 U.S. 474, 66 S.Ct. 663, 90 L.Ed. 793 (1946). It is

not enough to give the United States Supreme Court

jurisdiction over judgment of a state court for the record to

show that a Federal question was argued or presented to that

court for decision; it must appear that decision of the Federal

question was necessary to the determination of cause and that

it was actually decided, or that judgment, as rendered, could

not have been given without deciding it. First National Bank

v. Estherville, 215 U.S. 341, 54 L.Ed. 223, 30 S.Ct. 152

(1910).

Accordingly, the U.S. Supreme Court has no

jurisdiction to review a state decision resting on adequate and

independent non-Federal grounds; the decision will not be

reviewed even though the state court may have also

summoned to its support erroneous views of Federal law.

Radio Station WOW, Inc. v. Johnson, 326 U.S. 120, 65 S.Ct.

1475, 89 L.Ed. 2092 (1945). Where a decision might have

been rendered on either Federal ground or state ground, the

Supreme Court will not review the Federal ground on appeal

as of right under 28 U.S.C. § 1257 unless the state ground is

too insubstantial or insufficient to justify the result below.

Lamb Enterprises, Inc. v. Kiroff, 399 F.Supp. 409 (N.D. Ohio

1975), revd on other grounds 549 F.2d 1052 (6" Cir. 1977),

cert. denied 431 U.S. 968, 97 S.Ct. 2926, 53 L.Ed. 2d 1064

(1977).

13

Jurisdiction in this matter is deficient because the

Hawaii Supreme Court did not pass on DR. JOU’s

constitutional questions, based upon Federal grounds or

otherwise. When an issue has not been the subject of

judgment from the highest state court, review by the U.S.

Supreme Court would be premature and the writ of certiorari

should be dismissed. California v. Rooney, 483 U.S. 307,

313, 107 S.Ct. 2852, 97 L.Ed.2d 258 (1987). When the

highest state court fails to pass upon a Federal question, such

as the case when the highest state court denies review without

opinion, it will be assumed that the omission was due to want

of proper presentation in the state courts, unless the aggrieved

party in this Court can affirmatively show the contrary.

Board of Dirs. of Rotary Int'l v. Rotary Club of Duarte, 481

U.S. 537, 550, 107 S.Ct. 1940, 95 L. Ed. 2d 474 (1987).

The Hawaii Supreme Court denied DR. JOU’s

Application for Writ of Certiorari without issuing an opinion

on June 10, 2004. No Federal questions were passed upon on

Federal grounds. See Order Denying Application for Writ of

Certiorari filed June 10, 2004. Even if this Court could

review the ICA’s written opinion, Constitutional issues

therein were dismissed as insubstantial and the LIRAB’s

decision was validated on state law grounds. See Summary

Disposition Order May 7, 2004. Thus, there is no final

judgment rendered by the highest court of the State of Hawaii

for this Court to review.

Il. THERE IS NO COMPELLING REASON TO

GRANT A WRIT OF CERTIORARI FOR

QUESTIONS OF STATE LAW

Review on a writ of certiorari is not a matter of right,

but of judicial discretion. A petition for a writ of

14

certiorari will be granted only for compelling reasons.

The following, although neither controlling nor fully

measuring the Court's discretion, indicate the

character of the reasons the Court considers:

(a) a United States court of appeals has entered a

decision in conflict with the decision of another

United States court of appeals on the same

important matter; has decided an important

Federal question in a way that conflicts with a

decision by a state court of last resort; or has so

far departed from the accepted and usual course of

judicial proceedings, or sanctioned such a

departure by a lower court, as to call for an

exercise of this Court's supervisory power;

(b) a state court of last resort has decided an important

Federal question in a way that conflicts with the

decision of another state court of last resort or of a

United States court of appeals;

(c) a state court or a United States court of appeals

has decided an important question of Federal law

that has not been, but should be, settled by this

Court, or has decided an important Federal

question in a way that conflicts with relevant

decisions of this Court.

A petition for a writ of certiorari is rarely granted

when the asserted error consists of erroneous factual

findings or the misapplication of a properly stated rule

of law.

SCR Rule 10 (emphasis added). Guided by SCR Rule 10, it

is clear that the issues raised by DR. JOU’s Petition for Writ

of Certiorari are not of the character necessary for United

States Supreme Court review.

15

It is equally clear that the DLIR, LIRAB, ICA and

Hawaii Supreme Court did not decide any question of

Federal law. Rather, all issues addressed were resolved

based on Hawaii State law. DR. JOU also asserts only that

constitutionally valid Hawaii State laws were erroneously

applied.

III. DR. JOU’S CLAIMS HAVE NO MERIT

Examining DR. JOU’s individual contentions, there is

no basis in law or fact for a ruling in his favor.

Substantively, DR. JOU’s claims have no merit.

A. There is No Due Process Right to Unbiased

Advisory Panel Members

DR. JOU argues that a due process violation resulted

when Dr. Kam was allowed to serve on the advisory panel to

the hearing conducted by the Director of the DLIR. In

support of this proposition, DR. JOU first argues that errors

regarding the legitimacy of judges and jurors are structural,

and therefore prejudice need not be proved. Assuming this

principle is true, it is nonetheless inapplicable to the facts of

our case. Dr. Kam was neither an adjudicator nor fact finder.

Dr. Kam was merely one of three advisory panel members

whose report the adjudicator and fact finder were at liberty to

consider o1 ignore.

DR. JOU next argues that special masters are subject

to the same standards as judges, therefore advisory panel

members should be held to the same standard as adjudicators.

DR. JOU, however, cites no authorities that analogize or

compare advisory panel members to special masters, but

16

merely reasons that because they are both subject to the

control of an adjudicator, they should be held to the same

standard as the adjudicator. There is no weight to this

contention.

Finally, DR. JOU maintains, citing Seibel v. Kemble,

63 Haw. 516, 631 P.2d 173 (1981), that since court-appointed

psychiatrists enjoy judicial immunity like advisory panel

members, the standards applicable to judges applies equally

to advisory panel members. DR. JOU’s logic is seriously

flawed because the cloak of judicial immunity does not

transform a court-appointed psychiatrist into an adjudicator.

Therefore, the bias of an advisory panel is not to be judged in

the same manner as that of an adjudicator.

Instead, the proper standard applicable to evaluations

of alieged biases in the context of administrative hearings and

advisory personnel is found in the NLRB v. Botany Worsted

Mills, 133 F.2d 876 (3™ Cir. 1943). There, a complaint was

made against an employer for unfair labor practices. It was

alleged that the employer’s due process right were violated

because the National Labor Relations Board’s trial examiner

was previously employed by the NLRB and thereby biased.

The trend of the [employer’s] whole argument presses

too hard the analogy between trial examiner and

Board and trial court and appellate court. It is the

Board, not the trial examiner, which is charged by the

Act with both the power and responsibility of making

findings of fact and the decisions thereon. The trial

examiner [...} makes findings and recommendations

presented to the Board as an intermediate report.

Unlike judges, trial examiners may be substituted at

the will of the Board during the course of either

representation or complaint proceedings. In both the

17

representation and complaint proceedings all the

pleadings, notices, rulings, orders, stenographic

records, exhibits, documents and depositions

constitute the record before the Board. The trial

examiner's intermediate report is merely advisory and

the Board may accept or reject it. Indeed, the latest

commentators upon the subject have said that the

report of the trial examiner "is to be regarded as in the

nature of an 'inter-office memorandum,’ whose

presence or absence does not or should not affect the

result of the case being determined by the agency ~

tribunal." Pike and Fischer, Administrative Law, §

63a.16. It is the Board, therefore, which has the final

responsibility both under the terms of the statute and

the decisions of the courts construing and applying it.

[...] If bias is charged against it or one of its

members, a different problem arises and this court

has, in the past, taken action it deemed appropriate

under the circumstances.

Botany Worsted Mills, 133 F.2d at 882-883.

As in Botany Worsted Mills, our case presents an

advisory report that was provided as an intermediate report to

the decision maker. Dr. Kam was an advisory panel member;

one of three members. He drafted a report which the DLIR

Director was at liberty to use or disregard. Final

responsibility for the decision rested with the Director and

not Dr. Kam. As noted by the ICA’s Summary disposition

order, “the appeal to the [LIRAB] was a de novo

proceeding...and nothing in the record indicated that

[LIRAB] relied upon the recommendations the advisory

panel made to the Director [below].” See Summary

Disposition Order May 7, 2004, p.2.

18

DR. JOU has made no showing that Dr. Kam

participation on the advisory panel resulted in a due process

violation. Indeed, he cannot because the Director did not

adopt Dr. Kam’s more lenient recommendation.

B. DR. JOU Has Not Been Foreclosed From

Practicing Physiatry and He Has Not Been

Deprived of Liberty or Properly Interests

DR. JOU’s takings claim rests on the argument that

the decisions below “forces licensed physicians to employ

physical therapists licensed in Hawaii as a condition to

providing some of the medical services listed in the state’s

medical fee schedule.” DR. JOU misperceives and

mischaracterizes the decisions below.

The DLIR Director’s decision did not prohibit DR.

JOU from providing physical therapy unless a licensed

physical therapist was employed. Instead, DR. JOU was only

prohibited from charging for physical therapy services

pursuant to Hawaii’s workers’ compensation statutes, and

only where such services were performed by_unlicensed staff

without supervision. The Director’s decision has not

restricted DR. JOU’s ability to provide physical therapy

outside of Hawaii’s workers’ compensation statutes. The

Director’s decision also permits DR. JOU to receive payment

for physical therapy he himself provides or directly

supervises, pursuant to Hawaii’s workers’ compensation

scheme. Therefore, the issue is whether DR. JOU was

deprived of a property interest when the State prohibited him

from charging patients for physical therapy services where

such services were provided by an unsupervised and

unlicensed staff member, in violation of Hawaii’s workers’

compensation statutes.

19

Liberty includes the right "to work for a living in the

common occupations of the community." Long Grove

Country Club Estates, Inc. v. Long Grove, 693 F. Supp. 640,

662 (D. Ill., 1988). But it is well established that in the

exercise of police power, the State may prescribe tests and

require a license from those who wish to engage in or remain

in a private calling affecting the public safety. Smith v.

Texas, 233 U.S. 630, 638, 34 S.Ct. 681, 58 L. Ed. 1129

(1914). The Supreme Court has held that even the loss of

one's job does not amount to a deprivation of liberty, as long

as the plaintiff remains free to locate alternate employment.

Long Grove, 693 F. Supp. at 662.

The Supreme Court in Paul v. Davis, 424 U.S. 693,

96 S.Ct. 1155, 47 L.Ed. 2d 405 (1976) makes clear that to

find the deprivation of a property interest in an alleged

deprivation of right to practice one’s profession, an

individual’s legal rights or status must have been removed or

significantly altered. Goulding v. Feinglass, 811 F.2d 1099,

1102 (7th Cir. 1987). There is no deprivation of a property

right to work where such individual has not lost the right to

practice his profession, his license to practice has not been

revoked or suspended, and he is still currently practicing. /d.

at 1103. In essence, no liberty interest is impaired where an

individual is not foreclosed by a legal barrier from practicing

his profession.

Despite his extreme assertions, DR. JOU has not been

prohibited from providing physical therapy services, nor has

he lost the right to practice physiatry, with or with a licensed

therapist. He maintains the right to practice any physical

therapy that he himself performs as a part of physiatry

treatment. DR. JOU’s license to practice physiatry has not

been revoked, and DR. JOU is currently practicing physiatry.

DR. JOU therefore has not been subject to a liberty or

property infringements.

20

C. DR. JOU Was Treated Like to Other Physicians

Similarly Situated

DR. JOU next argues that the courts and agencies

below treated him differently from similarly situated

physicians who provide services through employees incident

to treatment.

There is a category of equal protection claims in

which government officials prosecute individuals for

vindictive or otherwise illegitimate reasons. Esmail v.

Macrane, 53 F.3d 176, 178-80 (7th Cir. 1995). “To succeed

on a claim of selective prosecution, the defendant has a two-

part burden. He must establish both that others similarly

situated have not been prosecuted and that the allegedly

discriminatory prosecution . . . was based on an

impermissible motive." United States v. Greene, 698 F.2d

1364, 1368 (9th Cir. 1983).

DR. JOU has failed to make an adequate showing of

either prong of the test enumerated in Greene. DR. JOU

offers no evidence that other physicians have charged

patients under Hawaii’s workers’ compensation scheme for

unsupervised physical therapy services conducted by

unlicensed employees (or those similarly situated), without

being prosecuted for such conduct. Far short of providing

evidence, DR. JOU has not even suggested an improper

motive for the alleged discriminatory prosecution. There is

not a scintilla of evidence to support DR. JOU’s equal

protection claim.

21

D. Hawaii’s Judicial Selection Commission is Not

“Stacked” and Ruling in the Interests of a

Minority of the Judicial Selection Commission

Would Not Secure Judges’ Retention

DR. JOU alleges that the State of Hawaii committed a

regulatory taking of property rights to practice his profession,

subject to Pennsylvania Coal Co. v. Mahon, 260 U.S. 393,

396-398, 43 S.Ct. 158 (1922), when the ICA formulated its

decision in favor of FICOH. DR. JOU alludes to improper

rulings by ICA judges, for the purposes of furthering their

retention by appeasing three members of Judicial Selection

Commission who allegedly have strong ties to Hawaii’s

health and property casualty insurers. Although his argument

is unclear and disjointed, DR. JOU may also be implicating

the State’s composition of the Judicial Selection Commission

itself.

Petitioner’s allegations regarding ICA judges and the

Judicial Selection Commission are based upon speculation

and conjecture. The Judicial Selection Commission is

comprised of nine members. Two are elected by the Hawaii

Bar Association; Two are elected by the Governor; Two are

elected by the Senate President; Two are elected by the

House of Representative Speaker; and, One is selected by the

Chief Justice. It is ridiculous for Petitioner to allude to a

“packing” of Hawaii’s Judicial Selection Commission, where

only three of nine Commission members are alleged to “earn

all or a substantial amount of income from the state health

and property casualty insurers.” Even if the three members

did have affiliations with insurance carriers as alleged by

Petitioner, three out of nine members could hardly be

considered “packing” or “filling” the Commission with

members having an interest in insurance carriers. It is even

more outrageous for Petitioner to allude that judges sitting on

22

the intermediate court of appeals would write an opinion in

favor of insurance carriers, merely to appease three of nine

Commission members, and thus be able to somehow secure

their retention.

Petitioner also fails to show that a taking occurred. A

taking is a governmental acquisition of private property for

which the state is required to provide just compensation.

Palazzolo v. Rhode Island, 533 U.S. 606, 638, 121 S. Ct.

2448, 150 L. Ed. 2d 592 (2001). As discussed above,

Plaintiff cannot identify any personal property that that was

taken from him. As stated above, the ICA did prohibit DR.

JOU from practicing his profession by revoking his license or

otherwise. There simply was no taking.

CONCLUSION

For the foregoing reasons, Respondent FIRST

INSURANCE COMPANY OF HAWAII, LTD. respectfully

requests that DR. JOU’s Petition for Writ of Certiorari be

denied.

DENNIS E.W. 0’CSNNOR

KELVIN H. KANESHIRO .

ELMIRA K.L. TSANG

Attorneys for Respondent

FIRST INSURANCE COMPANY

OF HAWAII, LTD.

23

STATE OF HAWAII

DEPARTMENT OF LABOR AND INDUSTRIAL

RELATIONS 2

DISABILITY COMPENSATION DIVISION

830 PUNCHBOWL STREET

P. 0. BOX 3769

HONOLULU. HAWAII 96812-3769

CASE NUMBER: C9001

COMPLAINT DATE: March 5, 1990

EMERSON H. F. JOU, M.D., M.P.H.

Comprehensive Clinic of Rehabilitation

Medicine

Kuakini Medical Plaza

321 N. Kuakini Street, Suite 410

Honolulu, Hawaii 95817

MARK R. THOMASON, ESQ.

820 Mililani Street, Suite 615

Honolulu, Hawaii 96813

FIRST INSURANCE CO. OF HAWAII, LTD.

P.0. Box 2866

Honolulu, Hawaii 96803

LEROY T. KUWASAKI, JR., ESQ.

550 Halekauwila Street, Suite 105

Honolulu, Hawaii 96813

ATTN: DEPUTY ATTORNEY GENERAL

WORKERS’ COMPENSATION SPECIAL FUND

425 Queen Street, Third Floor

Honolulu, Hawaii 96813

Such investigation of the above-entitled matter having

been made as he deems necessary, the Director makes the

following

APPENDIX A

FINDINGS OF FACT

On March 5, 1990, First Insurance Company of

Hawaii, Ltd., filed a complaint under Section 386-27, HRS,

against Emerson M. F. Jou, M.D., M.P.H. alleging violations

of Sections 386-27, 386-96, and 453-8, HRS; Sections 12-10-

71, 12-13-1, 12-13-13, 12-13-30, 12-13-36, 12-13-38, 12-13-

40, 12-13-80, 12-13-91, and 12-13-95 of the Workers’

Compensation Administrative Rules, relative to treatments

provided to Pao Watanabe (CN: 28711296). By letter dated

March 12, 1990, Dr. Jou filed with the director a written

statement in response to the complaint. First Insurance

Company of Hawaii, Ltd., filed with the director an amended

complaint on August 21, 1990. A hearing on the complaint

was held on October 3, 1990.

Specifically, the complaint alleges that while treating

Pao Watanabe, for an industrial injury to her back on March

11, 1987, Dr. Jou:

1. persistently refused to consider the recommendations

made by board certified and qualified health care

providers to refer claimant for psychotherapy;

2. provided passive physical treatment no longer

required by the nature of the injury;

3. failed to make a diligent effort to secure all available

medical information from claimant’s previous

physicians;

4. failed to comply with the responsibilities of an

attending physician;

5. allowed concurrent physical therapy treatments

without prescription;

6. allowed unlicensed or unqualified individuals to treat

while not directly controlled or supervised by the -

attending physician;

Sree ee

7. in bad faith submitted misleading billings;

8. refused to treat the injured worker with valid reason;

9. failed to file reports as required by Section 386-96,

HRS, Section 12-13-80, and related Administrative

Rules;

10. failed to properly annotate reports filed with the

Director;

11. charged fees for care of the industrial injury to the

injured employee;

12. failed to certify that charges for supplies were

required or prescribed for the industrial injury.

Dr. Jou indicated that the patient suffered chronic

pain due to muscle strain and not due to psychogenic factors.

Dr. Jou indicated that he does not object to psychological

intervention and did offer psychological referral to the

claimant which was always declined. He also indicated he

was granted authorization to provide treatments and the

patient responded to the physical therapy treatment. Dr. Jou

felt that he obtained sufficient medical information to

properly diagnose and treat the patient. He also felt that he

provides his staff with proper prescriptions and special

instructions, supplemented with frequent verbal and written

communication regarding patient responses. Dr. Jou indicated

that he submitted properly annotated medical reports and did

not bill or demand payment from the patient for care related

to the industrial injury.

The employer alleges that Dr. Jou was aware of

claimant’s psychological problems and had numerous

medical opinions from qualified health care providers to

include Roy Sam, M.D., Calvin C. M. Kam, M.D., Francy

Mateus, M.D., and Vincent Onorato, Ph.D. who indicated the

need for psychological evaluation and treatment. Employer

also stated that Dr. Jou submitted at least 12 plans to provide

the same type of passive physical therapy treatment at the

same frequency for over 2 years without improvement in the

patient’s condition and which was not required by the nature

of the injury. Drs. Sam, in a report dated October 21, 1988,

Kam, in reports dated February 3, 1989 and September 4,

1989, and Mateus, in a report dated August 30, 1989,

indicated the patient does not require further passive physical

therapy treatment. Employer further alleges that in failing to

obtain important and relative medical information from other

health care providers, Dr. Jou was not aware of the EMG test

performed on August 13, 1987 which indicated no signs of

radiculopathy and a bone scan performed by the Hickam

Dispensary on October 13, 1987 which indicated normal

results. Dr. Jou was also not aware of depression treatments

provided in 1982 and 1988.

The employer also alleges that Dr. Jou failed to fulfill

his responsibilities for treating and overall coordination of

services provided by nonphysicians. The employer alleges

Dr. Jou failed to file and failed to have nonphysicians file

required reports on a timely basis and with proper

annotations as required under Section 386-96, HRS, and

administrative rule Sections 12-10-71 and 12-13-80. No

documentation was kept to measure the patient’s progress

which would be necessary to determine the efficacy of

ongoing care. No written prescriptions or reports from the

physician and therapists who provided services were received

by the employer. The patient indicated during a deposition

that services were performed by unlicensed individuals while

not under the direct control and supervision of Dr. Jou. The

employer further indicated that Dr. Jou incorrectly billed for

services provided by non-licensed individuals. The employer

also alleges that Dr. Jou violated administrative rule Section

12-13-13(a)(11) by billing both the patient and employer for

services rendered on 9/10/88 - 10/20/88, 11/9/88 - 11/18/88,

and 1/3/8 - 1/6/89. Finally the employer alleges that Dr. Jou

failed to certify his prescription for TENS unit on September

21, 1987.

A medical advisory panel, consisting of David Y. Kimura,

M.D., Calvin C. M. Kam, M.D., and Bernard M. Portner,

M.D. was convened on July 3, 1990. The panel noted that

although Pao Watanabe requires psychiatric treatment, Dr.

Jou did offer this referral, which the claimant refused. The

panel determined that “ultrasound and massage treatments

have been excessive and reached the point of becoming

inappropriate and unnecessary long ago.” However the panel

noted that these treatments were approved by the Department

of Labor. Dr. Kam indicated that a responsible health care

practitioner would not continue such treatments which result

in no health care benefit. The panel felt that obtaining prior

health care records is within the discretion and judgment of

the physician and in this case may be considered an error in

judgment since this information would aid in the assessment

and treatment of the patient. The panel felt that “the therapist

under Dr. Jou’s supervision should be required to do the

same recording and reporting as a therapist not associated

with the physiatrist.” Dr. Kam also noted that Dr. Jou “was

not able to provide any further health care data relative to

what was done by his staff, the benefits thereof’. The panel

did not address issues relative to billings, reporting

requirements and other technical allegations which do not

require medical expertise. The panel recommended a sanction

no more severe than a reprimand.

All parties agreed that both parties would be allowed

to file final position papers with the department on October

17, 1990. A Supplemental Complaint and Position Statement

was submitted by First Insurance Co. of Hawaii on October

17, 1990. No additional statements were filed by Dr. Jou.

Upon review of the entire record, we find that Dr. Jou

acted in bad faith and is in violation of provisions of Section

386-27, HRS, and the related rules. The advisory panel of

medical experts clearly indicated that Dr. Jou provided

ultrasound and massage treatments which were inappropriate

and unnecessary. The fact that additional treatments were

authorized does not relieve Dr. Jou of his responsibility to

provide only treatments as required by the nature of the

injury.

We further find that Dr. Jou violated administrative

rule Sections 12-13-13(a)(3), (4), and (8) by allowing

unlicensed individuals to provide physical therapy

treatments. Dr. Jou knowingly and improperly used codes

97418 and 97419 which are reserved for services provided by

registered physical therapist. Dr. Jou is entitled to billings for

massage treatments provided by licensed masseurs,

ultrasound, cold and hot pack and therapeutic exercises

provided by registered physical therapists and services

provided by physician assistants properly supervised.

Masseurs, physical therapists and physician assistants must

be licensed under Hawaii Law. Dr. Jou shall be entitled to

billings for services provided by licensed masseurs,

registered physical therapists and physician assistants

properly supervised, provided in combination, computed

using codes 97418 or 97200, and 97419 and/or 97201,

properly adjusted in accordance with administrative rule

Section 12-13-45. For example, billing for a patient receiving

hot and cold packs, ultrasound, therapeutic exercises by a

registered physical therapist for 30 minutes and massage by a

licensed masseur for 15 minutes, in combination in 1988,

would be computed as follows:

97418(PT) 1.0 unit X 23.27 =23.27

97419(PT) .4 unitsX 23.27 = 9.31

97201(Massage) .4 unitsX 23.27 = 9.31

=41.89 = 41.90 X 1.04

= $43.58

Billing for services provided by licensed or unlicensed

physician assistants properly supervised would be adjusted

60% and 50% respectively. Billings for massage treatments

provided by unlicensed masseurs or physical therapy

treatments provided by unlicensed physical therapists are not

allowed. Dr. Jou shall forfeit or reimburse the employer for

all billings or payments made in excess of that allowed by the

Workers’ Compensation Medical Fee Schedule.

In addition, Dr. Jou is fined $7,000.00 payable to the

Workers’ Compensation Special Compensation Fund, for

providing unnecessary treatments, for allowing unlicensed

individuals to provide massage and physical therapy, for

failure to provide proper supervision, failure to prepare or

have prepared appropriate reports to indicate the nature and

efficacy of the treatment provided to Pao Watanabe, failureto—-

submit required reports and repeated submission of

inaccurate and misleading bills.

Thereupon the Director makes the following

DECISION

l. Pursuant to Section 386-27, HRS, Emerson M. F. Jou,

M.D. shall reimburse said employer for billings for

medical care, services and supplies provided to Pao

Watanabe relative to her injury on March 11, 1987

(CN: 28711296) not authorized or computed in

accordance with the Workers’ Compensation Medical

Fee Schedule. In accordance with Section 12-13-

13(a)( 14) of the Workers’ Compensation Medical Fee

Schedule Administrative Rules, disallowed fees shall

not be chargeable to Pao Watanabe.

y Pursuant to Section 386-27, HRS, Emerson M. F. Jou,

M.D. shall be fined $7,000.00, which is immediately

payable to the Workers’ Compensation Special

Compensze ion Fund.

BY ORDER OF THE DIRECTOR, NOVEMBER 21,

1990.

Administrator

APPEAL: This decision may be appealed by filing a

written notice of appeal with the Director of

Labor and Industrial Relations or his county

representative within twenty days after a copy of

this decision has been sent.