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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2004
- **Citation:** 543 U.S. 987

## Text

©

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.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386003_1312%3A2. Public record. Not legal advice.