Posted on Aug 27, 2002 in Formal Opinions

Opinion Letter No. 02-07
August 27, 2002
Schedule of Maximum Allowable Medical Fees

Schedules of maximum allowable medical fees (“Fee Schedules”) that are required by statute to be submitted to the Department of Labor and Industrial Relations (“DLIR”) by health care plan contractors (“Contractors”), may be withheld from public disclosure.

Section 386-21.5, Hawaii Revised Statutes, requires Contractors to provide Fee Schedules to the DLIR, and requires the DLIR to use Fee Schedules to establish prevalent charges. Despite this statutory requirement, Contractors have refused to submit Fee Schedules, or have submitted them too late to be included in survey compilations.

Because there are only 15 Contractors who are required by law to submit Fee Schedules, late submittals or non-submittals compromise the validity of the DLIR’s survey. The DLIR asserted that it has no power to force Contractors to comply with the statutory requirement of submitting Fee Schedules.

When information is required to be submitted to an agency, there is a presumption that because the information is required to be submitted, the agency would suffer no frustration of its government function if it disclosed the records. In this case, the DLIR overcame this presumption by showing that disclosure of the Fee Schedules would impair the DLIR’s ability to obtain similar information in the future because statements and actions of Contractors indicate a reluctance to submit Fee Schedules if they will be made public, and because the DLIR is unable to enforce submittal in a timely manner.

This impairment of the DLIR’s ability to obtain Fee Schedules in the future would frustrate its statutory duty of creating prevalent charges. Thus, the DLIR has discretion to withhold disclosure of Fee Schedules as disclosure would frustrate its legitimate government function.

The OIP also adopts the federal test for administrative effectiveness as appropriate for an agency’s invocation of the frustration exception. Protecting the DLIR’s governmental interest in administrative effectiveness is satisfied by the facts presented. The DLIR’s interest in administrative effectiveness would be frustrated if it was unable to obtain accurate and timely Fee Schedules from Contractors. The frustration exception therefore allows the DLIR to withhold disclosure of Fee Schedules.

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