Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 1 of 25 PageID #: 11
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`Exhibit A
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`
`
`Exhibit A
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`
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`Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 2 of 25 PageID #: 12
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`BRONSTER FUJICHAKU ROBBINS
`A Law Corporation
`
`#4750
`MARGERY S. BRONSTER
`#7198
`REX Y. FUJICHAKU
`
`#5687
`LANSON K. KUPAU
`
`#11280
`NOELLE E. CHAN
`
`1003 Bishop Street, Suite 2300
`Honolulu, Hawai‘i 96813
`Telephone: (808) 524-5644
`Facsimile: (808) 599-1881
`
`Attorneys for Plaintiffs
`SCOTT J. MISCOVICH, M.D. LLC and
`WINDWARD URGENT CARE SERVICES LLC
`
`
`Electronically Filed
`FIRST CIRCUIT
`1CCV-21-0001611
`30-DEC-2021
`01:00 PM
`Dkt. 1 CMPS
`
`IN THE CIRCUIT COURT OF THE FIRST CIRCUIT
`STATE OF HAWAI‘I
`SCOTT J. MISCOVICH, M.D. LLC and
` Civil No. ___________________________
`WINDWARD URGENT CARE
`(Other Non-Vehicle Tort)
`
`SERVICES LLC,
`
`COMPLAINT; DEMAND FOR JURY
`
`TRIAL; SUMMONS
`
`
`
`
`UNIVERSITY HEALTH ALLIANCE, a
`Hawai‘i mutual benefit society,
`
`
`
`
`
`
` Plaintiffs,
`
`vs.
`
`
`
` Defendant.
`
`
`
`COMPLAINT
`
`Plaintiffs SCOTT J. MISCOVICH, M.D. LLC and WINDWARD URGENT
`
`CARE SERVICES LLC, by their attorneys, Bronster Fujichaku Robbins, bring
`
`their Complaint against Defendant UNIVERSITY HEALTH ALLIANCE, and allege
`
`as follows:
`
`
`
`
`
`Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 3 of 25 PageID #: 13
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`INTRODUCTION
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`1.
`
`This is an action seeking specific performance, declaratory relief, and
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`damages based on Defendant University HealthCare Alliance’s (“UHA”) bad faith
`
`denial of thousands of insurance claims for COVID-19 testing, all in violation of
`
`the Families First Coronavirus Response Act (“FFCRA”), the Coronavirus Aid,
`
`Relief, and Economic Security (“CARES”) Act, and other relevant law.
`
`2.
`
`Plaintiffs, collectively known as Premier Medical Group Hawai‘i
`
`(“PMG”), are owned and overseen by Scott J. Miscovich, MD (“Dr. Miscovich”).
`
`Dr. Miscovich has been a regularly featured guest on CNN to discuss the COVID-
`
`19 pandemic and is a recognized testing expert and consultant throughout the
`
`United States.
`
`3.
`
`Defendant UHA provides private medical, drug and vision insurance
`
`coverage in the State of Hawai‘i. Plaintiffs have been participating medical
`
`providers in UHA’s network of approved providers since 2003.
`
`4.
`
`PMG has been the State’s leading COVID-19 test provider since
`
`March 2020. In response to COVID-19 outbreaks, and after a referral from the
`
`Hawai‘i Department of Health, the Hawai‘i Emergency Management Agency
`
`would call PMG to administer COVID-19 tests to dozens of companies and
`
`organizations whose employees are insured by UHA.
`
`5.
`
`In addition, PMG contracted with various nursing homes,
`
`rehabilitation and assisted living facilities to administer COVID-19 tests to its
`
`staff and residents, who have been exposed to confirmed COVID-19 positive
`
`individuals which increased the risk of COVID-19 contact.
`
`
`
`2
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`
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`6.
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`Furthermore, PMG has provided COVID-19 testing to its own
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`employees, who have been on the front lines administering these COVID-19
`
`outbreak tests.
`
`7.
`
`Under the FFCRA, CARES Act, and other relevant law, UHA must
`
`pay claims for diagnostic COVID-19 testing. Per the federal mandates, PMG has
`
`submitted COVID-19 test claims for payment in full by UHA.
`
`8.
`
`However, UHA has refused to cover Plaintiffs submitted COVID-19
`
`testing claims, asserting that the tests should be paid by each private facility or
`
`under workers’ compensation. UHA’s denial of COVID-19 diagnostic testing
`
`claims is a violation of federal law and UHA’s own policies.
`
`9.
`
`Plaintiffs vigorously disputed UHA’s denial of the claims. In
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`retaliation, UHA summarily terminated Plaintiffs as participating providers in
`
`UHA’s provider network effective February 1, 2022.
`
`10. UHA’s retaliatory termination of Plaintiffs as a network provider is
`
`improper and in bad faith.
`
`PARTIES, JURISDICTION AND VENUE
`
`11. Plaintiff Scott J. Miscovich M.D. LLC, located at 46-001
`
`Kamehameha Hwy., Ste. 107, Kaneohe, Hawai‘i, is a limited liability company,
`
`duly licensed in the State of Hawai‘i to provide services, diagnosis, and treatment
`
`of medical conditions. Scott J. Miscovich M.D. LLC provides COVID-19 tests to
`
`individuals throughout the State of Hawai‘i, including UHA members.
`
`12. Plaintiff Windward Urgent Care Services LLC, located at 46-001
`
`Kamehameha Highway, Suite 107, Kaneohe, Hawai‘i 96744, is a Hawai‘i limited
`
`
`
`3
`
`
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`Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 5 of 25 PageID #: 15
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`liability company, duly licensed in the State of Hawai‘i to provide services,
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`diagnosis, and treatment of medical conditions. Windward Urgent Care is
`
`Kaneohe’s COVID-19 Regional Testing Site, testing thousands of individuals,
`
`including many UHA members.
`
`13. Upon information and belief, Defendant UHA is a mutual benefit
`
`society domiciled in Hawai‘i, with its principal place of business located at 700
`
`Bishop Street, Suite 300, Honolulu, Hawai‘i 96813.
`
`14. This Court has jurisdiction pursuant to Haw. Rev. Stat. § 603-
`
`21.5(a)(3).
`
`15. Venue is proper under Haw. Rev. Stat. § 603-36(5).
`
`STATEMENT OF FACTS
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`UHA’s Relations with Premier Medical Group Hawai‘i
`
`16. Plaintiffs have been participating providers in UHA network of health
`
`care providers eligible to provide health care services to UHA’s insured members.
`
`17.
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`In addition, UHA has had group coverage agreements with each of
`
`the Plaintiffs to provide health care insurance to Plaintiffs’ employees and their
`
`covered family members.
`
`18. Plaintiffs are health care providers who participate in UHA’s provider
`
`network, and until November 30, 2021, were customers of UHA whose employees
`
`and family members were covered by UHA’s health plans. Because of UHA’s
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`improper and retaliatory termination of Plaintiffs’ as participating providers,
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`Plaintiffs are now covered by Hawai‘i Medical Service Association (“HMSA”).
`
`
`
`
`
`
`
`4
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`
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`COVID-19 Hits the State
`
`19. On March 5, 2020, Governor David Y. Ige declared Hawai‘i to be
`
`under a COVID-19 Emergency, which remains in effect.
`
`20. On June 18, 2020, the state Department of Health (“DoH”) confirmed
`
`ten COVID-19 cases at Hale Nani Rehabilitation and Nursing Center in Honolulu.
`
`21. On September 18, 2020, Governor Ige confirmed twelve deaths due
`
`to COVID-19 at the Yukio Okutsu State Veterans Home in Hilo.
`
`22. These startling events prompted PMG to provide COVID-19 testing to
`
`nursing home residents and staff.
`
`23. The Centers for Disease Control and Prevention (“CDC”) and the
`
`Centers for Medicare and Medicaid Services (“CMS”) differentiate between
`
`“surveillance testing” and “outbreak testing” for COVID-19.
`
`24. According to the CDC, “public health surveillance is the ongoing,
`
`systematic collection, analysis, and interpretation of health-related data
`
`essential to the planning, implementation, and evaluation of public health
`
`practice.”
`
`25. According to the CDC, “because of the risk of unrecognized
`
`infection among residents, a single new case of SARS-CoV-2 infection in any
`
`HCP or a nursing home-onset SARS-CoV-2 infection in a resident should be
`
`evaluated as a potential outbreak. [The nursing home should] consider
`
`increasing monitoring of all residents from daily to every shift, to more rapidly
`
`detect those with new symptoms.” The CMS adds that “upon identification of a
`
`
`
`
`
`5
`
`
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`single new case of COVID-19 infection in any staff or residents, testing should
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`begin immediately”.
`
`26. During the height of the COVID-19 pandemic in Hawai‘i between
`
`July 2020 and September 2020, PMG contracted with local nursing and
`
`rehabilitation homes to provide COVID-19 testing services to their employees and
`
`patients. Some of the residents and staff were insured by UHA.
`
`27. Additionally, the Hawai‘i Emergency Management Agency (“HiEMA”)
`
`would call upon PMG to administer COVID-19 tests to companies and
`
`organizations in response to an outbreak after a referral from the DoH. PMG was
`
`able to administer the tests within 24-48 hours, if not sooner.
`
`28.
`
`In all cases, upon screening, if a patient indicated that he or she was
`
`exposed to COVID-19 or have positive symptoms, PMG treated the test as an
`
`exposure test and billed the patient’s health insurer as a diagnostic test.
`
`Otherwise, if the patient indicated that the contracted nursing home or company
`
`sent him or her for a test and the patient had no symptoms or exposure, PMG
`
`treated the test as a surveillance test and billed the company’s group insurance
`
`account.
`
`29. Plaintiffs also instituted regular COVID-19 testing for their
`
`employees once their employees began getting exposed to suspected and
`
`confirmed COVID-19 carriers in the course of administering the COVID-19 tests
`
`at the nursing homes and other similarly concentrated spaces.
`
`30. Depending on the level of service and Current Procedural
`
`Terminology (“CPT”) code, Plaintiffs would bill between $35.00 and $295.29 for
`
`
`
`6
`
`
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`Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 8 of 25 PageID #: 18
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`each COVID-19 test. Each test given to employees or residents of a group
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`account for surveillance purposes costs approximately $100. The majority of this
`
`cost goes to Clinical Labs of Hawai‘i for processing costs. PMG is paid a $15
`
`collection fee.
`
`
`
`The Federal Acts Mandate Payment for COVID-19 Testing
`
`31. The Families First Coronavirus Response Act (“FFCRA”) was enacted
`
`on March 18, 2020. Section 6001 of the FFCRA generally requires group health
`
`plans and health insurance issuers offering group or individual health
`
`insurance coverage to provide benefits for certain items and services related to
`
`diagnostic testing for the detection of SARS-CoV-2 or the diagnosis of COVID-
`
`19 when those items or services are furnished on or after March 18, 2020.
`
`Under the FFCRA, plans and issuers must provide this coverage without
`
`imposing any cost-sharing requirements (including deductibles, copayments,
`
`and coinsurance) or prior authorization or other medical management
`
`requirements.
`
`32. The Coronavirus Aid, Relief, and Economic Security Act (“CARES
`
`Act”) was enacted on March 27, 2020. Section 3201 of the CARES Act
`
`amended section 6001 of the FFCRA to include a broader range of diagnostic
`
`items and services that plans and issuers must cover without any cost-sharing
`
`requirements or prior authorization or other medical management
`
`requirements. Additionally, section 3202 of the CARES Act generally requires
`
`plans and issuers providing coverage for these items and services to reimburse
`
`any provider of COVID-19 diagnostic testing an amount that equals the
`
`
`
`7
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`
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`Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 9 of 25 PageID #: 19
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`negotiated rate or, if the plan or issuer does not have a negotiated rate with the
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`provider, the cash price for such service that is listed by the provider on a
`
`public website.
`
`33. The federal Departments of Labor, Health and Human Services,
`
`and Treasury (the “Departments”) jointly issued a series of Frequently Asked
`
`Questions guidance documents (“FAQs”) regarding the FFCRA and the CARES
`
`Act. Section 6001(c) of the FFCRA authorizes the Departments to implement
`
`the requirements of section 6001 of the FFCRA, as amended by section 3201 of
`
`the CARES Act, through sub-regulatory guidance, program instruction, or
`
`otherwise.
`
`34. According to the Departments, under the FFCRA and the CARES
`
`Act, private insurers such as UHA are required to fully pay claims for “COVID-
`
`19 diagnostic testing of asymptomatic individuals when the purpose of the
`
`testing is for individualized diagnosis or treatment of COVID-19.”
`
`35. FAQ 42, dated April 11, 2020, provides that, “Plans and issuers
`
`must cover items and services furnished to an individual during visits that
`
`result in an order for, or administration of, a COVID-19 diagnostic test, but
`
`only to the extent that the items or services relate to the furnishing or
`
`administration of the test or to the evaluation of such individual for purposes
`
`of determining the need of the individual for the product, as determined by the
`
`individual’s attending healthcare provider.”
`
`36. Moreover, FAQ 42 provides that, “Section 6001(a) of the FFCRA
`
`provides that plans and issuers shall not impose any cost-sharing
`
`
`
`8
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`requirements (including deductibles, copayments, and coinsurance), prior
`
`authorization requirements, or other medical management requirements for
`
`these items and services. These items and services must be covered without
`
`cost sharing when medically appropriate for the individual, as determined by
`
`the individual’s attending healthcare provider in accordance with accepted
`
`standards of current medical practice.”
`
`37. Further, FAQ 42 states, “The Departments construe the term ‘visit’
`
`in section 6001(a)(2) of the FFCRA broadly to include both traditional and non-
`
`traditional care settings in which a COVID-19 diagnostic test described in
`
`section 6001(a)(1) of the FFCRA is ordered or administered, including COVID-
`
`19 drive-through screening and testing sites where licensed healthcare
`
`providers are administering COVID-19 diagnostic testing. Therefore, the items
`
`and services described in section 6001(a) of the FFCRA, as amended by section
`
`3201 of the CARES Act, must be covered when furnished in non-traditional
`
`settings, as well as when provided in traditional settings.”
`
`38. FAQ 42 states that, “the Centers for Disease Control and
`
`Prevention (CDC) advises that clinicians should use their judgment to
`
`determine if a patient has signs and symptoms compatible with COVID-19 and
`
`whether the patient should be tested.”
`
`39. FAQ 43, dated June 23, 2020, states that, “a health care provider
`
`need not be ‘directly’ responsible for providing care to the patient to be
`
`considered an attending provider, as long as the provider makes an
`
`individualized clinical assessment to determine whether the test is medically
`
`
`
`9
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`21
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`appropriate for the individual in accordance with current accepted standards of
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`medical practice. Therefore, an attending provider for purposes of section 6001
`
`of the FFCRA is an individual who is licensed (or otherwise authorized) under
`
`applicable law, who is acting within the scope of the provider’s license (or
`
`authorization), and who is responsible for providing care to the patient.”
`
`40. FAQ 43 further provides that, “Clinical decisions about testing are
`
`made by the individual’s attending health care provider and may include
`
`testing of individuals with signs or symptoms compatible with COVID-19, as
`
`well as asymptomatic individuals with known or suspected recent exposure to
`
`SARS-CoV-2, that is determined to be medically appropriate by the individual’s
`
`health care provider, consulting CDC guidelines as appropriate.”
`
`41. FAQ 43 also states that, “The coverage required under section
`
`6001 of the FFCRA for items and services described in section 6001(a) of the
`
`FFCRA is not limited with respect to the number of diagnostic tests for an
`
`individual, provided that the tests are diagnostic and medically appropriate for
`
`the individual, as determined by an attending health care provider in
`
`accordance with current accepted standards of medical practice.”
`
`42. FAQ 44, dated February 26, 2021, states, “Plans and issuers must
`
`provide coverage without imposing any cost-sharing requirements (including
`
`deductibles, copayments, and coinsurance), prior authorization, or other
`
`medical management requirements for COVID-19 diagnostic testing of
`
`asymptomatic individuals when the purpose of the testing is for individualized
`
`diagnosis or treatment of COVID-19. However, plans and issuers are not
`
`
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`10
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`required to provide coverage of testing such as for public health surveillance or
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`employment purposes.”
`
`43. FAQ 44 also states, “The FFCRA prohibits plans and issuers from
`
`imposing medical management, including specific medical screening criteria,
`
`on coverage of COVID-19 diagnostic testing. Plans and issuers cannot require
`
`the presence of symptoms or a recent known or suspected exposure, or
`
`otherwise impose medical screening criteria on coverage of tests. When an
`
`individual seeks and receives a COVID-19 diagnostic test from a licensed or
`
`authorized health care provider, or when a licensed or authorized health care
`
`provider refers an individual for a COVID-19 diagnostic test, plans and issuers
`
`generally must assume that the receipt of the test reflects an ‘individualized
`
`clinical assessment’ and the test should be covered without cost sharing, prior
`
`authorization, or other medical management requirements.”
`
`44. FAQ 44 further states, “any health care provider acting within the
`
`scope of their license or authorization can make an individualized clinical
`
`assessment regarding COVID-19 diagnostic testing. If an individual seeks and
`
`receives a COVID-19 diagnostic test from a licensed or authorized provider,
`
`including from a state- or locality-administered site, a ‘drive-through’ site,
`
`and/or a site that does not require appointments, plans and issuers generally
`
`must assume that the receipt of the test reflects an ‘individualized clinical
`
`assessment.’ ”
`
`45. Upon information and belief, both HMSA and Kaiser have fully
`
`paid claims for COVID-19 diagnostic testing.
`
`
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`11
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`46. UHA’s COVID-19 Diagnostic Testing Policy (“UHA Testing Policy”)
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`provides that UHA “will cover COVID-19 Diagnostic Testing when the test is, at
`
`the time of service, congruent with updated CDC guidelines.” The Policy
`
`further states, “UHA follows both federal and state guidelines and mandates.”
`
`47. The UHA Testing Policy further states the following criteria or
`
`guidelines:
`
`A. CDC recommends the following individuals should obtain COVID-19
`diagnostic testing:
`
`
`1. People who have symptoms of COVID-19
`
`
`
`
`
`
`
`a. People who are fully vaccinated with the COVID-19 vaccine
`should be evaluated by their healthcare provider and tested
`for COVID-19 if indicated.
`
`2. People without symptoms of COVID-19
`
`a. People not fully vaccinated with the COVID-19 vaccine who
`have had close contact with someone with confirmed COVID-
`19 (including a person who does not have symptoms within
`10 days of their positive test result).
`
`
`b. People not fully vaccinated with the COVID-19 vaccine who
`have taken part in activities that put them at higher risk for
`COVID-19, such as attending
`large social or mass
`gatherings, or being in crowded indoor settings.
`
`
`c. People not fully vaccinated with the COVID-19 vaccine who
`are prioritized for expanded community screening for COVID-
`19.
`
`
`d. People not fully vaccinated with the COVID-19 vaccine who
`have been asked or referred to get tested by their school,
`workplace, healthcare provider, state, tribal, local, or
`territorial health department.
`
`
`
`48. UHA has the following Frequently Asked Questions (“FAQ”) on its
`
`website:
`
`
`
`12
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`Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 14 of 25 PageID #:
`24
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`Q1. What if I have been in close contact with a COVID-19
`infected person?
`
`If you have been in close contact with someone with suspected or
`confirmed COVID-19, whether you are fully vaccinated or not, you
`should first be evaluated by your healthcare provider and be tested
`for COVID-19 if indicated to do so.
`
`Q2. Will UHA cover COVID-19 testing if I currently show no
`COVID-19 symptoms (am asymptomatic)?
`
`UHA will cover COVID-19 diagnostic testing when the test is, at the
`time of service, in accordance with updated CDC guidelines.
`Coverage is subject to change contingent upon evolving CDC
`guidelines. UHA will not cover non-diagnostic testing.
`
`Q3. Under what circumstances should I obtain a COVID-19 test?
`
`The CDC recommends the following individuals should obtain
`COVID-19 diagnostic testing:
`
`1. People who have symptoms of COVID-19 who are fully
`vaccinated with the COVID-19 vaccine should first be
`evaluated by their healthcare provider and be tested for
`COVID-19 if indicated to do so.
`2. People without symptoms of COVID-19 who are not fully
`vaccinated with the COVID-19 vaccine:
`o who have been in close contact with someone with suspected
`or confirmed COVID-19, should first be evaluated by their
`healthcare provider and be tested for COVID-19 if indicated to
`do so.
`o who have taken part in activities that put them at higher risk
`for COVID-19, such as travel, attending large social or mass
`gatherings, or being in crowded indoor settings.
`o who have been asked or referred to get tested by their school,
`workplace, healthcare provider, state, tribal,
`local, or
`territorial health department.
`
`…
`
`Q6. Is COVID-19 testing covered by UHA?
`
`Yes, UHA covers 100% for appropriate, medically necessary testing for
`COVID-19. The guidelines for testing are provided by the CDC and HDOH.
`Current CDC guidelines can be found here.
`
`
`
`13
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`25
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`UHA Denies the COVID-19 Diagnostic Testing Claims
`49. Plaintiffs began submitting claims to UHA for the COVID-19
`
`diagnostic testing that they performed in March 2020.
`
`50. On or about October 30, 2020, PMG received a letter, dated
`
`October 28, 2020, from UHA indicating that a large number of COVID-19
`
`testing claims did not meet UHA’s payment criteria. Because of this, UHA
`
`began requiring “clinical notes pertinent to every claim for all services.”
`
`Additionally, the letter stated that “employers who choose to have associates
`
`tested randomly or as a condition of employment must understand that it will
`
`fall outside of [UHA’s] coverage.”
`
`51. Geralyn Agliam, Plaintiffs’ billing manager, was assigned to
`
`investigate UHA’s indicated claims. Over the course of the following year,
`
`Plaintiffs’ billing staff had attempted to resolve with UHA these billing issues.
`
`52. On or about March 2, 2021, Geralyn Agliam, Windward Urgent
`
`Care Services, LLC’s Billing Director, spoke with UHA’s Clinical Care Manager,
`
`Erin Chow. During this conversation, Ms. Agliam was informed that employees
`
`who received a COVID-19 test must file an Employers Report of Industrial
`
`Injury claim (“WC-1”). Only if the workers’ compensation claim is denied, then
`
`UHA would consider payment.
`
`53.
`
`In letters dated July 8, 2021, UHA informed each of the Plaintiffs
`
`that UHA was engaging in an “Assignment/Allocation of Payment
`
`Responsibility Audit regarding workplace Covid-19 nucleic acid amplification
`
`testing” relating to 1446 claims Plaintiffs had submitted to UHA for their
`
`
`
`14
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`
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`26
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`covered employees. The letters stated, “Because you are both a participating
`
`provider and an important UHA insured with 73 covered members, it is
`
`incumbent upon us to understand whether some or many of the testing claims
`
`originating from your employees are workplace related.”
`
`54.
`
`In response to the July 8, 2021 letters, Plaintiffs provided extensive
`
`verification documentation to UHA to substantiate that the claims were for
`
`COVID-19 diagnostic testing of asymptomatic employees when the purpose of
`
`the testing was for individualized diagnosis of COVID-19. When UHA
`
`complained that the electronic documentation that Plaintiffs submitted to
`
`substantiate the claims was not received or was insufficient, Plaintiffs’ staff
`
`hand delivered stacks of paper claims and other documentation to UHA’s
`
`offices.
`
`55. Several of the employees required multiple tests because of the
`
`repeated exposure of Plaintiffs’ employees to concentrated settings, such as the
`
`nursing homes and long-term care facilities, where Plaintiffs’ employees had
`
`performed COVID-19 diagnostic testing for residents and staff and were
`
`exposed to COVID-19 positive individuals.
`
`56. Contrary to UHA’s obligations under the FFCRA and other relevant
`
`law, UHA concluded that none of the 1446 claims submitted by Plaintiffs on
`
`behalf of their employees for COVID-19 diagnostic testing was payable.
`
`57.
`
`In addition, UHA had rejected payment of hundreds of COVID-19
`
`diagnostic testing claims that UHA had submitted for payment to UHA on
`
`
`
`
`
`15
`
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`Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 17 of 25 PageID #:
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`behalf of the companies and organizations whose employees were tested by
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`Plaintiffs.
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`58.
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`In a letter dated October 22, 2020 to George McPheeters, MD, the
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`Chief Medical Officer for UHA, Dr. Miscovich wrote to object to UHA’s rejection
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`of the hundreds of COVID-19 diagnostic testing claims and to explain the
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`process and procedures for surveillance and exposure (diagnostic) COVID-19
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`testing. Dr. McPheeters acknowledged receipt of Dr. Miscovich’s letter and
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`forwarded the letter to Grace Vo, UHA’s Director of Medical Informatics,
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`Pharmaceuticals & Data.
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`59. On October 29, 2021, Rene Pagaoa, PMG’s Vice President, had a
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`phone conversation with Grace Vo. She reiterated to Ms. Vo that PMG bills the
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`private insurance for COVID-19 testing of patients with exposure and
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`symptoms. On this call, Ms. Pagaoa read FFCRA Section 6001 to Ms. Vo.
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`60. Ms. Pagaoa further explained that PMG has private contracts with
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`other employers to provide surveillance testing and will also conduct exposure
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`testing in response to a request from HiEMA.
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`61. On November 2, 2021, Dr. Miscovich sent a follow-up email to Dr.
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`McPheeters and Ms. Vo. Dr. Miscovich explained that PMG is usually called by
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`HiEMA or the director of nursing or the CEO of a nursing home in response to
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`an outbreak after a referral from the DoH to administer COVID-19 tests.
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`62. On November 4, 2021, Dr. Miscovich had a phone conversation
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`with Howard Lee, the President and CEO of UHA. This purpose of the call was
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`16
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`Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 18 of 25 PageID #:
`28
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`to discuss the communications between the PMG staffs’ follow-up with UHA
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`regarding the claims for visits with patients with exposure to COVID-19.
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`63. Mr. Lee informed Dr. Miscovich that UHA will not pay for claims
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`relating to staff or residents with immediate exposure to COVID-19. The
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`discussion was primarily referring to a massive, critical outbreak at Care
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`Center of Honolulu where PMG was summoned by HiEMA, the DoH and the
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`facility to see if PMG was available to test a major outbreak. PMG had
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`responded within 12 hours and used CDC and CMS guidelines related to
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`testing in a nursing home when a COVID-19 outbreak occurs.
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`64. During the phone conversation, Mr. Lee told Dr. Miscovich that
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`UHA disagreed with PMG and that UHA believes that each facility should be
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`responsible for the cost of COVID-19 testing. Mr. Lee told Dr. Miscovich to bill
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`the nursing homes for PMG’s collection fee.
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`65. Dr. Miscovich told Mr. Lee that PMG bills any organization when it
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`is surveillance testing and not outbreak testing. The supporting documents
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`were provided to Ms. Vo by Ms. Pagaoa.
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`66. Mr. Lee continued to say that he felt he had no choice but to send
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`Dr. Miscovich a denial letter and to make Dr. Miscovich and PMG “non-par”
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`(i.e., terminate Plaintiffs as participating providers in UHA’s network) if PMG
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`did not drop this issue since it would cost UHA $800,000.00.
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`67. On November 4, 2021, Dr. Miscovich sent an email to Dr.
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`McPheeters explaining once again how the Centers for Disease Control and
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`17
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`Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 19 of 25 PageID #:
`29
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`Prevention (“CDC”) and the Centers for Medicare and Medicaid Services (“CMS”)
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`differentiate between “surveillance testing” and “outbreak testing”.
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`68.
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`In all the communications between PMG and UHA, UHA has only
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`provided broad bases for its denials by citing the Occupational Safety and
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`Health Administration (“OSHA”) COVID-19 Emergency Temporary Standard
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`(“ETS”) and the CDC, with no specifications, but only incorrect inferences.
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`69. On November 12, 2021, UHA’s CEO, Howard Lee, sent Dr.
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`Miscovich a letter advising him that UHA was denying $79,708.13 in COVID-19
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`testing claims. The claims were for various care homes ($38,602.54), other
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`UHA employer groups ($30,255.24), and Plaintiffs’ own covered employees
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`($10,850.35). Mr. Lee justified denying these claims as “due to workplace
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`testing in 2020 and 2021.” Mr. Lee also remarked that “workplace testing has
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`resulted in significant claims paid to labs in 2020 and 2021,” and that UHA
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`was in the process of discussing those claims with the labs.
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`70. On November 15, 2021, Dr. Miscovich wrote to Mr. Lee to object to
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`UHA’s denial of the claims in Mr. Lee’s November 12, 2021 letter, stating that
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`UHA had failed to address the claims that had been billed appropriately as
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`instructed by the Federal guidelines and had been substantiated by digital and
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`hard copies of records provided by Plaintiffs to UHA.
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`71. As of December 21, 2021, Plaintiffs had submitted to UHA
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`approximately 8,019 claims for COVID-19 testing totaling approximately
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`$536,700.
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`18
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`Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 20 of 25 PageID #:
`30
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`UHA Retaliates by Terminating PMG’s Participating Provider Status
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`72. On December 1, 2021, UHA sent letters to each of the Plaintiffs
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`noticing each Plaintiff “that effective February 1, 2022, [it] will no longer be a
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`Participating Provider with UHA.” UHA carried out its retaliation threat that
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`Mr. Lee had warned Dr. Miscovich about in their November 4 conversation,
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`proving that the terminations were directly related to Plaintiffs’ complaints
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`about UHA’s refusal to pay legitimate COVID-19 diagnostic testing claims.
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`COUNT I: BAD FAITH DENIAL OF CLAIMS
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`73. Plaintiffs repeat and re-allege each of the foregoing paragraphs with
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`the same force and effect as if set forth fully herein.
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`74. PMG entered into a contractual relationship with UHA to be a
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`participating provider in UHA’s network of providers to offer health care services
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`to UHA’s member subscribers.
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`75. PMG also entered into a contractual relationship with UHA for UHA
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`to provide group medical insurance to PMG’s employees and covered family
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`members.
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`76. PMG fully performed under the terms of its participating provider
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`contractual relationship with UHA by providing covered services to UHA
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`members as required by the contractual relationship with UHA. PMG fully
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`performed under the terms of its group insurance contractual relationship with
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`UHA by timely paying premiums due thereunder and timely submitting clean
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`covered claims for payment by UHA.
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`19
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`Case 1:22-cv-00033-DKW-WRP Document 1-2 Filed 01/21/22 Page 21 of 25 PageID #:
`31
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`77. Under those contractual relations, PMG, on behalf of itself and as
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`intended beneficiary and/or assignee of UHA member subscribers, submitted
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`insurance claims for diagnostic COVID-19 testing for payment by UHA on behalf
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`of UHA’s insured members.
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`78. By entering into its contractual relationship with PMG, UHA also
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`made an express and/or implied promise that it would deal with PMG fairly and
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`in good faith.
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`79. UHA is obligated under its contracts, the FFCRA, the CARES Act,
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`and other relevant law to fully pay claims for diagnostic COVID-19 testing.
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`80. UHA has breached such obligations by failing to pay for diagnostic
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`COVID-19 testing claims submitted by PMG.
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`81. As a direct and proximate result, PMG has been harmed by UHA’s
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`conduct and has suffered damages in an amount to be determined at trial.
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`82.
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`In unlawfully denying the COVID-19 testing claims
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