State Sen. Josh Green said he donated $2,000 to two local medical charities to dispel any notion that he would give special treatment to a company that later contributed to his campaign.

Green, a Hawaii island physician and chairman of the Senate’s Health Committee, said Wednesday that he donated the money to "avoid even the appearance of conflict."

Green made the donation after a Star-Advertiser story that disclosed that he received a $2,000 contribution from Automated HealthCare Solutions eight days after writing a letter on legislative stationery urging the city to settle a six-figure billing dispute with the company.

Though Green didn’t explicitly take Automated HealthCare’s side in his Aug. 9 letter, he called the city’s settlement offer of 20 cents on the dollar unreasonable, and said the company had "graciously agreed" to accept a discounted amount. He asked that the city settle the dispute by Aug. 24.

The city is contesting bills from the Florida-based company, which assists physicians who dispense prescription drugs directly to workers’ compensation patients and bills the patients’ employers or insurers for the medication. Among other issues, the city is citing inflated pricing by Automated HealthCare.

In one example mentioned in an Oct. 29 response to Green, Managing Director Douglas Chin said the company billed the city $832.37 for a muscle relaxant that cost the physician $14.40 and that a local pharmacy sells for $57.65.

The dispute is now before the state Department of Labor and Industrial Relations, which oversees workers’ compensation matters.

Green said he understands how his letter could be perceived as taking the company’s side.

"I recognize that my letter came off that way," he said in an interview. "That was not my intent."

Green, the only physician in the Legislature, said his intent was to simply jump-start a resolution to the billing dispute. He said he was motivated by the frequent calls he gets from doctors telling him they may have to stop seeing workers’ comp patients or lay off employees because of delayed reimbursements.

Green added that he also is particularly sensitive to physician-related issues because of a doctor shortage in the state.

"If I was too prescriptive in my language, I’m sorry for that," he said.

Green said he agrees that the regulatory system needs to be revised so that the city and other public employers are not charged huge markups, compared with pharmacy prices, for physician-dispensed drugs in workers’ comp cases.

"I want to make it fair to the city and taxpayers," Green said. "Most importantly, I want it to be fair to patients."

Green said he donated the $2,000 to Aloha Medical Mission and the Kona Hospital Foundation, both of which support medical care for the indigent.

Although Green’s intervention on behalf of a private company did not violate the state’s ethics code, the Star-Advertiser story was cited during a recent Hawaii State Ethics Commission meeting to under­score staff concerns about changes made this year to the law.

Legislators passed a bill, which was signed into law in July, exempting members of state task forces from certain provisions of the ethics code.

But in what the commission calls an unintended consequence of changes to the law’s language, legislators exempted themselves completely from the fair treatment provision of the code.

That provision prohibits state employees from using their official positions to gain unfair advantages for themselves or others.

Before the law change, legislators were exempted from the fair treatment section only in performing their "legislative functions," which is narrowly focused and does not include constituent services, according to Les Kondo, the commission’s executive director.

Had the law not been changed, Kondo said, his staff would have made inquiries about Green’s intervention on behalf of a private company to determine whether to recommend that the commission open a formal investigation.

But because of the change, there was no potential code violation to look into, Kondo said.

Green said he intends to introduce a bill in the upcoming session to restore the more narrow exemption for legislators.

"Everybody should be treated equally, and it should be clear," Green said. "I hope people with more clout than me will support (the bill) so it can pass."

Kondo said the commission also is considering proposals for the upcoming session to address other concerns about the new law.

"If Sen. Green and others are supportive of these efforts, the commission appreciates the support," Kondo said.