OP, has she demonstraoted the incorrect position, or it was verbal instruction? Could it be that she meant something else (like keeping your wrist more neutral, as others have said), but she didn't express herself well enough for you to understand her?
If you are absolutely certain that she wants you to have "piano hands", why don't you find some links illustrating the correct hand position vs. the incorrect one, and email your instructor, telling her you were confused. Maybe she'll get the point.
Good luck with this!