Failed insurance plan proves costly for doctors
By Robbie Dingeman
Advertiser Health Writer
About 700 doctors who participated in a health insurance plan that went out of business at the beginning of last year received notice last week that some of them owe thousands of dollars as their share of more than $1.8 million in losses incurred by the joint venture.
The Premier Plan was run by HMSA, Queen's Health Systems (The Queen's Medical Center) and members of the Queen's Physician Group, a nonprofit group of doctors who operate rental offices on the hospital campus.
The group's chief operating officer, Harris Nakamoto, said the insurance plan was created about six years ago and ended operation Jan. 1, 2001. At its largest, the plan included nearly 19,000 members, he said.
"It was kind of a shock" to receive the letter asking for money nearly two years after the plan folded, said Dr. Richard Lee-Ching, a plan member and primary-care physician in Hilo.
"It's been so long," Lee-Ching said. "Obviously, this is the holiday season. This is kind of distressing."
In addition, Lee-Ching said this year has been a very bad year for most physicians because of a 5 percent cut in Medicare reimbursements with another 15 percent expected to be cut over the next three years, and increases in the cost of malpractice insurance.
"We're not going to cry poverty or anything," he said, but it's a difficult year to get another bill.
Nakamoto said Queen's is offering physicians the opportunity to work off the financial obligation by doing "file reviews, educational presentations, precertification review or insurance denial reviews," but HMSA is requiring payment this month.
When the health plan was created, officials said that members would pay only $7 for office visits and most other services. The average monthly dues were $123 for an individual plan and $343 for a family plan.
Nakamoto said Queen's is owed a total of $1.5 million, and individual physician's portions range from $16.08 up to $12,000. HMSA is owed $350,300, and the highest individual tab is $2,960.
Nakamoto said the Premier Plan, which offered some of the lowest healthcare payments, was formed at a time when there was a lot of competition among health plans.
Dr. Stanley Shimoda, a gastroenterologist, who serves on the board of the Queen's Physician Group, said he owed just a few hundred dollars.
Shimoda said that members knew the bills were coming but the letters took time because the venture need to be audited and he appreciated that Queen's is offering the option of working off the debt.
"Doctors all signed on to these obligations," Shimoda said. "Now, it's time to pay up. We must honor our obligations."
Shimoda said the plan failed because people ended up using the medical services more than they were expected to when it was created.
"You calculate ahead of time how much you think these people will use the services," he said. "If they go beyond your projections, then you end up owing the plan money."
Nakamoto said he's getting about 50 calls a day from doctors, 90 percent of whom plan to work off the debt. Some, he said, "are totally irate."
Nakamoto said it is unusual to have doctor members paying out for the failed plan.
Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.
