HMSA contract disputed
By Frank Cho
Advertiser Staff Writer
State insurance regulators are investigating dozens of complaints against the Hawaii Medical Service Association by doctors and some patients over new provider contracts that some say threaten patient care.
The complaints revolve around HMSA's decision to make two changes to the company's three-year provider contract that was renewed last month with more than a thousand independent physicians around the state. The first change requires doctors to take disputes before an internal panel appointed by HMSA. The second replaces the state's arbitration act with a federal law that doctors say is less favorable to them.
Although some physicians had threatened to boycott the contract, which had to be signed by the end of January if the doctor wanted to remain a member of HMSA's network, most if not all eventually agreed to the changes.
"A lot of doctors screamed, but whatever they put in the contract, you have to sign," said Dr. Wallace Matthews, a Honolulu physician. "In Hawai'i, you have no choice. You either play ball with (HMSA) or you don't have a practice."
State insurance regulators said they are looking into the complaints, but have no specific timetable of when they expect to have a determination whether any state laws were violated by the insurer.
Cliff Cisco, an HMSA spokesman, said the contract changes were minor and that fewer than 20 physicians out of about 1,100 have not renewed. Many of the 20 doctors were either retiring or were planning to leave the state, he said.
HMSA is the state's largest provider of health insurance, covering one out of every two people in Hawai'i. It usually reimburses member doctors up to 90 percent of a covered patient's bill. But patients of doctors who did not sign the contract could be forced to pay significantly more for their healthcare unless they switch to a doctor who is part of the HMSA network.
"This is not over. The war has only just begun," said Dr. Arleen Jouxson-Meyers, a pediatrician and lawyer who heads the Hawaii Coalition for Health, a patient advocacy organization.
Meyers, a longtime critic of HMSA, said some physicians are considering launching a legal challenge to the insurer's decision to unilaterally change provider contracts.
The Wahiawa pediatrician said she eventually signed the contract, but only because if she didn't, it would have increased her patients' healthcare costs.
HMSA is being sued by another group of doctors, who allege that the nonprofit insurer has used unfair and anti-competitive reimbursement practices to harm them and hundreds of other doctors in the state.
The Hawai'i Medical Association, which said it represents 900 practicing physicians in the state, charged in its suit in August that HMSA routinely reduced or denied physician claims, sometimes using computer profiling programs, to achieve internal financial goals regardless of patient needs. A trial date has not been set in that case.
This latest dispute with some of the insurer's doctors generally applies when a physician disagrees with a decision by HMSA and goes to arbitration. Industry experts estimate that there were fewer than a dozen arbitrations last year, affecting only a small minority of cases.
"Unfortunately, this is not a case that gets doctors' blood pumping," said William Donahue, executive director of the Independent Physicians Association.
But Donahue said many physicians are concerned about the changes and worry that arbitration will no longer be an objective process.
For example, if HMSA wanted to cut the reimbursement rate for a procedure, a doctor could, under state law, seek a court order to freeze the reimbursement rate until the matter is decided. But under the federal act, HMSA could cut the rates and then drag out the proceedings, some doctors say.
"This is not nearly as favorable as the state law. Every other business person in Hawai'i gets the benefit of the state law except for doctors in a dispute with HMSA," Donahue said.
Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.
