The state Department of Human Services can still compel all 165,000 people in Quest, the state's medical insurance program for the poor, to actively choose a health plan this year, but only 5 percent would be potentially reassigned to a new plan if they failed to respond under a bill agreed to yesterday by House and Senate conferees.

The bill also would give people who are reassigned the chance to change health plans for any reason within 90 days and guarantee the department would cover treatment for those who mistakenly show up at the wrong provider.

The bill, which now goes to the House and Senate for final approval next week, was hastily drafted by state lawmakers to ensure there is no disruption in treatment when the department conducts its enrollment plan later this year. The department, trying to promote competition in the Quest market, has planned to ask all patients to choose a health plan rather than being automatically enrolled in their existing plan.

Lawmakers described the bill as a compromise, since some had wanted to totally block the department's enrollment plan, but department director Lillian Koller said it ruins the enrollment strategy. Koller would not say last night whether she would ask Gov. Linda Lingle to veto the bill if it is approved next week.

"It absolutely quashes competition, and it quashes our opportunity to have more services for our clients," Koller said.

The Hawai'i Medical Service Association, Kaiser Permanente and AlohaCare are Quest providers, but Summerlin Life & Health and other companies may be interested in entering the market. During an initial 60-day open enrollment period, all of the providers would be able to market their services to Quest patients, but the people who do not sign up for a plan would be reassigned based on an algorithm that favors the lowest bidder.

PATIENT REASSIGNMENTS

The department estimates that about 5 percent of Quest patients — or 8,250 people — would be reassigned, although AlohaCare maintains it would be more than three times higher. Under the bill, after the 5 percent limit is reached, people who would have been reassigned would instead keep their existing plan.

"It will allow for the marketing to occur so that they will learn about all the different plans that are available to them," state Sen. Suzanne Chun Oakland, D-13th (Kalihi, Nu'uanu), said of the bill. "We're hopeful that they will enroll with whatever plan they want to, but if for some reason they don't enroll within that 60-day period, that at least most will go back to the plan that they had before."

AlohaCare, which was founded by community health centers, was the main opponent to the department's enrollment plan, although Kaiser Permanente also raised objections to lawmakers. AlohaCare has been the lowest bidder for Quest patients.

"The motive we feel behind this bill is to prevent competition, pure and simple," said Eleu Kane, who works in government relations and sales for Summerlin. "It basically just comes down to AlohaCare not wanting to lose their market share."

Kane said Summerlin intends to bid for Quest patients and, while he would not detail the number of patients the company needs to be successful, he said the 5 percent that could be reassigned to the lowest bidder would probably be too low.

The agreement was reached after four days of public discussion between conferees and lengthy private talks between lawmakers, the department and healthcare providers that went on right up until the vote last night.

AlohaCare had used a lobbyist and public-relations firm to fight the enrollment plan at the Legislature soon after the department released it in March. Koller pushed back over the past week with an opinion column in The Advertiser and a memo to lawmakers that accused AlohaCare of trying to protect its market share and profiting greatly from being the lowest bidder for patients after The Queen's Medical Center and Kapiolani Health left the Quest market in 2002.

'SAFETY NET'

Koller met privately on Wednesday with three House conferees at the state Capitol and warned that Lingle would veto the bill if it blocked the department's enrollment plan. Democrats control the Legislature and can override the Republican governor's vetoes, but, as of now, there are no plans for lawmakers to return for a special veto session after the Legislature adjourns Thursday.

A second private meeting that involved Koller, lawmakers and representatives from AlohaCare, HMSA, Kaiser and Summerlin lasted late into Thursday evening and produced many of the terms in the agreement. Koller had left the meeting early for a work trip to Maui but did not support the terms, and neither did Summerlin.

Some lawmakers said AlohaCare executives and their lobbyists were clever by turning the department's estimate that only 5 percent of Quest patients would be reassigned into a cap, which left the department in the position of either arguing that its estimate was inaccurate or that the number of patients choosing to change plans on their own would not be enough for a new healthcare provider to survive in the Quest market.

"We're trying to ensure the greatest protection for the providers that are running the services and the Quest beneficiaries. Hopefully, this will help accomplish that," said John McComas, the chief executive officer of AlohaCare. "I mean, in effect, these are the numbers that Lillian Koller said would be auto-assigned, so I guess we have to trust that."

Others interested in the enrollment plan said the department's guarantees would minimize patient disruption even if Lingle vetoes the bill and the department's own plan takes effect. The political pressure at the Capitol led the department to pull its original enrollment plan last Friday and promise in writing to add the patient safeguards Koller now describes as "a bullet-proof safety net."

"We worked hard to make sure we had the Department of Human Services on record that there would be no disruption of the patient-physician relationship, at all," said state Rep. Josh Green, D-6th (Kailua, Keauhou), a Big Island doctor. "We have that in black and white."

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.