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The Honolulu Advertiser
Posted on: Saturday, November 14, 2009

HMSA e-mail riles benefits trust fund


BY Greg Wiles
Advertiser Staff Writer

The Hawai'i Employer-Union Health Benefits Trust Fund is demanding the Hawaii Medical Service Association retract an e-mail sent to some state workers, saying parts of the message were incorrect and are complicating the EUTF's open-enrollment program under which participants choose health plans.

The e-mail appears to misrepresent the process used in choosing the new health plan's administrator and the size of a competitor's Hawai'i operations. The e-mail says HMSA may have to lay off people if it loses about 10 percent of its members to the competitor, HMA Inc.

"The e-mail contains unauthorized and inaccurate information that has caused confusion among EUTF plan participants and has negatively affected the EUTF's November open enrollment," said a letter sent recently by EUTF Administrator Jim Williams to HMSA.

"Demand is hereby made upon HMSA to retract the e-mail and advise the EUTF immediately as to what corrective action it will implement to ameliorate the crisis."

The rift has its roots in the EUTF seeking to lower costs for itself and state and county workers who rely on health insurance plans it offers. The EUTF had been offering a so-called 90/10 plan under which workers and their dependents only paid 10 percent of health care costs.

The plans were designed by an EUTF consultant and participants had their choice of plan administrators either HMSA or HMA, which is a sister company of Summerlin Life & Health Insurance Co., an HMSA competitor that entered the Hawai'i market five years ago.

HMSA had the bulk of the business under this arrangement, with HMA only administering claims and other work for about 1,300 members.

Earlier this year, the EUTF approved the offering of an 80/20 plan with lower premium costs for workers in addition to the 90/10 plan. Williams, in an interview, said the EUTF gave HMSA first choice on which plan it wanted to administer and that the nonprofit company went with the 80/20 plan.

"They indicated that if there were going to be two plans that they would prefer the 80/20," Williams said.

The 90/10 plan's administration was given to HMA, Williams said, and the changes were voted on unanimously by EUTF trustees at an August meeting. The 90/10 plan was set as the default, meaning if participants did not make a choice they would remain with the plan and have their claims administered by HMA.

The EUTF scheduled the month of November as an open-enrollment period during which participants could choose whether they wanted to stay with a 90/10 plan with higher premium costs, but lower doctor and provider co-pays than the 80/20 plan.

Several days after the August meeting, HMSA sent a letter to the EUTF trustees offering to administer both plans, along with other suggestions. In September, the trustees considered the request and turned it down.

"Mr. Rod Tam from HMSA stated at the time they chose 80/20, understanding the cost was going to be less and majority of members would end up in the 80/20 plan," notes from the minutes say.

"HMSA did not think the default was going to be the 90/10 plan."

The e-mail in question was sent by Mike Sayama, HMSA vice president of customer relations, late last month and was widely circulated at the Department of Transportation and other state departments, the EUTF said.

The e-mail, provided to The Advertiser by HMA, said HMSA was assigned administration of the 80/20 plan by the EUTF and that HMSA had thought it would also be administering the 90/10 plan as well.

The e-mail also said HMSA's participating network of physicians is at least twice as large as that of HMA. It said Summerlin, a for-profit company, will make decisions on the Mainland.

"While they have some staff in Hawai'i, the bulk of Summerlin's operations are on the Mainland. 65,000 members represent a little less than 10 percent of HMSA's membership, and if we lose this many members, it will mean layoffs at HMSA and more job losses for our community," Sayama's e-mail said.

"I can't believe that State employees wouldn't be riled about this."

HMA said the bulk of its employees are in Hawai'i and has said its provider network includes at least 95 percent of doctors in the state, including 98 percent on O'ahu. HMA said it has hired 24 people in gearing up for the EUTF contract, which could be worth millions of dollars to whoever gets the bulk of the participants.

Moreover, it also could help solidify HMA and Summerlin's position in Hawai'i. During the summer, it won the bulk of health plan members up for grabs in a Hawaii State Teachers Association self-funded plan.

HMSA spokeswoman Elisa Yadao said HMSA is not retracting Sayama's e-mail or taking other action. Other HMSA employees have sent e-mails to state workers about the open-enrollment period.

"Nothing in his e-mail is inaccurate," Yadao said.

"We have an issue here where their view of what happened and our view of what happened are divergent."

She said the insurer had participants' interests in mind when e-mails were sent, and that it was an attempt to resolve some of the confusion over the open enrollment period. Notices sent to EUTF participants are being told the 90/10 plan will be administered by HMA and says no action is needed if people want to stay with their current plan.

They are being told to fill out a form if they want to go to the 80/20 plan administered by HMSA.

Yadao said more people need to understand better what is going on, or they may find themselves in the HMA-administered plan on Jan. 1 when they want a plan administered by HMSA.

"This is an instance of where we believe we're doing the right thing," Yadao said.

She said HMA had broken rules regarding advertising before the open-enrollment period started. HMA said it believes HMSA is behind letters from legislators to the EUTF asking that the open-enrollment period be suspended because there hadn't been clear enough information distributed to participants.

Jack Borja, HMA senior vice president, said HMA would consider filing a lawsuit if that occurred. He said HMA already had spent $50,000 in advertising for the open-enrollment period.

"It seems like HMSA is making a mockery of this trustee board," Borja said.