The state Department of Human Services is rethinking how to promote competition among healthcare providers that participate in Quest, the state's medical insurance program for the poor, after complaints that its initial plan would have been too disruptive and confusing and would have led to thousands of people being unwittingly shifted to different health plans.

The department wants all 165,000 people in Quest to choose this year whether to keep their existing provider rather than, as they do now, being automatically enrolled in the same health plan. The people who do not respond could be reassigned to another provider based on an algorithm that favors the lowest bidder for Quest patients.

The Hawai'i Medical Service Association, Kaiser Permanente and AlohaCare are the three Quest providers, but the department wants to give incentives for new providers that might want to enter the Quest market, such as Nevada-based Summerlin Life & Health Insurance Co.

Lillian Koller, the department's director, said more competition between providers would give the poor more choices and a better range of healthcare services. But the department pulled its initial plan on Friday and will now ask for more public input.

Koller's decision came as AlohaCare, which has more than 50,000 patients in Quest, appeared to be getting closer to convincing the state Legislature to block the department's enrollment plan.

A state House and Senate conference committee is scheduled to meet tomorrow morning on a bill that would prevent the department from forcing Quest patients to choose unless their healthcare provider is leaving the Quest market. A nonbinding resolution with similar language has passed the Senate but it was amended by two House committees on Friday to instead urge the department to study the impact of its enrollment plan on Quest patients.

"I'm all for competition, but I'm not for medical chaos," said state Rep. Josh Green, D-6th (Kailua, Keauhou), a Big Island doctor.

But Koller said the department will take precautions to minimize any disruptions to patients and said she wished the Legislature would not intervene in the enrollment process.

AlohaCare, founded in 1994 by community health centers, has typically been the lowest bidder for Quest and could have the most to lose financially if another provider, such as Summerlin, enters the market as the low bidder.

ALOHACARE CAMPAIGN

The last time a large reshuffling of patients occurred was during the bidding process in 2002 after The Queen's Medical Center and Kapi'olani Health left the Quest market. AlohaCare picked up 14,000 of the 33,000 Queen's and Kapi'olani patients who were reassigned.

Soon after the department announced its initial plan in March, AlohaCare began a coordinated drive to influence state lawmakers and public opinion.

Bob Toyofuku, one of the state's most powerful lobbyists, got sympathetic lawmakers to amend an unrelated bill and add language that would stop the department's enrollment plan. He also helped add similar language to an unrelated resolution and persuaded lawmakers to quickly move both vehicles before legislative deadlines could expire.

AlohaCare also turned to McNeil-Wilson Communications, one of the state's top public relations firms, to develop a communications strategy, push for a favorable editorial in The Advertiser's opinion pages and reach out to news reporters. The firm also helped organize a rally opposing the department's enrollment plan scheduled for this afternoon at the state Capitol.

Such a full-court press of lobbying is often associated by open-government advocates with wealthy corporations, but it shows that people who help the poor will also use every arrow in their quiver when their interests are at stake.

State Rep. Dennis Arakaki, D-30th (Moanalua, Kalihi Valley), chairman of the House Health Committee, urged lawmakers to slow down at a hearing last week.

"I think one of the problems that we face is that it's a pretty substantial amendment and we haven't had a public hearing on it," he said.

Other lawmakers said there is no other way to stop the department's enrollment plan.

"The only way this provision will be taken out is to pass something into law," said state Sen. Suzanne Chun Oakland, D-13th (Kalihi, Nu'uanu), chairwoman of the Senate Human Services Committee.

ANTICIPATING CONFUSION

AlohaCare and other community health advocates believe the department's enrollment plan would be disruptive to a vulnerable population.

People who are frail, sick or who speak limited or no English may not understand they could be reassigned if they fail to answer the department's mailers. Patients may not learn they have been reassigned until they seek treatment and are told they belong to a different provider.

The department estimates that about 5 percent of Quest patients — about 8,250 people — could be reassigned, but AlohaCare predicts the number could be more than three times higher. AlohaCare also questions the department's plans to do the new enrollment at the same time as separate outreach to inform federal Medicaid patients they now have to show proof of citizenship to qualify for benefits.

Koller said the department is willing to make several changes to reduce disruption, including extending the enrollment period and guaranteeing that any patient who shows up at the wrong provider will receive treatment and the opportunity to get back into their old plan.

"We're working hard to make sure all our clients meet the new federal requirements and keep their healthcare coverage," Koller wrote in an opinion column for The Advertiser yesterday. "This far greater issue should be everyone's primary focus, not protecting the market share of current healthcare plans."

But AlohaCare and other opponents want the Legislature's protection while the negotiations continue.

"We believe this will cause a tremendous amount of confusion, a tremendous amount of loss, and people will fall through the cracks," said Frank Chong, AlohaCare's manager of government and community relations.

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.