The state will proceed with the start of a new managed healthcare program for Medicaid recipients on Feb. 1, though some doctors and medical service providers say they aren't going to participate.

Dr. Kenneth Fink, state Med-Quest Division Administrator, said nearly every hospital has contracted to provide the service through the program up from only two in early December. More than 2,000 physicians have signed up also to be providers.

"Implementation of the program is advancing very nicely," said Fink, speaking yesterday before the state Small Business Regulatory Review Board.

But others testifying before the board criticized the program and said they would not participate in it because they believed they would be paid less than they are now and would have to fill out too much paperwork to get paid.

"I won't participate in this," said Dr. Arlene Meyers, a WahiawŠ pediatrician who said she will have to find other doctors to care for 20 disabled patients.

The state is moving from a fee-for-service model to a managed-care model for 37,000 Medicaid clients who are either low-income elderly or have permanent disabilities as it looks for ways to increase services and improve healthcare for the group.

The program — Quest Expanded Access or QeXA — includes coordinators who will be tasked with lowering costs by improving care and decreasing hospital and nursing-home admissions.

State healthcare officials are betting that the two private, for-profit health plans they have hired to run the new program will be more efficient at running a managed care program with expanded services than the state is at operating a fee-for-service system.

But the state's efforts have been questioned, including the award of the QeXA contracts to the two for-profit insurers, WellCare Health Plan and United Health Group Inc., both of which have been accused of fraud in some states.

Questions have also been raised about the insurers possibly denying medical treatments or delaying payments.

Fink said the state is moving to an oversight role and has put in provisions requiring prompt payments to doctors. He said reimbursements have to be at least the same as what the state paid or better.

That last point was challenged by several medical providers, who said they have been offered contracts with rates that are less than what they receive now.

Kevin McGill, of Hawaiian Orthotics and Prosthetics Enterprises, said he will have to stop serving 60 people who fall under the program because he could not afford to accept the contract rates offered by the managed care companies.

"It really is going to break my heart not to service these people," said McGill, who said he would lose so much money under the new program that it would jeopardize his ability to serve 300 other people he helps annually.

Fink said he would look into reports of health plan agreements being offered to physicians, pharmacies and others with reimbursement rates that are lower than are provided currently by the state.

"I've heard that," Fink said. "I've made a request that people send the contracts to me."

The Small Business Regulatory Review Board requested that Fink report back to it on the program in the spring and said it passed a motion for review of QeXA rules relating to reimbursement.