HMSA to handle
insurance work
for Kapiolani

Layoffs could result when
the state's top health provider
takes over on Nov. 1

Star-Bulletin staff

The state's largest health insurance provider is taking over the administrative operations of Kapiolani Health's health maintenance organization, a move that could result in some layoffs.

But Kapiolani Health said it hopes to minimize the impact on the 95 employees that now handle the business side of Kapiolani HealthHawaii, an HMO started in 1996.

Hawaii Medical Services Association, the largest local health insurance provider, on Nov. 1 is taking over various business functions of the HMO, including underwriting, claims processing, customer service and membership services, the two entities announced yesterday.

Kapiolani HealthHawaii will continue to provide medical services to the roughly 27,000 commercial members and 700 employer groups covered by the HMO.

Those clients will see no changes in benefits, coverage, costs or service, Kapiolani HealthHawaii said.

Pad Oda, a Kapiolani Health spokeswoman, said details of the transition still are being worked out, but the company intends to minimize the number of layoffs. Among the options being pursued: looking to transfer workers to other parts of Kapiolani Health, which runs two hospitals and other health-care operations, and helping some find work with other companies.

HMSA handled administrative functions for the HMO when it was first launched, but Kapiolani Health eventually decided to handle that itself, a move that proved unprofitable.

Kevin Hara, the HMO's president, said Kapiolani Health is re-establishing the partnership with HMSA because that makes sense from a business perspective.

Kapiolani's QUEST and Hawaii Public Employee Health Fund members will not be affected by the reorganization.