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HMSA, state
reach accord on
physician contracts

While the insurance
commissioner has no authority
over the contracts, the state can
move to protect patients' rights

By Helen Altonn
Star-Bulletin

Four months of hearings into alleged unfair business practices by the Hawaii Medical Service Association have ended with an agreement that appears to satisfy all parties involved.

State Insurance Commissioner Wayne Metcalf, announcing the agreement between the state and Hawaii's largest health insurance carrier, commended them "for their willingness to explore issues outside of the formal hearings process."

Administrative hearings began in January on complaints by the Hawaii Coalition for Health and about 21 health providers about HMSA amendments to physician contracts. They charged patient treatment ultimately was affected by contract provisions forced on the doctors.

Metcalf said the state and HMSA expressed interest about a month ago in resolving the dispute outside of the hearing process, and the coalition voluntarily withdrew as an intervenor in the case -- the first of its kind here.

He said the discussions "proved fruitful. ... HMSA volunteered to undertake certain things, initiatives, and the state agreed that the participating provider contract between the health care plan and physicians in and of itself is not the business of insurance."

There was no evidence that patients have been denied treatment because of the contract provisions, Metcalf said.

The coalition, a patients advocacy group representing more than 1,100 members, and others filed complaints against HMSA under the 1998 state Patient Bill of Rights law.

While the law extends the Insurance Division's jurisdiction to mutual benefit societies, such as HMSA, the state and HMSA agreed the insurance commissioner generally has no authority over physician contracts.

But Metcalf said, "There are still applicable provisions under the Patient Bill of Rights where, under certain circumstances, the state can take action and can be expected to whenever a violation of the Patient Bill of Rights does occur."

Arleen Jouxson-Meyers, a pediatrician, lawyer and Coalition for Health president, said: "We made gains, very definitely. ... I would have liked to do better, but that's my personality."

Cliff Cisco, HMSA senior vice president for communications, said the carrier, which has about 2,000 participating doctors and hospitals, is happy with the outcome.

"It came to the conclusion we thought it would, but along the way we learned a lot of things about what physicians did and didn't understand about the contracts they have," he said.

As part of the agreement, he said HMSA will develop an aggressive education and information campaign for physicians. "Hopefully, this will lead to a more positive relationship with the physician community."

Most important, Jouxson-Meyers said, HMSA is going to establish a fee review committee composed entirely of practicing physicians who will make recommendations to the HMSA directors about reimbursement problems.

The fee review committee will review all major issues that have been disputed by the coalition in the hearings, she said, such as the way certain services are reimbursed and the level of reimbursement, "which has the potential to affect quality and access to care."

HMSA also agreed to delete a unilateral amendment provision in the physician contract, Jouxson-Meyers said.

That provision allowed HMSA to amend the contract at any time, in any way it wanted, and extend the contract term with 60 days' notice, she said.