The state will launch a new controversial managed-care program for 39,000 aged, blind and disabled Medicaid recipients on Feb. 1.

The Department of Human Services awarded last year the $1.5 billion Medicaid contract to two for-profit mainland firms - a move that riled a competing health plan and physician and patients' rights group, which unsuccessfully sued to overturn the three-year contract.

Affiliates of UnitedHealth Group Inc. of Minneapolis and Tampa, Fla.-based WellCare Health Plans Inc., which both were accused of fraud on the mainland, have each recruited more than 1,000 local health-care providers, including primary-care physicians, specialists and nursing facilities, according to Kenneth Fink, DHS' Med-QUEST Division administrator.

“;I can understand why people have concerns based on the national news that they may have heard, but if there's any wrongdoing done in other states, I certainly do not condone those practices,”; he said. “;My responsibility is to provide extremely close oversight of the contract ... and operations here in Hawaii.”;

The program has numerous reporting requirements, patient surveys and other safeguards in place, according to Fink.

“;Our role is increasingly one of oversight and our job is to ensure that all health plans adhere to our contracts and provide the high-quality health care that our clients deserve,”; he said.

Some doctors have refused to participate in the managed-care program because of lower reimbursements and a fear that changing the current fee-for-service program would result in patients having to switch doctors and potentially lose services deemed unnecessary by the new health plans.

Kevin McGill, owner of Hawaiian Orthotics and Prosthetics Enterprises in Honokaa on the Big Island, said he was offered about 10 percent less to care for his 50 to 60 Medicaid patients. The new health plans are proposing paying providers 70 percent of the 2006 Medicare fee schedule, which is lower than the cost of care, according to McGill, who sees about 350 patients a year.

“;In most cases, providing services to these members will actually be a money-losing endeavor and cost us more to provide the service than what we will get reimbursed,”; he said.

Continuity of care is a top priority for the Medicaid program, which will work with providers to ensure that is the case, Fink said, adding that he intends to review proposed reimbursements that are less than the current Medicaid fee-for-service rates, which is prohibited under the contract.

“;If I can negotiate a contract that doesn't cause me to lose money and go out of business, I would make an attempt to do so because I don't want to abandon this part of the population,”; McGill said. “;They're the most vulnerable - they're sick and they're poor.”;