Isle doctors criticize new HMSA contract

The issue may spur efforts to boost regulation of the health insurance industry

By Ian Lind
Star-Bulletin

The Hawaii Medical Service Association has proposed a new contract with doctors statewide that is drawing angry criticism from some physicians, spurring a new alliance between medical organizations, and may speed efforts to boost state regulation of the health insurance industry.

HMSA, the state's largest health insurer by a wide margin, mailed the new contract on Oct. 28 and doctors must sign and return it before year's end to remain among the group's "preferred providers."

"It's an outrageous contract in my opinion and that of many others," said Arleen Jouxson-Meyers, a Wahiawa pediatrician and president of the Hawaii Coalition for Health, a nonprofit advocacy group concerned with public health issues. "It's not in the public's best interest at all."

The Hawaii Federation of Physicians & Dentists, echoing similar concerns, mailed a "red alert" to members saying the contract has raised concerns "about physicians' due process rights, potential interference with clinical judgment, compensation tied to MD economic profiling, and conflicts with medical ethics as a result of the contractual revisions."

Hawaii Medical Association leaders also joined a delegation that met with Insurance Commission Rey Graulty in early November to express opposition to certain contract provisions.

Despite the flurry of meetings, none of the organizations has directly told its members to reject the contract.

"HMSA is the 700-pound gorilla in Hawaii health insurance, and physicians have no choice but to participate in the contract," Jouxson-Meyers said. "It is impossible to make a living without cooperating with HMSA."

"Everything is coming down so fast," said Malcolm Ing, an eye surgeon at Kapiolani Medical Center. "Doctors who haven't signed up by December 31 will be left off HMSA's printed roster. The pressure they are applying is intense and uncalled for, because we need to air out the issues and discuss why we would hesitate to sign a contract with these clauses."

HMSA spokesman Fred Fortin denied that "anything has come down to cement yet," although contracts have been sent out.

"It's been a back-and-forth process between HMSA and various physician advisory groups on how to develop this contract," Fortin said. "As usual, this is a process which always has some tension around it because it is a negotiation between payers and providers."

"We do bring a lot to bear on it, and make no apology for that. Our primary mission is protection of our membership, and to try to negotiate the best deal we can on behalf of HMSA members. That's what we are attempting to do in this process."

HMSA also appears to be responding to criticisms raised by the National Committee for Quality Assurance, which last year denied accreditation to HMSA's health maintenance organization. The committee rated HMSA below average on its ongoing efforts to improve the quality of care and service, its review of physician qualifications, and its promotion of preventive care.

The proposed contract introduces a new system for investigating doctors' credentials and adds new procedures for evaluating doctors, procedures that critics say are poorly designed and overly restrictive.

"Some new clauses in this contract are totally offensive to the doctor-patient relationship and to us being advocates for our patients," Ing said. "HMSA advertises their plan as a way to maintain a private practice and avoid the compromises some people suggest are part of HMOs, yet some parts of this contract are as offensive and as restrictive as any HMO."

Graulty said his office is reviewing the matter after meeting with the medical delegation.

"I haven't made any judgment calls yet, but if what they say is true (about the HMSA contract), there will be an impact on the delivery of health care in Hawaii," Graulty said. "Anything that causes a reduction of quality of care available to patients is a concern."

Graulty said HMSA, which is a nonprofit group known as a mutual benefit society, is exempt under current state law from most of the regulations that apply to for-profit insurance companies.

Graulty will be asking the Legislature to give his office more authority over mutual benefit societies, not only because of the HMSA contract dispute but also due to concerns over the financial health of the smaller organizations.

The state seized one mutual benefit society, Pacific Group Medical Association, in March 1997 after the company ran into financial and managerial problems, and Graulty said "serious solvency concerns" remain about other firms.

"Everybody thinks of hurricane, automobile, and workers compensation insurance, but health care is the fourth area that is going to be even more important for the insurance commission in the future," Graulty said.

He is also concerned about the possibility that HMSA might attempt to shift from a nonprofit to a for-profit status, as some mainland Blue Cross-Blue Shield organizations have done. But HMSA's Fortin denied any move in that direction.

"There have been a number of Blues that have converted from nonprofit to profit status based on the need to gain capital and compete with the large for-profit companies in their area," Fortin said. "That's not the situation here, and nothing of that kind is on the planning boards."