Fund: Extend HPMR contract to Feb. 2005

The NMI Retirement Fund Board has moved to extend the contract of its third-party administrator, Hawaii Pacific Medical Referral, up to February 2005.

Fund administrator Karl T. Reyes said the board had asked HPMR to continue to provide its services until the agency has fully privatized its Group Health and Life Insurance program.

Reyes said the full privatization shall take place by March 1.

“During the transition period, we need somebody to take care of the services. It means HPMR’s services [will be retained] up to February 2005,” said Reyes.

Reyes said, though, that following legal advise, the Fund and HPMR would have to revise the contract altogether since it exceeds six months. This would mean introduction of some changes to the existing contract.

“Extending that long—over six months—is considered a new contract. If that’s the case, then we have to do some revisions,” said Reyes.

He said the revision of contract shall take place before the July 31 expiration of HPMR’s original contract.

‘We need the board approval for that,” he said.

HPMR is the third-party administrator for the health insurance aspect of the Fund’s GHLI program.

In March this year, the board decided not to renew HPMR’s contract in anticipation of the full privatization of GHLI this year. It then changed its mind and decided to extend HPMR contract up to December this year primarily due to the lack of a transition program. The board said it is prudent to keep HPMR’s services further so as not to jeopardize the program.

“The contract expires July 31 and no transition plan is in place. We don’t want to jeopardize the program and the subscribers. The subscribers are our biggest concern,” board chair Joseph Reyes had said.

He acknowledged that the transition work has not been easy as expected. “So we are very, very mindful of it. It has to be done right.”

The Fund, he said, simply has no time to put everything in order before July 31, considering that it is still seeking out proposals to put out a program criteria.

Further, Reyes said the Fund has to settle important issues such as the inclusion of retirees in the program.

He said the Fund is concerned about its negotiation with providers as to whether it could get the same or better deals than HPMR.

This came even as he noted that health insurance payments to providers are not timely. He said the Fund wants to know whether discounts would still be available if they are owed by the Department of Public Health.

Gov. Juan N. Babauta, who is pushing for the privatization of the health insurance program, favors the conversion of GHLI to a private, cafeteria-style health insurance program for government employees and retirees. The governor’s proposal would allow subscribers to choose the health insurance providers that they want.

This would become possible when the government solicits bids from private health insurance providers, in which a group of three or more would be selected.