Time running out for HPMR contract with Fund

Unless the NMI Retirement Fund offers an extension to its contract soon, Hawaii Pacific Medical Referral will have no choice but to terminate its agreement with health providers as third party administrator for the government’s health insurance program.

This would result in members of the Group Health Insurance Program having to directly shoulder their medical expenses, without any discounts.

HPMR’s contract with the Fund expires on Feb 28.

“They [Fund] have not extended our contract. I’ve been trying ever since then to get them to come to terms and find some language that would extend the contract but that has not happened. Because we are under 30 days now from the termination of the contract, I have to start closing down operations,” said HPMR vice president Thomas G. Cannon in a telephone interview from Hawaii yesterday.

In fact, HPMR has already terminated its arrangement with Philippine hospitals, Cannon said.

HPMR had a contract with StayWell to provide services for CNMI patients referred to Manila hospitals.

“I just want to be clear that it’s not our fault. It’s not StayWell’s fault. It’s just that the Fund has not extended our contract,” he said.

Cannon said that HPMR has written the Fund informing it that all providers would be notified about the termination of services by Feb. 15 if the Fund decides not to extend HPMR’s contract.

“We informed them that any claims for services that we don’t pay would have to be referred back to GHLI to get paid,” he said.

Without a third party administrator, he said, the Fund would lose “all the discounts they are getting from the providers and the access to the discount network.”

“All of that [discounts] will go away when we’re gone. We’re saving them quite a bit of money,” he said.

Fund administrator Karl T. Reyes said yesterday that the Fund board has agreed to extend HPMR’s contract, but he conceded that no contract has actually been signed. He said the board will discuss it in this week’s meeting.

“We are extending their contract. We understand that HPMR wants to see it in writing,” he said.

As for StayWell’s services in the Philippines, he said, “It’s not between us. It’s between StayWell and HPMR,” said Reyes.

The Fund official said that the board is fully aware about the disadvantages should HPMR’s contract is terminated.

He expressed confidence that the matter will be resolved before Feb. 15 or before HPMR informs all its service providers about its contract’s expiration.

Cannon said that, as of Jan. 31, 2005, the Fund needs to settle some $482,000 that is owed to all off-island providers. These are claims processed representing charges totaling about $700,000. For on-island providers, the Fund’s GHLI needs to pay $742,000, representing nearly $1 million in charges.

For the month of January, Cannon said the GHLI had only given HPMR $500,000.

HPMR earlier reported that it saved the CNMI government over $8 million in discounts from Aug. 1, 2001 to July 31, 2004. Its records showed that during the period, HPMR recorded total charges of $53.6 million. Of this, $39.3 had been processed and paid out.

The remaining $14.3 million has not been processed and remains unpaid.

Of the $39.3 million, the Fund had only actually paid $14.1 million—a 64 percent savings on the total amount.

Savings were realized by deducting $12.5 million in ineligible charges, $8.3 million in HPMR discounts, $2.7 million for coordination of benefits, and $1.7 million in co-pay and co-insurer shares.

Of the total charges, $29.8 million included off-island claims and $9.5 million local claims. Of the off-island claims, $7.4 million was actually paid by the Fund. For on-island claims, the Fund paid out $6.7 million.