HPMR to get one-year extension

In view of a failed privatization plan for group health insurance, the NMI Retirement Fund has verbally agreed to extend the contract of its third party administrator, Hawaii Pacific Medical Referral, for one year.

This agreement was reached during a negotiation last week with HPMR, which earlier proposed for an extension of its services agreement “beyond Dec. 31, 2005.”

The company’s contract, which has been extended since July 2004, is set to expire on Dec. 31.

“It’s a very, very difficult discussion because our contract expires on Dec. 31 and given the way we are right now, there’s no takers, and even if we do, we have to be mindful of the transition. We don’t want our patients to be left out in the cold because of our failure to act with a very short time period,” Fund board chair Joseph Reyes said.

Further, Reyes said that if HPMR’s service contract is not extended, the Fund fears of “rollback” on the charges.

“It would cost us an additional expenses rather than a negotiated rate which the third party has in place,” said Reyes.

The board’s decision was also triggered by the fact that HPMR would terminate its agreement with Staywell in the Philippines by Dec. 1 if the service contract would not be extended.

“We have decided to extend the HPMR contract up to 12 months,” he said.

“We’re between a rock and hard place here,” Reyes added.

He said that during the negotiation, HPMR agreed to reduce its rates, thus saving the CNMI government more funds.

HPMR earlier reported that it saved the CNMI government over $8 million (in discounts) from Aug. 1, 2001 to July 31, 2004.

Savings were realized by deducting ineligible charges, HPMR discount, coordination of benefits, and co-pay and co-insurer shares.

Meantime, Reyes said that the 12-month extension would be executed on the understanding that it would have a 90-day termination clause.

It means that if and when the Fund receives a better RFP for a third party administrator, then the Fund can give the party a 90-day termination notice.

In a meeting Friday, the board approved to re-issue two Requests for Proposals: one for a third party administrator and one for prescription drug benefit management services.

Reyes said the RFPs will be revised and be published soon.

The first issuance of RFPs expired on Nov. 16 without a single taker.

The Fund earlier said that the TPA proposal is open to HPMR.