Fund’s debt with health providers may shoot up

Posted on Apr 10 2006

The NMI Retirement Fund’s debt with health providers may increase three-fold if it is not settled before June 30, when the Fund’s contract with third party administrator Hawaii Pacific Medical Referral expires.

Fund administrator Karl T. Reyes said yesterday that, excluding the $7 million debt with the Commonwealth Health Center, the Group Health Insurance program owes HPMR $2.7 million for billings charged by health providers—hospitals and health centers—in Guam, Hawaii, and the U.S mainland.

The $2.7 million is the discounted amount obtained through HPMR.

If this is not paid before the HPMR contract’s expiration on June 30, authorities fear that the Fund may be charged the original amount.

Reyes said HPMR itself expressed such apprehension. He said that, without HPMR’s discounts, the $2.7 million might go up to $7 million.

“That’s the concern of HPMR so they want us to know it,” said Reyes.

He said the Fund simply lacks the needed funds to settle the debt right now.

“Where do we get the money to pay it?” he asked.

He said the Fund is researching on the legalities of the matter, adding that the Fund wants to pay the HPMR-discounted amount, not the original charges.

The Fund earlier said it is current in its monthly payments with HPMR but not with health providers.

He said the Fund is able to pay $500,000 every month to HPMR, including $93,000 in administrative service fee and some $230,000 for Rx America and PHI Pharmacy for medicines.

Reyes said the total debt with health providers through HPMR totaled $9 million, including $7 million with CHC, as of March this year.

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