The future of CNMI’s healthcare

A few years ago, when the NMI Retirement Fund sought a company to run its health insurance program, we local physicians were happy. After all, under the Group Health and Life Insurance program, which was administered by the NMIRF, payments were exceedingly slow. In healthcare, payments usually come within 45-60 days of a claim being submitted. Under GHLI it was taking six to 12 months.

When NMIRF hired HPMR to serve as the administrator of the health insurance program (the “third party administrator”), many of us expected that HPMR would pay us in a timely manner. How wrong we were. Payments slowed down to a trickle. Instead of claims getting paid in the industry standard of 45-60 days, or the GHLI standard of six to 12 months, with HPMR our payments were delayed two to three years or more. No kidding.

Decrying a lack of funds, HPMR gave clear priority to paying its off-island providers rather than the local doctors who serve our people day in and day out. Without enough money to pay everyone HPMR had to make a decision. I always advocated that, if the Fund gives the third party administrator only 70 percent of the required funds, that the third party administrator pay all providers 70 percent of their due until more funds became available. But the priority was put on the off-island providers and the local doctors got miniscule payments. The funds were drained out of our local economy. Medical practices saw increasing receivables and less cash, which directly affected their ability to bring new services and new technologies. Everyone’s healthcare was compromised.

One of the problems with the HPMR contract was that HPMR was paid differently for processing claims for on-island services versus off-island services. For every dollar that they paid out to off-island providers their contract stipulated that HPMR would get a percentage of that payment. The more they paid to Hawaii doctors, the larger their share of the cut. Services provided by on-island providers were treated differently. HPMR got paid every month, something like $9.30 per member. This is what we call a “capitated” payment plan. NMIRF paid HPMR a fixed amount per member to process the on-island claims. Whether HPMR paid any local providers or not, HPMR still got paid the same for processing the local claims.

You can see the obvious conflict. The more HPMR paid the off-island providers, the more HPMR made. Whether they paid the local doctors or not didn’t affect their payment at all. In fact, for every dollar that they “diverted” from the off-island providers to pay the local doctors meant less profit for HPMR.

I’m not suggesting that HPMR was so nefarious as to put its own profits above consideration for your local healthcare. I am suggesting that this type of arrangement has intrinsic problems and that, as NMIRF negotiates its contract with Aetna, the new third party administrator, it take care to ensure that the contract does not stifle the development and future of local health care. There are bright minds right here in our private health care sector that would happily look over the Aetna contract to find the kinds of inconsistencies that were present in the previous contract. We can see things that your off-island consultants did not see. And you wouldn’t have to pay us exorbitant consulting fees.

We will always need off-island providers. We do need the assistance of some outside entity to negotiate fair rates with all providers. And we do need to pay our off-island providers in a timely fashion so that we can continue to avail of their services. But after the contracts with the providers are negotiated, I can’t say that a third party administrator will do a better job of processing and paying those claims than GHLI did. Certainly not for our on-island doctors.

The development of healthcare in the CNMI is stifled by the uncertainties of receiving payment from the CNMI’s major insurer, NMIRF/GHLI. Any hope of strengthening healthcare here, of keeping our current providers, of bringing in new specialists who will make the CNMI home and serve its people for decades, of stimulating private practices to invest in the advanced technologies that reduce the need to go off-island, will require a commitment from our government. It’s not an extraordinary commitment. It’s a commitment to simply ensure that its third party administrator (if it chooses to have one) will pay these local practices in a reasonable time frame, and certainly no slower than it pays its off-island providers. The future of the CNMI’s healthcare depends upon it.

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David Khorram, MD is a board certified ophthalmologist and director of Marianas Eye Institute. Comments and questions are welcome. Call 235-9090 or email Excellence@MarianasEye.com. Copyright © 2006 David Khorram