In a mistake that could prove costly for taxpayers, the state will be forced to send a third mailing to 250,000 Quest health insurance members next month because of problems with two earlier correspondences.

The Department of Human Services Med-Quest Division, which manages the Medicaid health insurance program for low-income residents in Hawaii, said Monday it will send a third mailing to Quest members regarding the choices they have for insurance carriers.

Department spokeswoman Kayla Rosenfeld would not say how much the two added mailings will cost. However, the agency has requested 130,000 new inserts from Quest health plans for the third mailing to members. A bulk mailing of that size could cost more than $32,000, according to the U.S. Postal Service website.

"I don’t know if it’s oversight, incompetence or massive error on someone’s part," said Gary Lee, a Hono­lulu-based principal with Mercer, a human resources and benefit plan consultant. "I’m befuddled. I don’t recall anything like this ever happening in recent history. It’s a waste of taxpayers’ money."

The additional expense is due to problems with this year’s Quest open enrollment, the annual period when members are allowed to change health plans. The department said Monday it canceled the open enrollment that began May 1 and was to have ended May 22.

The department sent information to 250,000 Quest members before the start of open enrollment. The problem with the first mailing was it left out Kaiser Permanente as a health plan choice on Oahu and Maui, so a second mailing was sent Wednesday.

The department then canceled the open enrollment for May altogether and rescheduled it for June 17 to 28. The agency will send out a third mailing before June 17.

The department said the open enrollment was canceled because marketing by certain undisclosed health plans was not in compliance with state contracts. In addition, a payment dispute between the Hawaii Medical Service Association and the Wai­anae Coast Comprehensive Health Center was causing confusion.

Quest members who had already selected a new insurer will have to go through the process again.

Quest has 250,000 members, but because there is often more than one member per household, the mailings number less than that.

HMSA, AlohaCare, Ohana Health Plan and UnitedHealthcare serve Quest members statewide, while Kaiser Permanente Hawaii is offered only on Maui and Oahu.

Rescheduling the annual open enrollment "ensures that all Quest clients receive accurate and consistent information regarding health plan options," Rosenfeld said. Health plan changes will take effect Aug. 1.

The Waianae Coast Comprehensive Health Center had asked its 7,500 Quest patients who use HMSA to select another carrier during open enrollment because the health center’s contract with HMSA will expire July 1.

The West Oahu health center has been negotiating with HMSA since February 2012 but couldn’t come to terms on a new payment plan.

"Basically we want to help manage the costs of our patients, and we want to share in the savings we get if we manage to keep the cost of care down," said Vija Seh­gal, a pediatrician and associate chief medical officer at the Wai­anae health center.

"They (HMSA) haven’t agreed to it yet. We want to basically be recognized for serving a very sick, socially complex and sicker population than the norm, and we want to share in the savings that result from us being able to manage their care."

HMSA and the health center said in a joint statement Monday that the parties have resumed negotiations this week and are "committed to providing continuity of care to HMSA Quest members."

The department cited the "confusion about which Quest health plans will be accepted by the Wai­anae Coast Comprehensive Health Center" as one reason for canceling the open enrollment.

In a news release, the department said, "Although (the Wai­anae health center) may end its contract as a participating provider with HMSA Quest, (the health center) will continue to be available to serve all community members including those with HMSA Quest."

AlohaCare, the state’s second-largest Quest health plan, said it is ready to sign up Leeward Coast residents who might want to switch from HMSA.

"We have been working very hard in the Leeward Coast to reassure the community that AlohaCare is ready and able to take great care of them if they decided to change plans," said spokes­man Daryl Huff.