The state’s largest physicians advocacy group is objecting to a new contract from the Hawaii Medical Service Association that the doctors say discourages them from referring patients to specialists outside HMSA’s provider network.

HMSA’s roughly 2,800 network physicians are required to sign the new contract when their old contract expires if they want to continue with HMSA. For the first time this year, HMSA’s contract urges physicians to refer patients to specialists inside HMSA’s provider network. If a physician refers a patient to a specialist outside HMSA’s network, the doctor is required to discuss the possible higher cost with the patient.

The Hawaii Medical Association, the professional group representing 1,100 doctors statewide, says the new contract from the state’s largest health insurer is getting too involved in independent physician practices.

Physicians have a duty to refer patients to the best possible specialist for their condition, said ophthalmologist William Wong.

"HMSA is now intruding upon the direct doctor-patient relationship," said Wong. "I would rather send you to somebody that’s done this procedure 100 times rather than somebody who’s done it two or three times a year. So if that more experienced doctor is nonparticipating (or outside the HMSA network), it should not factor into my medical judgment. There should not be a financial incentive to refer to a particular physician."

Furthermore, HMA says its doctors have little option but to accept the HMSA contract.

"HMSA has a monopoly on the health insurance industry in Hawaii," said Chris Flanders, executive director of the Hawaii Medical Association. "They hold a large enough market share that no physician practice is sustainable without participating in the HMSA plans. They dictate the terms, and the physicians just take what they’re given. They’re refusing to negotiate with individual physicians on this."

HMSA spokeswoman Elisa Yadao said the new contract is in the best interest of patients and doctors.

"Whenever we make changes to our provider contracts, we have an obligation to make sure that we’re working in the best interest of both our members and our providers," Yadao said in a statement. "We currently have ongoing discussions with HMA, and we encourage them to share their input, but we consider these discussions private."

HMSA’s 2015 provider contract includes the following clauses:

» "Participating physician shall use his/her professional judgment when referring members to other providers, and such referral decisions shall be based on the best interest of the member.

Participating physician is urged, however, to refer members to other participating providers whenever appropriate and practical for the financial protection of the member.

» "When referring members to non-participating providers, participating physician shall inform members that the referral is to a non-participating provider and that the member may have increased out of pocket costs as a result."

Pediatric ophthalmologist Malcom Ing said HMSA’s new policy deters doctors and patients from making the best medical decisions and is contrary to the ethical obligation of that "sacred doctor-patient relationship."

"The first obligation a doctor has is not to the insurance company; it’s to the patient. I’m going to send my patient to the specialist I consider the best in that field. It is not the doctors’ function to explain it may cost them more," Ing said. "In fact, it may cost them less. Who knows? That is an imposition that is above my pay grade. I’m not going to tell a patient in the second breath it may cost them more because I’m referring out of network."

Yadao said that when the insurer makes changes to any contract, it provides advance written notice of the changes and solicits input from the providers to whom the changes apply. But HMA said there was no explanation of the changes.

"HMSA provides a very detailed summary of all changes, including a redlined version comparing the new and old contracts," Yadao said. "We also engage in discussions with HMA and other organizations to ensure we are working in the best interest of our members and providers."

Ing said a group of about 300 doctors received the new contract in October and tried to meet with HMSA to negotiate terms, but the insurer offered to meet the last week of December. HMSA urged doctors to sign the new contract before existing agreements expired in January and denied multiple requests for contract extensions, he said.

Ing, whose father was one of the original founders of HMSA, said the insurer sent him just the last page of the contract to sign and return.

"They didn’t want me to read the newest version of their plan," he said. "We’ve seen an erosion of doctors’ influence at HMSA."

When Ing returned the contract with revisions — crossing out the parts he objected to — HMSA rejected it and informed him he was no longer in the network, he said. Ing is currently appealing the decision with HMSA.

Flanders added that "physicians who made red-line changes on the contract before signing it got those sent back to them as void contracts, so there is no negotiation. It’s a take-it-or-leave-it proposition."

The contract also stipulates that physicians can be discharged from the HMSA network without cause, which gives the doctors no leverage in negotiations, according to HMA.

"We were forced into it (the new HMSA contract) or our cash would dry up," Wong said. "I ended up having to sign it because they were telling me, ‘If you don’t sign it, all payments stop.’"

Roger Kimura, an internist at Kua­kini Medical Center who also signed the contract, said it’s all about control.

"They’re trying to control independent providers … by doing this really radical change," he said. "Now if I don’t get authorization and don’t have proper justification, HMSA won’t pay the nonparticipating provider. The contract stipulates (HMSA will recover payments from) the participating doctor who refers to a nonparticipating provider. The primary care physician may not have any idea a specialist is nonparticipating until well after the fact. It’s very scary, actually."

HMA, the physicians group, said most doctors signed the contract without reading it and therefore didn’t notice the changes. The organization is trying to get the word out to members in hopes of negotiating new terms with HMSA.

"The really scary part is the majority of Hawaii physicians have no idea what’s going on. The administrative burdens and hoops that insurance companies require of us make it difficult for doctors to keep up with this sort of basic information that’s really important for us," Kimura said. "They have no idea about the contract they signed. Everybody’s so busy trying to take care of our patients."