Hawaii's Largest Insurer Changed Who Counts as a Patient on September 1. One Nurse Practitioner Was Told It Would Cost Her $162,000.

Industry News by DPC Insider — Practice Desk
#payment models#primary care#insurance#practice economics#hawaii
Sources: Private-practice doctors alarmed by HMSA policy changes · Private-practice doctors alarmed by HMSA policy changes (Honolulu Star-Advertiser) · HMSA's payment system pivot has Hawaii's medical community reeling · HMSA's payment system pivot has Hawaii's medical community reeling (Honolulu Star-Advertiser) · New Study Reveals Hawai'i Doctors Struggling Under HMSA's Payment System

Kaleo Correa was told that about 450 people would come off her patient panel on September 1. Her insurer had rewritten the rule for who counts as her patient.

Correa is an advanced practice registered nurse and the founder of Waimea Primary Care on Hawaii Island. Hawaii Health Partners notified her of the change, which comes from the Hawaii Medical Service Association, the state’s largest health insurer. Those 450 people are close to 40 percent of the clinic’s HMSA patients and about $162,000 a year, according to the Honolulu Star-Advertiser.

The new rules count claims. A person can sit on a clinic’s books and off the insurer’s list at the same time.

Two rules, sixty days

The changes took effect September 1. The first drops any patient with no claim processed in the past 18 months from that provider’s panel. The second says that when a patient sees more than one primary care provider during a calendar year, only the provider with the higher visit count gets reimbursed.

Both rules use claims activity as the test. A claim is a record of billing, and billing is a decent proxy for care right up until the moment you build a payment rule on it. The healthy 34-year-old who hasn’t needed anything since early 2025 disappears from a panel. So does the patient who saw an urgent care provider twice while their regular clinic saw them once.

The Hawaii Healthcare Task Force called this another “operationally impossible 60-day payment change to primary care” and said it will result in more clinic closures. HMSA has said it is seeking clearer data on patient care, which is a reasonable thing for an insurer to want and a hard thing to extract from claim counts.

The model HMSA spent ten years building

In 2016 HMSA launched a program it called payment transformation, built with more than 100 primary care providers. It stopped paying per visit. Instead it paid a set amount for each attributed patient every month, ranging from $20 to $80 depending on that patient’s complexity.

That is the same revenue shape a DPC membership creates. Money arrives monthly, per person, whether or not anyone walks through the door. Panels shrink, visits get longer and the practice stops chasing volume.

It was never universally loved. A 2020 report by the Aimed Alliance found most primary care providers disliked it, and doctors called the model harmful to patient care and likely to push practices out of business. Then in May, HMSA told providers it was reverting to fee-for-service effective July 1, with 60 days of notice. Practices said the timeline was too abrupt. Gov. Josh Green intervened and HMSA pushed the deadline to January.

Four months short of that new deadline, the panel rules landed on their own 60-day clock.

What the two models don’t share

A DPC practice and an HMSA payment transformation practice both collect a fixed amount per patient per month. That’s where the resemblance stops.

In one, the patient signs an agreement with the practice and stays on the roster until somebody cancels. In the other, an insurer maintains the roster, defines what qualifies a person to be on it and can revise that definition with two months of warning. Correa’s clinic didn’t change how it practices. Its revenue changed anyway, because the entity holding the list ran a different query.

You might read this as a Hawaii story about one insurer with unusual market concentration. That reading is fair and incomplete. Attribution rules exist wherever a payer pays per member rather than per service, which includes most value-based contracts a primary care practice will be offered this decade. The rules are usually buried in an appendix nobody negotiates.

Where DPC Fits

DPC doesn’t fix Hawaii’s problem. Waimea Primary Care’s HMSA patients are HMSA patients, and a membership model doesn’t retrieve them.

What the model does is put the roster in the practice’s hands. Nobody outside the clinic decides whether an 18-month gap in visits ends a relationship, because there is no claim to count and no attribution logic to lose an argument with. A member who hasn’t come in since spring 2025 is still a member, and the practice can go find out why.

That’s a narrower promise than it sounds. The revenue doesn’t get larger and patient acquisition doesn’t get easier, and those are the two things most physicians ask about first. What it buys is a number the practice can audit itself.

Correa disputes HMSA’s list. She says at least 177 of the 450 did have a visit inside the 18-month window, and she is still asking the insurer for the data behind the count. That is the argument a practice has to have when somebody else keeps the roster.