The state Department of Human Services will be able to conduct a new enrollment plan for Quest, the state's medical insurance program for the poor, without interference from the state Legislature after the state House tabled a bill yesterday that would have limited the amount of Quest patients reassigned to a new health plan to 5 percent.

All 165,000 people in Quest will have to take action this year to enroll in a health plan, rather than automatically staying in their current plan, and likely will get to choose from an expanded list of healthcare providers.

Those who fail to make any choice will be reassigned to new health plans under an algorithm that has favored the lowest bidder for Quest patients.

The department has promised in writing to extend the enrollment time to 60 days and then allow anyone to change plans for any reason within a 90-day grace period.

The department also will pay for treatment for any patient who is unaware they have been reassigned and goes to the wrong provider for care.

House and Senate conferees had agreed last Friday to a 5 percent limit on patients who could be reassigned, in order to reduce disruption. But while the Senate approved the measure yesterday, House Democrats learned in private caucus that they did not have the votes to enforce the agreement.

Ultimately, the potential benefits of competition overcame concerns about potentially causing confusion for some of Hawai'i's most vulnerable residents.

Lillian Koller, the department's director, and her staff had been urging lawmakers to kill the agreement all week because she believed it would undermine choice. The Hawaii Medical Service Association, Kaiser Permanente and AlohaCare are the current Quest providers but others, including Summerlin Life & Health Insurance Co., are apparently interested in bidding for Quest patients this year.

"This was the right thing to do for our clients (in Quest). It was the right thing to do for our taxpayers in Hawai'i, and I'm just gratified," Koller said.

Koller believes Quest patients might be offered more choices and better services if more healthcare providers enter the market. She said she intends to live up to the promises she made to state lawmakers after the department decided to pull its initial enrollment plan two weeks ago amid criticism that it was too disruptive.

"We keep our word," Koller said. "We don't need a statute to make us keep our word."

AlohaCare, which was founded by community health centers and has traditionally been the lowest bidder in Quest, had fought the enrollment plan and believed they had won after the conference committee agreement last Friday.

Philip Kinnicutt, who serves on the board of directors of AlohaCare and the Waikiki Health Center, said he was disappointed by Koller's claims that AlohaCare was more interested in protecting its market share than in preventing patient disruption. Koller had sent lawmakers memos that claimed AlohaCare has gained financially from being the lowest bidder in Quest.

"Frankly, I find Lillian Koller's accusations distasteful and insulting," Kinnicutt said in an e-mail.

John McComas, the chief executive officer of AlohaCare, thanked lawmakers for considering the limits. "Although (the bill) did not pass, we feel that we together with many others did our very best and exerted all of our energy to protect Hawai'i's Quest beneficiaries and the physicians and providers who care for them.

"Our mission remains undeterred — to care for the health of Hawai'i's most vulnerable citizens. We will continue to do just that."

The department had estimated that 5 percent of patients — or 8,250 people — might be reassigned to new plans given previous enrollment trends. But Koller said it is impossible to predict exactly how many patients will be reassigned.

AlohaCare has predicted the number could be three times higher, and some lawmakers who favored limits on the enrollment plan said yesterday they would be watching what eventually happens.

"I think we're going to call them on it in a big and nasty way if it's substantially higher than 5 percent," said state Rep. Josh Green, D-6th (Kailua, Keauhou), a Big Island doctor.

State Rep. Dennis Arakaki, D-30th (Moanalua, Kalihi Valley), the chairman of the House Health Committee, said the limits to the enrollment plan were not given an adequate public hearing as the bill raced through conference committee. "It wasn't really discussed out in the open," he said.

Arakaki, who was on the conference committee but did not support the agreement, has also wanted to promote competition in the Quest market.

"I'm sympathetic to the fact that a health plan like AlohaCare may end up losing enrollees (because) I guess they primarily serve Quest patients," he said. "I think we need to have a health plan like AlohaCare, but on a matter of principle, in competition we can't give anyone that kind of advantage."

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.