In collaboration with Governor Josh Green, HMSA will provide additional transition time and financial support to help protect continuity of care for members and support primary care physicians
HONOLULU — Hawaiʻi Medical Service Association (HMSA) today announced that it will extend the transition period for its new primary care physician payment model by six months, giving HMSA primary care physicians the option to delay implementation until Jan. 1, 2027.
The announcement follows discussions with Governor Josh Green, the state of Hawaiʻi, and primary care physicians regarding the need to support practices through the transition and protect continuity of care for HMSA members.
Under the updated approach, primary care physicians may still choose to move into the new fee-for-service payment model now and access the transition supports available through the program. Physicians who prefer additional time may remain under their current arrangement during the six-month extension and transition to the new model on Jan. 1, 2027.
“We’ve heard the concerns raised by physicians and state leaders, and we are making this adjustment because we understand primary care is essential to Hawaiʻi’s health care system,” said Mark M. Mugiishi, M.D., FACS, HMSA chief executive officer. “Our goal is to support physicians, protect continuity of care for our members, and make sure this transition is implemented in a responsible way. We appreciate Governor Green’s engagement as a physician and as governor, and we share his commitment to strengthening primary care across the state.”
The updated transition plan includes the following options:
- A six-month extension, allowing HMSA primary care physicians to transition to the new payment model on Jan. 1, 2027, if they choose not to opt in now.
- Opt-in availability (to begin on July 1) for physicians who want to move to the new model before Jan. 1, 2027.
- In the new model, the fee schedule payment rate will be 15 percent higher for Neighbor Island primary care physicians to help address the added costs and access challenges of delivering care in rural and Neighbor Island communities.
- A temporary financial support program for eligible practices experiencing significant and unforeseen financial hardship directly related to the payment model transition for those who opt in now.
- Transition assistance to help practices adapt to new workflows, billing processes, revenue cycles, and reimbursement requirements.
Governor Green, who is also a physician, said the collaboration reflects a shared commitment to supporting primary care and rural health care access.
“As a doctor, I have heard directly from physicians and communities about the pressure primary care practices are facing,” said Governor Green. “I appreciate HMSA’s willingness to listen, work with my administration, and adjust its approach. This agreement gives physicians more time, provides targeted support, and helps ensure patients can continue seeing the doctors they know and trust.”
The payment model transition remains necessary to reflect today’s health care environment and ensure long-term sustainability. Moving to a value-based model that has a clearer fee-for-service structure with quality payments for more streamlined measures will help HMSA establish a more current baseline for utilization and cost, improve encounter and data accuracy, reward quality care, and support the design of future payment models that are sustainable, fair, and better aligned with the needs of patients and providers.
The transition also reflects regulatory requirements for claims-based rate setting. Claims must be submitted so HMSA and the state of Hawaiʻi can accurately document care delivered, establish appropriate rates, and ensure Hawaiʻi receives its fair share of available federal health care funding.
The six-month extension is not a retreat from payment reform, but a more deliberate transition designed to support primary care practices, while HMSA works with physicians, state leaders, and community partners on the next generation of value-based care.
“This is about getting the transition right,” said Mugiishi. “We continue to believe Hawaiʻi needs a payment model that supports access, quality, prevention, chronic disease management, and long-term affordability. This extension allows us to move forward, while giving physicians additional time and support.”
HMSA will continue working with the Green administration on broader efforts to strengthen rural health and Neighbor Island access, including opportunities aligned with Hawaiʻi’s rural health transformation priorities.
Primary care physicians will receive additional information from HMSA regarding transition options, eligibility for support programs, and implementation timelines.
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About HMSA
Caring for the people of Hawaiʻi is HMSA’s promise and privilege. Working together with employers, partners, and physicians and other health care providers, we promote well-being; develop reliable, affordable health plans; and support members with clear, thoughtful guidance. Established in 1938 by social workers, HMSA is the most experienced health plan in the state. Starting in 2025, HMSA is supporting TriWest Healthcare Alliance to administer the U.S. Department of Defense’s TRICARE program, providing health care for uniformed service members, their families, and survivors locally. With the addition of TRICARE, HMSA provides health care to nearly 1 million people in Hawaiʻi. We embrace our responsibility as a recognized leader to strengthen the health and well-being of our community. Headquartered on Oahu with centers statewide to serve our members, HMSA is an independent licensee of the Blue Cross Blue Shield Association.