Hawaiʻi Healthcare Is Changing: What the HMSA–HPH Partnership Mean for Behavioral Health Providers and Members of Hawai’is largest Health Plan
Hawaiʻi’s healthcare landscape is entering a period of significant change.
Two developments deserve particular attention from behavioral health organizations across the state:
- The proposed partnership between Hawaiʻi Medical Service Association (HMSA) and Hawaiʻi Pacific Health (HPH) under a new nonprofit parent organization, One Health Hawaiʻi.
- HMSA’s planned transition to The ASAM Criteria, Fourth Edition, with providers preparing for Third Edition criteria to no longer be accepted beginning January 1, 2027.
For Community Mental Health Centers, substance use disorder treatment programs, residential facilities, IOP and PHP programs, and utilization review teams, these changes are more than healthcare headlines.
They signal a broader movement toward greater coordination, more structured medical-necessity determinations, more sophisticated clinical documentation, and greater accountability across Hawaiʻi’s healthcare system.
HMSA and Hawaiʻi Pacific Health: A Major Proposed Partnership
First, an important distinction: HMSA and Hawaiʻi Pacific Health have proposed a partnership. This is not yet a completed merger.
The proposal would bring the two organizations together under a newly created nonprofit parent organization called One Health Hawaiʻi.
HMSA would continue operating as a health plan, while Hawaiʻi Pacific Health would remain a healthcare delivery organization within the new structure.
The organizations have described the proposed affiliation as an opportunity to better connect healthcare financing with healthcare delivery and improve coordination throughout Hawaiʻi’s healthcare system.
According to reporting by Hawaii News Now, HMSA and HPH have estimated the partnership could produce as much as $2 billion in savings over approximately 10 years, with potential reinvestment into healthcare and community initiatives. The proposal remains subject to regulatory review.
Featured Video: What Could the HMSA–HPH Partnership Mean for Hawaiʻi?
Hawaii News Now’s Spotlight Now took a closer look at the proposed partnership and what leaders from the two organizations believe it could mean for Hawaiʻi.
The discussion addresses the structure of One Health Hawaiʻi, potential savings, access to care, employment concerns, and the broader goals behind bringing an insurer and healthcare delivery organization into a closer relationship.
Why Should Behavioral Health Providers Care?
Nothing about the proposed partnership automatically means an immediate change to a behavioral health provider’s HMSA contract, reimbursement rate, authorization requirements, or claims process.
But the long-term implications could be substantial.
HMSA already occupies a significant position in Hawaiʻi’s insurance market, while Hawaiʻi Pacific Health operates one of the state’s largest healthcare delivery systems. HMSA describes itself as covering more than half of Hawaiʻi’s population.
Closer alignment between financing and healthcare delivery could eventually influence areas such as:
- Provider contracting and network strategy
- Referral relationships
- Care coordination
- Population health initiatives
- Value-based reimbursement
- Data sharing
- Quality measurement
- Utilization management
- Medical-necessity standards
- Integration of behavioral and physical healthcare
For behavioral health organizations, this is a development worth monitoring closely.
But another HMSA-related change may require much more immediate operational preparation.
HMSA announces Magellan’s move to ASAM 4th Edition beginning in 2027; the first of several Hawai’i payers to discontinue ASAM 3rd Edition Criteria
Substance use disorder providers should begin preparing now for HMSA’s transition to The ASAM Criteria, Fourth Edition.
Based on HMSA provider communications regarding the transition, providers should be preparing for Fourth Edition criteria to replace Third Edition criteria for applicable reviews effective:
January 1, 2027
Organizations relying heavily on ASAM criteria for initial authorization, concurrent review, continued-stay determinations, residential placement, IOP, PHP/high-intensity outpatient services, withdrawal management, and other SUD levels of care should not view this as a simple form change.
ASAM Fourth Edition materially changes how clinical information is organized and how level-of-care decisions are supported.
ASAM released the adult Fourth Edition in October 2023. ASAM notes that states and payers are adopting the Fourth Edition at different rates, meaning providers must pay close attention to the implementation requirements of each payer and jurisdiction.
Provider Note: Access Revenue Hawaii recommends confirming the January 1, 2027 implementation requirements against the specific HMSA or utilization-management communication applicable to your organization and line of business.
ASAM 3rd Edition vs. ASAM 4th Edition: What Changed?
The Fourth Edition still uses a six-dimensional framework, but the dimensions have been reorganized and several important concepts have changed.
ASAM Third Edition
Dimension 1: Acute Intoxication and/or Withdrawal Potential
Dimension 2: Biomedical Conditions and Complications
Dimension 3: Emotional, Behavioral, or Cognitive Conditions and Complications
Dimension 4: Readiness to Change
Dimension 5: Relapse, Continued Use, or Continued Problem Potential
Dimension 6: Recovery/Living Environment
ASAM Fourth Edition
Dimension 1: Intoxication, Withdrawal, and Addiction Medications
Dimension 2: Biomedical Conditions
Dimension 3: Psychiatric and Cognitive Conditions
Dimension 4: Substance Use-Related Risks
Dimension 5: Recovery Environment Interactions
Dimension 6: Person-Centered Considerations
ASAM confirms these six updated dimensions and uses them as the framework for assessment, treatment planning, and level-of-care determination.
Readiness to Change Did Not Disappear
One of the most noticeable differences is that Readiness to Change is no longer its own dimension.
That does not mean motivation, engagement, or willingness to participate in treatment are no longer important.
Instead, ASAM Fourth Edition incorporates readiness and motivational considerations throughout the other dimensions and places additional emphasis on them within Dimension 6: Person-Centered Considerations.
Dimension 6 looks at factors such as:
- Patient preferences
- Barriers to receiving care
- Social determinants affecting treatment access
- The need for motivational enhancement
- Whether the patient is willing and realistically able to engage in the recommended treatment setting
ASAM explains that Dimensions 1 through 5 produce the initial level-of-care recommendation. Dimension 6 then incorporates shared decision-making to determine the setting in which the patient is willing and able to engage in treatment.
That is an important conceptual shift.
One of the Biggest Changes: Subdimensions and Structured Risk Ratings
Fourth Edition introduces a more structured relationship between a patient’s clinical risks and the recommended level of care.
ASAM now identifies specific subdimensions within each dimension.
For example, Dimension 1 includes separate considerations for intoxication, withdrawal, and addiction medication needs. Dimension 4 evaluates risks related to continued substance use and SUD-related behaviors, while Dimension 5 examines the patient’s ability to function safely within the current recovery environment.
The clinician assigns risk ratings to applicable subdimensions.
Those ratings are then incorporated into the Dimensional Admission Criteria and Level of Care Determination Rules.
This is important because ASAM acknowledges a limitation of the Third Edition: although Third Edition included dimensional risk ratings and admission criteria, the admission criteria did not directly reference those risk ratings.
Fourth Edition integrates the two more explicitly.
The goal is to more consistently identify the least intensive level of care in which the patient can be safely and effectively treated.
For utilization review teams, that distinction is critical.
What Does ASAM 4th Edition Mean for Community Mental Health Centers and Free-Standing IOP-PHP Programs?
Community Mental Health Centers providing substance use disorder or co-occurring treatment should evaluate their clinical and administrative workflows well before the transition.
Importantly, ASAM Criteria are primarily used for addiction and co-occurring disorder treatment. They should not be interpreted as replacing the applicable medical-necessity standards for every mental-health-only service provided by a CMHC.
For SUD programs, however, the operational impact could be substantial.
1. Your ASAM Assessment May Need to Change
If your current biopsychosocial or ASAM assessment was built around Third Edition dimensions, it should be reviewed.
The Fourth Edition assessment process incorporates:
- Updated dimensions
- Subdimensions
- Structured risk ratings
- Dimensional drivers
- Person-centered considerations
- More formalized level-of-care decision rules
Simply renaming six headings on an old assessment is unlikely to capture the full intent of Fourth Edition.
2. IOP and Higher-Intensity Outpatient Documentation Will Need Greater Precision
Programs requesting authorization for intensive outpatient or other high-intensity outpatient treatment should be prepared to clearly establish why routine outpatient care is insufficient.
Your documentation should answer:
What specific risk requires this intensity of treatment?
What happens clinically if the patient receives a lower level of care?
Which services at the requested level directly address that risk?
What measurable progress is occurring?
What would need to change before the patient can safely step down?
Fourth Edition is designed to connect the clinical assessment more directly to the recommended level of care.
3. Concurrent Reviews Need to Demonstrate Continued Medical Necessity
A concurrent review should not simply repeat the patient’s original admission symptoms.
The review should tell the payer what has happened since the last authorization.
Strong continued-stay documentation should demonstrate:
- Current dimensional risks
- Changes in risk ratings
- Progress toward treatment goals
- Remaining barriers
- New clinical developments
- Active interventions
- Response to treatment
- Why the present level of care remains necessary
- Why a lower level of care is not yet clinically appropriate
- What criteria must be met for transition or discharge
ASAM specifically provides transition and continued-service criteria to help determine whether the patient should remain at the current level, transition downward, or move to a more intensive level.
What Does ASAM 4th Edition Mean for Residential Treatment Centers?
Residential SUD providers should pay particularly close attention.
ASAM’s Level of Care Certification currently includes adult residential Levels 3.1, 3.5, and 3.7, and CARF has updated its rating elements for these levels to align with Fourth Edition standards.
For residential providers, the clinical chart increasingly needs to explain not merely that the patient benefits from residential treatment, but why the patient cannot safely and effectively receive care at a less intensive level.
Level 3.1
Documentation should establish why the patient’s clinical needs and recovery environment require structured residential support rather than outpatient treatment with community-based living.
Level 3.5
Documentation needs to support the higher intensity of clinical structure, therapeutic intervention, supervision, and treatment required by the patient’s risk profile.
Level 3.7
Patients generally present with greater medical, withdrawal, psychiatric, cognitive, or other clinical complexity requiring significantly greater monitoring and interdisciplinary capability.
The distinction between levels of care becomes especially important when utilization review teams are attempting to defend continued residential treatment.
Why Utilization Review Teams Should Start Preparing Now
The biggest operational impact of ASAM Fourth Edition may occur inside the utilization review department.
Your UR specialist is responsible for translating an entire medical record into a concise medical-necessity argument that the payer can understand.
Under Fourth Edition, that story increasingly follows a logical sequence:
Clinical Presentation → ASAM Subdimension → Risk Rating → Dimensional Driver → Requested Level of Care → Active Intervention → Continued Medical Necessity
Consider the difference.
A generalized review might state:
“The patient remains at high risk for relapse and continues to require residential treatment.”
A stronger Fourth Edition-oriented review answers:
- What makes the risk high?
- What evidence supports that conclusion?
- Which dimension and subdimension are driving treatment?
- Why can’t the risk be managed at a lower level?
- What is the residential program doing about it?
- How is the patient responding?
- What still prevents safe transition?
That is much more defensible.
More documentation does not automatically mean stronger documentation.
Specific, clinically connected documentation does.
ASAM has even created standardized Fourth Edition Admission Service Request and Continued Service Request forms organized around dimensions, subdimensions, risk ratings, dimensional drivers, and level-of-care adjustments to improve communication between providers and payers.
Co-Occurring Mental Health Conditions Matter More Than Ever
Fourth Edition also strengthens expectations surrounding integrated care for patients with co-occurring psychiatric and substance use disorders.
Dimension 3 now specifically addresses Psychiatric and Cognitive Conditions, while the overall Fourth Edition framework emphasizes addiction treatment alongside co-occurring conditions.
For dual-diagnosis programs, this means organizations should evaluate whether the medical record clearly demonstrates coordination between:
- SUD clinicians
- Therapists
- Case managers
- Psychiatric providers
- Nursing
- Medical providers
- Utilization review
- Discharge planning
A patient’s psychiatric symptoms should not exist in one part of the chart while the ASAM assessment, treatment plan, progress notes, and authorization request tell entirely different stories.
Seven Steps Behavioral Health Facilities Can Take Now
January 2027 may sound distant, but changing a clinical documentation system takes time.
Behavioral health organizations should consider beginning their preparation now:
1. Obtain and review Fourth Edition resources.
Make sure clinical and UR leadership understand the new dimensions, subdimensions, risk ratings, and level-of-care methodology.
2. Audit current ASAM assessments.
Determine how heavily existing forms depend on Third Edition terminology and decision-making.
3. Review admission and concurrent-review templates.
Your UR documentation should align with the clinical framework the payer will use.
4. Train interdisciplinary staff.
This is not solely a utilization review change. Clinicians, case managers, nurses, prescribers, medical providers, and UR staff all contribute to the medical record.
5. Review treatment plans.
Treatment goals should be individualized, measurable, clinically relevant, and tied to the risks keeping the patient at the current level of care.
6. Evaluate each level of care independently.
A Level 3.1 program should not document medical necessity exactly like a 3.5 program, just as IOP documentation should not look identical to routine outpatient documentation.
7. Test the new process before the deadline.
Conduct mock reviews on current patients and determine whether another clinician or UR specialist can clearly identify why each patient is at the documented level of care.
The Bigger Picture for Hawaiʻi Behavioral Health
At first glance, the HMSA–HPH proposed partnership and the transition to ASAM Fourth Edition may appear to be two completely separate developments.
But they reflect a similar direction of travel.
Healthcare organizations are being asked to demonstrate:
- Better coordination
- Greater accountability
- More measurable outcomes
- Clearer clinical decision-making
- Stronger integration between clinical and administrative operations
For behavioral health providers, that means clinical care, utilization review, and revenue cycle management can no longer operate in separate silos.
Your assessment tells a story.
Your treatment plan tells a story.
Your progress notes tell a story.
Your utilization review tells a story.
And ultimately, your claim tells a story.
They all need to tell the same story.
When they do not, authorization and reimbursement risk increases.
When they do, your organization is in a much stronger position to demonstrate why the care being delivered is medically necessary.
Is Your Organization Ready for ASAM 4th Edition?
Access Revenue Hawaii works exclusively within the complicated world of behavioral health revenue cycle management.
Our work includes:
- Behavioral health utilization review
- Prior authorizations and concurrent reviews
- Residential SUD
- Withdrawal management and detox
- IOP and PHP
- Clinical documentation support
- Behavioral health billing
- UB-04 and CMS-1500 claims
- Denial management and appeals
- Payer contracting and credentialing
- Revenue cycle management
Our utilization review team views authorization as more than an administrative requirement.
It is patient advocacy.
The goal is to ensure that a payer understands the clinical circumstances supporting the level of care the treatment team believes the patient needs.
If your organization is still operating primarily from ASAM Third Edition assessments, templates, and UR workflows, now is the time to begin evaluating your readiness for Fourth Edition.
Let Access Revenue Hawaii Review Your Current Workflow
We are happy to review your current clinical documentation, utilization review, and revenue cycle workflows to identify potential areas of risk and help your organization prepare for the changes ahead.
Access Revenue Hawaii
808-746-2555
info@accessrevenuehawaii.com
www.accessrevenuehawaii.com
Access Revenue Hawaii provides this article for educational and informational purposes only. Payer requirements may vary by plan, contract, population, and date of service. Providers should confirm current authorization, medical-necessity, coding, billing, and ASAM implementation requirements directly with the applicable health plan before relying on them for patient-care or reimbursement decisions.