Benefits & Compensation Solutions
How to Offer Alternative Medicine (and Keep Your Shirt)
By Melinna Giannini
Many employers today are offering access to Complimentary/Alternative Medical
(CAM) care and with some states requiring access to CAM, benefits managers may
face a new challenge in effectively implementing these programs.
Employees are increasingly using Complementary/Alternative Medicine (CAM) programs in
addition to traditional healthcare services. The wise employer knows that by offering
these services, they may be helpful in attracting and retaining key employees as an
important part of the benefits package. However, wouldnít it be nice to know the costs
for these programs prior to committing to offering CAM programs? What seems like an
easy decision can rapidly become a financial nightmare or a blessing Ė depending upon
how the employer approaches adding CAM benefits to an existing program.
The growth of CAM plan offerings is not limited to creative benefits managers Ė some
states like Washington and Vermont are requiring plans to offer certain CAM services.
As the popularity of these plans grow, the need for information resources on CAM plans
shall also increase in demand as well. Employers and third party administrators need
good advice as they contemplate CAM in an era of escalating health care costs. Consider
the following as a guide toward investigating how to implement a CAM plan for your
Availability of Provider Networks
One of the first questions that faces any designer of CAM benefits plans: are there
networks of providers available, and if so, how are these networks organized? There
are many discount fee-for-service networks, though few of these networks are NCQA
certified. It is not advisable to use them for rider, carve-out, or partially insured
benefits because the plan can be held legally responsible for the referral. While
these networks may seem like an easy solution for adding CAM plan offerings, be sure
to test the network for professionalism. Medical providers who maintain office space,
carry malpractice insurance, and offer their patients predictable office hours will
not want to discount fees to join discount networks. Healthcare providers usually have
a thriving cash business and will only accept managed care contracts if the fee
schedule is within the range of their cash practice. National PPO networks are
exploring this issue and will soon be enrolling CAM practitioners that are NCQA certified.
Another method for using CAM providers in self-funded employer plans is to have your
employees compile a list of providers they currently use. This method provides an
additional benefit for the employer aside from saving time on the research: your
employees will exhibit a higher level of satisfaction with the offerings which in
turn, reduces the number of complaints about the network of CAM providers.
Additionally, payers can also send out a request form to their policyholders asking
for a list of CAM providers that they are already using. This is an inexpensive way
of starting the process of building regional networks of CAM providers. You may want
to do an unannounced site visit to be sure that the CAM providerís office and
facilities are satisfactory. Be advised not to expect most CAM providers to understand
professional record keeping unless they have already been accepted and trained by an
NCQA certified provider network. Remember, most of these providers have not been part
of the system and havenít been trained to process paperwork.
Scope of Practice Laws
Although MDs and Osteopaths are governed by similar scope of practice laws in all
states, CAM providers are governed by a different set of laws in each state. And
these laws are rapidly changing. National associations of providers are often a good
source of information on licensing requirements.
State licensing boards commonly have access to this information, but it is difficult
to find the right person who is willing to go and retrieve it. State officials may
send entire documents that require days to read while attempting to answer more
detailed questions such as: What are the limitations on diagnostic authority for
chiropractors in New York? While information gathering can be a laborious process,
the process has to be repeated for each practitioner type each year as legislation
Before a plan of benefits is considered, a company needs to look at claims experience.
Consider allowing access to CAM for those problems that are big-ticket items for your
plan. There are medical management companies with experience in benchmarking a planís
most expensive medical treatments and suggesting CAM treatment protocols in an effort
to reduce costs.
High initial co-pays are another plan design feature that will keep employees or
policyholders from abusing access to certain CAM benefits. The obvious example of a
treatment which could easily be abused is massage therapy (all of us would love to
have a massage every week). Consider a 50% co-pay for massage therapy tied to some
well defined health problems.
Flexible medical spending accounts are another good way to encourage employee access
to CAM benefits. If a provider network is used, the employer can pay the claims from
these accounts and capture the data to compare to conventional medical services.
Claims Processing and Data Capture
The CAM coding system (ABC-Codes) developed by Alternative Link is the only known
source of coding that describes the patient encounter with alternative medicine
providers. The codes can be compared with conventional claims to determine the most
cost-effective services. The ABC-Codes are compatible with the HCFA 1500 and the
UB-92. Payers can also separate the CAM claims by provider type since special code
modifiers provide that important information. With this data payers can track which
CAM providers are getting the best results for each health problem. Comparisons of
the cost-effectiveness and efficacy of both CAM and conventional medicine treatments
can also be made.
Alternative Linkís ABC-Codes also cover an expansive list of homeopathic remedies,
herbs, vitamins and botanicals Ė including codes for prescription, recommendation,
dispensing, and compounding these products. The use of herbal and vitamin-based
remedies represents a significant and ever-growing, market segment, and Alternative
Link has already coded more than 1,300 homeopathic remedies, 345 Oriental herbs and
botanicals and 228 Western herbs and botanicals. Specific brands and products can be
coded individually for detailed tracking. The coding system allows the payer to track
the use of these products from prescription to result, providing valuable data
relating to the medical and financial performance of each product.
Let Data Drive Your Model
A handful of companies have been too ambitious and have stumbled because of lack of
sufficient data. Plan to learn from the experience instead. Business units should be
trained to monitor CAM benefits for employee satisfaction. Think of the first year as
a test and try several different approaches to see which work best (see Implementing
the Plan below). A plan implemented in California may be a lot different than one
offered in Texas. Ask employees if they want the services about to be offered and
ask the CAM providers to describe their most successful treatments. A formal survey
of participants and providers may be the best method to properly ascertain which
offerings would benefit everyone the most.
Offering CAM benefits to employees makes sense in a labor market where benefits
offerings are under close scrutiny. However, for some administrators, the mere thought
of Complementary/Alternative Medicine offerings are a road filled with peril and
potholes as CAM benefits are really an emerging offering. Information sources are not
as readily available, or linear, as those which address traditional healthcare services.
No one has access to statistical data about CAM yet, and thatís the problem. The
insurance industry is very good at predicting exposure, and CAM can be measured for
effectiveness and compared to conventional medicine. Data needs to be gathered,
compiled, and analyzed so that programs can be effectively designed and implemented.
Those measures are the key to a successful CAM benefit structure.
Implementing the Plan
Evaluate Your Results Year by Year
Year One: Try riders and dollar limits for certain services, but let CAM
providers compete with conventional practitioners to reduce costs for specific health
problems. Develop a structured process for all those involved to offer suggestions to
make the CAM benefits more efficient. Reward innovation and cooperation.
Year Two: Make the medical management unit that reviews these claims a partner
in the decision making for the plan. Have them teach the providers to gather and
capture treatment data and associated cost. This will allow the medical managers to
compare the proposed treatment to conventional treatment outcomes. Adjust co-pays to
discourage or drive patients toward certain treatments.
Year Three: Move statistically effective treatments into core benefits and
delete those that were not cost effective. Try treatments under riders that havenít
been part of the experiment. Moving these pieces of CAM around in a logical way will
allow control of costs at all times while promoting long term savings with effective