OLYMPIA, Wash.-The cost impact of a Washington state law requiring insured health plans to provide access to alternative health care providers will be closely watched across the country, observers say.
Other states mandate access on a piecemeal basis for some alternative medical providers, particularly chiropractors. But Washington will be the first state to require access to a wide range of therapies, including naturopathy, massage therapy and acupuncture, as long as they are administered by licensed practitioners.
Consultants and others hope data from implementation of Washington's law will provide answers to long-held questions about the cost of alternative medicine coverage.
The Washington law also could increase the already-growing momentum nationally
to offer this coverage, leading either to mandates in some states or the voluntary introduction of coverage by health insurers eager to stand out in today's competitive market.
The Washington law was set to take effect in 1996 but was delayed by a federal suit brought by insurers that oppose the legislation. The way was cleared when the 9th U.S. Circuit Court of Appeals ruled in the state's favor last year and the U.S. Supreme Court earlier this year refused to hear the insurers' appeal.
The hold placed on implementation of the coverage mandate while the federal litigation was resolved is expected to be lifted within the next few weeks, said a Washington Insurance Department spokesman. Meanwhile, regulations promulgating the law are tentatively set to be issued Thursday.
But there may be additional litigation. Two state lawsuits brought by insurers had been stayed pending resolution of the federal case; those cases are now expected to proceed, said a spokesman for one of the insurers, Regence Blue Shield in Seattle.
The Washington law essentially says insurance policies must provide coverage for treatments and services by every category of health care provider, which would include licensed alternative medical care practitioners. Washington provides licenses to a large number of alternative medical providers, including naturopaths, acupuncturists, midwives and massage therapists.
Managed care plans can continue to restrict access to providers in the plans' networks. But the law would require them to include all categories of health care within their network, meaning they would be unable to restrict access to, for example, a naturopath by claiming the network does not include the specialty, according to the Insurance Department spokes-man. Self-insured health plans would not be subject to the state law.
The law may not have a dramatic impact in Washington itself, because many insurers already have introduced at least some coverage for alternative medical therapies in anticipation of the law's implementation.
``I think it's a pretty mixed bag at the moment as to who's offering and who's not offering, and the types of coverage they're offering,'' said Beth Rutherford, a Seattle-based consultant with William M. Mercer Inc.
She noted that while the law applies only to insured plans, a number of self-insured businesses in the state also are offering at least some level of alternative care coverage.
Most of the insurers ``did implement on their insured plan some level of coverage'' when the legislation was originally passed, said Mary Greening, a senior vp with Aon Consulting in Seattle.
Anita Boser, executive director of the Seattle-based Employers Health Purchasing Co-op, which represents about 500 small companies, said her organization's members already offer coverage for alternative care.
Seattle-based Starbucks Coffee Co. already provides coverage for alternative health care, including chiropractic, homeopathic and naturopathic treatments, said a spokeswoman.
Implementation of the law, though, will expand the number of employers offering such coverage and could provide valuable insight into the cost of covering alternative medicine. One school of thought says employees will save employers money because they will go first to less-expensive alternatives to conventional medicine.
The theory is that when alternative care is available, costs will decrease because patients using it get better more quickly and therefore do not use conventional services.
``We haven't found it to be expensive,'' said Ms. Boser. She said her plan has controlled costs by requiring a physician referral to go to an alternative practitioner and by limiting coverage for spinal manipulation by chiropractors to 10 times per year.
But others believe employees will use these therapies as a last resort, which means the cost of covering these treatments would come in addition to the cost of conventional care, thereby increasing overall claims.
Which view is right may be settled in Washington state, consultants say.
The Washington program is likely to spur more research on alternative medicine costs, said Janice Stanger, a Mercer principal in San Francisco. Health plans in the state will begin to generate data, and ``the data will be very useful in determining when it's clinically appropriate and effective'' to offer alternative therapies, she said.
``I think it will also demystify alternative medicine,'' she said ``Right now, people think it's something that's totally inappropriate, or just something that's very `New Agey,' and that the people who do it are kind of kooky.'' That will change, though, if alternative medicine outcomes can be grounded in evidence and research and used appropriately, Ms. Stanger said.
The Washington program ``is going to create a test, if you will, for employers to see what kind of impact this is going to have on their costs, and what the utilization will look like, how many people are actually going to use the service,'' said Camille Haltom, a consultant with Hewitt Associates L.L.C. in Lincolnshire, Ill.
More employers may introduce coverage for alternative therapies ``if they like what they see in Washington,'' she said.
Many who are concerned about increased costs are likely to wait a year or two to see what happens in Washington before introducing alternative medicine coverage themselves, said Lee Launer, a partner with PricewaterhouseCoopers in New York. If it is found that the cost of broadening coverage is not excessive, then ``there will be others who will, in fact, follow that path,'' he said.
Rollout of the law also could increase momentum for health plans to provide coverage for alternative medical therapies.
``I think the country has already looked to Washington state as a leader in alternative medicine, perhaps because it's the location of a couple of schools of naturotherapy and this law has been in the news the past several years,'' said Nancy Hakes, a Phoenix-based health care benefits consultant with The Segal Co.
``We've had lots of inquiries from around the country about this law,'' said the Washington Insurance Department spokesman.
``I think coverage is definitely going to expand just through voluntary decisions made by employers and insurance companies and health plans such as HMOs,'' said Mercer's Ms. Stanger.
According to a Mercer survey of employer-sponsored health plans conducted last year, from 45% to 65% of employers with at least 500 workers now offer chiropractic coverage, depending on the type of health plan they offer. The percentage covering other alternative therapies drops precipitously, though. For instance, only 5% to 10% of large employers offer coverage for biofeedback.
``I think we're going to see those percentages growing over time, because alternative medicine is very popular among plan enrollees, and it also tends to be relatively low-cost, and it's a good way to maintain competitive advantages,'' said Ms. Stanger.
``It's a very hot topic right now,'' said Hewitt's Ms. Haltom. ``A lot of employers are asking for it, and employees are asking for it as well.'
