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, wouldn’t 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 – 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 – 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 employees.

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 provider’s 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 haven’t 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 changes annually.

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 plan’s most expensive medical treatments and suggesting CAM treatment protocols in an effort to reduce costs.

Plan Design
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 Link’s ABC-Codes also cover an expansive list of homeopathic remedies, herbs, vitamins and botanicals – 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.

Conclusion
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 that’s 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 haven’t 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 CAM treatments.