Discounting is easy - integration is hard. Still, given the ever-growing popularity of complementary and alternative medicine (CAM), responsive employers are looking for practical advice on entering the CAM marketplace as well as valuable tips on how to avoid problems.

As one source of guidance, we've turned to Jo Melinna Giannini, president and founder of Alternative Link, LLC, originators of a claims processing system for CAM. Before starting Alternative Link, Ms. Giannini designed and sold self-funded medical plans and was a TPA in New Mexico.

What is your first suggestion to a benefits manager who is considering CAM integration but has little experience or background in the area?

If I had only one piece of advice to offer employers or any other health care players wanting to enter the CAM marketplace it would be this; Know the legal parameters in your state or find someone to develop your benefits who does. Employers are considered payers and therefore are governed by many of the same laws as large insurance companies.

Conventional medicine is governed by a national scope-of-practice, but CAM providers' scope-of-practice is governed by individual state laws, and you must be aware of these issues to avoid liability.

I've seen many well-meaning employers add benefits such as Reiki and not realize that it is a prohibited modality in many states. Or, they may use an acupuncturist who illegally distributes or prescribes herbal remedies. As long as you are aware of these kinds of pitfalls and get good advice when designing plan benefits, CAM services should not only be popular with your employees, but also save you money.

Most of these CAM treatments have never been proven to be effective to the standards to medical science. What's the real reason for the popularity you mention?

Personalized attention and length of time spent with the patient is the primary reason consumers choose CAM modalities of treatment. People have become dissatisfied with treatments based on an impersonal set of symptoms. They are looking for acknowledgement and treatment of the whole person.

The discounted fee for services (DFS) system has brought CAM into many benefit plans, and it seems successful for consumers, payers, and providers. Why look further?

DFS is indeed a tool payers and employers use for marketing in exchange for increased referral volume to the CAM provider network. This may be okay for a CAM provider whose modality is not time intensive. But high volume loses meaning for providers whose services require 60 to 120 minutes per encounter.

Networks of CAM providers are expensive to build and harder to maintain. We (at Alternative Link) experienced an average cost of $125 per provider from first contact to finishing the provider service agreement.

By discounting their fees and offering them no real benefits as per their contracts, you don't entice CAM providers to stay in the network. They won't stay if they don't get clients.

In instances where employers do want to manage a network, what's the best approach for negotiating price with CAM providers?

Don't haggle with your providers on the time/price level or you will attract the lowest common denominator of practitioners. Use an NCQA (National Committee for Quality Assurance) certified network and insist that practitioners maintain a private office.

What are the near-term prospects for integrating CAM into employee benefit plans?

It is commonly assumed that integration of CAM into health plans is a no-brainer. It's a direct result of the illusions fostered by DFS.

Consumers want CAM covered by their health plans. By making employees pay out of pocket, DFS discourages employees from seeking CAM treatments that are often effective and usually less expensive. It contains no efficacy or cost-effectiveness outcomes. As a result, employers, lose the reduced cost benefits CAM may have on aggregate claims.

DFS has provided benefits managers with a quick fix for attaching CAM practices to their plans. But DFS is not insurance coverage. Actually, it is proof of providers' frustration over the lack of real benefit coverage.

The short-term fix of DFS is, at best, a poor substitute for meaningful CAM benefits; at worst, it creates a whole new set of obstacles for full integration.

First and foremost, the absence of outcome data in the DFS model does not support the future of CAM in health care. Outcome data is a result of accurate billing codes that track cost-effectiveness and treatment efficacy. Without accurate descriptions of the patient encounter, there is no way to evaluate the CAM treatments you've added to your plan.

Diagnostic codes are the pivotal driver of experience for patient outcomes. Underwriters evaluate fixed costs based on diagnostic codes paired with the treatment codes used to describe the patient encounter. Computer analysis provides information about cost-effectiveness and treatment efficacy of CAM modalities. Your underwriter can't predict exposure without this data. Until CAM is coded in the same way as conventional medicine, all data for comparison is lost.

What would the long-term fix look like?

The long-term fix for integration of CAM into health care is to maintain the current business model and attach CAM to it; Keep the form, add to the content. This means implementing billing codes designed for CAM that also plug into existing health care systems. An additional benefit is that you avoid hidden costs that occur during claims processing.

Treatment codes for conventional medicine are paired with pricing using the HCFA Relations Based Relative Value Scale of Relative Values for Physicians. CAM codes must also be paired with pricing to negotiate services and to predict exposure.

Benefits must be merged on a code level to define the scope of legal treatments from each CAM practitioner. This is possible if the providers are defined by the services they are allowed to perform. Remember that conventional medicine, for MDs or DOs, is governed by the same laws in every state - a national scope of practice. State laws - radically different from state to state - govern CAM providers.

If underwriting experience is to remain the measure of treatment protocols, a method must emerge to connect CAM treatment plans to coded procedures. When cost is attached to the CAM codes, conventional data can be used as a benchmark to allow or disallow treatments. This requires CAM integration with provider contracts and utilization review.

You must have the data that underwriters require for integration of CAM.

If CAM is to be part of mainstream health care, what is your recommendation to benefits planners?

The majority of employers anticipate offering new or additional benefits for CAM care. The well-conceived plan of benefits including CAM must be merged with network development, contracting, coding, pricing, medical management, and experience to bring about the true integration of CAM services into a productive interface with conventional medicine.