The Hidden Obstacles of Managed Care Networks

In my first two articles for Acupuncture Today, I wrote about managed care as it relates to acupuncture providers. In my part-time work as a consultant with a complementary/alternative medicine (CAM) insurance company, I was aware that providers of acupuncture services throughout the country would soon begin receiving applications inviting them to contract with managed care companies. I wanted to provide information I hoped would be helpful in putting this development into perspective, as most acupuncturists have never been invited to work under managed care contracts.

In those articles, I discussed two obvious concerns most acupuncturists have about working within managed care: fees for their services and paperwork requirements. In this article, I would like to discuss some of the less obvious difficulties acupuncturists who sign up to work in managed care networks may experience.

While coverage for acupuncture services has been woefully lacking in the insurance industry to date, some coverage exists and most acupuncturists have patients whose insurance pays for their services. The primary reason to sign up with managed care networks is to bring in new patients, as people who previously did not have any insurance coverage for acupuncture become covered under managed care plans. In addition to newly covered patients, however, some patients who were already covered under their insurance plans will switch (or be switched) to the now available managed care plans.

Managed care plans usually pay less for acupuncture services than most traditional insurance plans. Thus, treating patients whose coverage switches will generate less compensation for the same services. Acupuncturists will also not be allowed to charge patients for the difference, as managed care plans forbid "balance billing" and only allow providers of service to charge set copayments and/or deductibles.

A similar situation can also occur with some "cash" patients who do not have any acupuncture insurance. Some managed care plans being introduced throughout the country are called "access," "affinity" or, more commonly, "discount" plans. These plans are not insurance policies per se, but an agreement with a network of providers to give patients enrolled in these plans a discount, typically 25%. These plans are offered free of charge by insurance companies; some even allow those who do not hold policies with the insurance company to enroll for their discount. That being the case, those who sign up with a managed care network may find some of their regular cash patients demanding their discounts now that they have enrolled in a discount program.

As these new plans spread throughout the country, their growth will be spotty. Some acupuncturists may sign up with one or more networks that bring in a good number of new patients quickly. Other may sign up and not see any patients under these plans for quite some time. This problem of patients switching to managed care was substantial for medical doctors, as most of their patients were covered under traditional insurance. While the growth of managed care acupuncture plans should result in a substantial net gain for our profession, acupuncturists whose first managed care patients switch from higher paying insurance plans or from straight cash to discount plans will not be happy about it.

I have seen this cut both ways in my practice. I once received a call from an insurance company representative who asked if I would sign an agreement to give a discount off their plan's workers' compensation fees. I was told that some employees covered under this plan had given them my name because they wanted to come to me for treatment. I signed the agreement, then learned the hard way that no new patients were interested in seeing me. Two of my regular patients (one who had been seeing me over 12 years) were now covered under this plan. My fees for their treatment were cut. It took me two months to terminate the agreement and get my old fees back. Fortunately, the agreement I signed had a "without cause" termination clause (I would not have signed it otherwise) that allowed me to terminate the agreement without having to prove that the insurance company had violated it.

On the other hand, my practice has a large percentage of geriatric patients and I often find myself waiving my fees for those living on fixed incomes and covered under Medicare (which does not pay for acupuncture). One managed care network I contract with has a Medicare supplemental plan offered through a major insurance company that covers acupuncture. The fees I receive from this plan help me recover some of the fees I may have ended up waiving. This arrangement is better for both myself and my patients.

In spite of the difficulties that can occur working within managed care networks, I remain convinced that the insurance industry's recent interest in CAM therapies -- including acupuncture -- will turn out for the better for both our profession and the public. I don't promote one managed care network over another: I encourage acupuncturists who have decided to test the managed care waters to join more than one and learn first-hand which networks are better. I also hope my articles will help foster a healthy discussion on this subject.