Michael D. Dalzell
MANAGED CARE December 1997. ©1997 Stezzi Communications

November's pronouncement by a National Institutes of Health panel that acupuncture is an effective treatment for certain conditions, including postoperative dental pain and chemotherapy-induced nausea, won applause from acupuncture practitioners but did little to increase the likelihood that managed care companies would expand coverage of the procedure.

In fact, one physician group, the American Academy of Medical Acupuncture, says the pendulum is swinging the other way. According to Bradley Williams, M.D., president of the Los Angeles-based academy, a few large Eastern HMOs are acting as brokers, bargaining a $30 fee for acupuncture in exchange for listing a practitioner on its provider panel — but not covering the service. "They're negotiating discount contracts for patients to pay out-of- pocket. That's a revolutionary trend in managed care," he says.

Williams doubts doctors will bite: "For a treatment that takes 45 minutes to an hour, physicians can't do acupuncture for $30." The academy is equally dubious that the NIH report will lead managed care to view acupuncture more favorably in certain situations, despite research that suggests acupuncture can save insurers money.

"In a small pilot study of stroke patients in rehab, savings reached $25,000 per patient when acupuncture techniques were included," says Williams. "A carpal tunnel study found $11,000 savings per patient." The NIH panel indicated that the 2,500-year-old discipline may be a good remedy for these conditions — as well as low back pain, headache and asthma — but more research is needed.

No statistics about the extent of managed care coverage for acupuncture exist, but some health networks — including Oxford Health Plans and Allina Health System — cover complementary medicine as adjunct treatment for certain conditions. In Washington, where state law requires HMOs to cover some alternative services, including acupuncture, naturopathy, massage therapy and osteopathy services for specific clinical conditions, Group Health Cooperative of Puget Sound has a panel of 135 acupuncturists.

Magellan Health Services has agreed to acquire Merit Behavioral Health, creating a behemoth that would manage the psychiatric and addictions care of 60 million enrollees. The move will make Magellan the nation's largest specialty managed care company.

Magellan has expanded aggressively this year. Soon it is expected to complete its recently announced acquisition of Human Affairs International, another behavioral health carveout, from Aetna U.S. Healthcare. Merit will retain its identity under Magellan, while some of its back-office operations, as well as those of HAI, will be folded into Magellan.

In northern Texas, two of the state's largest health insurers are discussing the formation of an alliance that could give them a substantial share of their market. If Blue Cross-Blue Shield of Texas and Harris Methodist Health Plan come together, the combined group would serve 2 million subscribers.

New health plans, which often tout the quality of their care to woo members, now have a chance to substantiate those claims to some degree. The National Committee for Quality Assurance has opened the health plan accreditation process to fledgling managed care plans that, under NCQA rules, had previously been ineligible for participation.

NCQA's Accreditation of New Health Plans program is for plans 30 months old or younger. NCQA examines member rights and grievance policies, confidentiality protections, physician credentialing and utilization management processes. The full accreditation process includes these steps, but also requires plans to develop clinical programs relevant to their memberships. Because that takes time, plans must be in operation at least 18 months before applying for full accreditation.

New plans promoting their accreditation must explain how it differs from full accreditation.

Humana Inc. has made an ingenious promise to enrollees — a pledge the company hopes will distinguish it from the competition: You'll be satisfied with your primary care physician, or we'll help you find a new one and pick up your next copayment. Subscribers who switch will be issued copayment vouchers, which physicians can redeem for cash from Humana.

"The voucher system is the accountability that makes our promise more than just lip service," says Hans Christensen, Humana's director of customer service development. If members don't like their new doctors, they can switch and switch again — picking up copayment vouchers each time they do.

So what about members who might view this as an opportunity for free care? "We have thought about that, and we'll track that activity," says Christensen, who believes that few members take the doctor-patient relationship so trivially as to abuse the offer.

The initiative is the first of a series of Humana service promises that will be aimed at consumers and physicians.

For the coalition of HMOs and citizen groups that called for consumer protection standards in managed care, the hard work is still ahead.

In late September, three major HMOs — Kaiser Permanente, HIP Health Insurance Plans and Group Health Cooperative of Puget Sound — along with the American Association of Retired Persons and Families USA, pledged to push together for legal enforcement of 18 principles. That list included such topics as accessibility, performance measurement and data reporting, disclosure of formularies and loss ratios, and reimbursement incentives.

Now, the biggest step may be to persuade the managed care fraternity — a patchwork of interests, each with its own competitive position, financial status and organizational culture — to go along. The day the coalition issued its principles, the American Association of Health Plans threw cold water on them with an admonishment that "rather than micromanage, government should provide a framework in which the marketplace can play [a] role." One observer suggested in November that AAHP's real gripe was that the three HMOs set themselves apart from the pack, in effect claiming for themselves an image of quality to which other HMOs might be equally entitled (see page 37).

Kaiser, the nation's largest HMO and a leading AAHP member, realizes that building a consensus will take a lot of effort. "We'll be working within the managed care industry and with other health care professionals, as well as legislators, to make sure we're all in sync about how to develop principles that benefit everyone," says spokeswoman Beverly Hayon.

In addition, says Hayon, Kaiser understands that change begins at home. "We'll also scrutinize our own programs — where we do and don't comply — and make sure that what we do is in agreement with these principles," she says.

At least one group says the principles are a good start, but do not go far enough. The Texas Department on Aging says additional standards are needed to protect the elderly from what it considers suspect marketing and disenrollment practices of some HMOs.

What's a peacetime army to do? Try hunting down fraudulent claims against the U.S. military health program. The Denver Post reports an Aurora, Colo.-based support unit has blown the cover off of some bizarre schemes, including one concerning missing body parts and another that involved claims for male hysterectomies.

Some cases grew out of serious crimes. Employees of a San Antonio, Texas, psychiatric hospital kidnapped beneficiaries' children and committed them, according to the report. In another case, a Philippines man severed fingers from beneficiaries stationed there, then used their fingerprints to file false claims. The man tipped his, uh, hand when a thumb fell out of his pocket while he tried to file a medical claim.

It wasn't the only Philippines incident investigated by the Tricare Support Office, which oversees the Department of Defense's managed care programs. Tricare exposed a hospital in the island nation billing the government for hysterectomies it says it performed on men and on sons of beneficiaries.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.