SEATTLE—More than five years after Washington state enacted a bold law requiring insurers to cover alternative health care services, observers are still debating how this move has affected health care in the state, and whether it was ultimately a positive or negative step toward integration of “orthodox” and “alternative” medicine.

The law, referred to as the, “Every Category of Provider” mandate, took effect on January 1, 1996. It states that insurers doing business in Washington state must “permit every category of (licensed) health care provider to provide health services or care for conditions included in the basic health plan services” as long as those services are within the provider’s permitted scope of practice, and the provider consents to utilization review and other insurance standards.

Washington is one of the vanguard states on health financing reform and integrative medicine issues; the “Every Category” mandate had broad public support. Under current state licensure laws, it covers naturopathic physicians (NDs), chiropractors, acupuncturists and massage therapists.

John Weeks thinks the law has had a big impact. He is editor and publisher of The Integrator, a Seattle-based newsletter focused on the integration of holistic and allopathic health care. Mr. Weeks, one of the nation’s foremost experts on the politics and economics of natural medicine, surveyed NDs to find out what changes they had noticed in their practices since the law passed.

“There has been a dramatic increase [in business],” he said. “The average gross in these practices is up about 80%, and the percentage of patients in these practices whose services were covered at least in part by insurance has gone from negligible—0–13%—to about 70%.”

Danielle Devine, executive director of the Washington Association of Naturopathic Physicians, in Seattle, agrees. “The law has added an air of legitimacy to alternative medicine,” she said. “Most people look at an insurance book and figure that if someone is listed in the insurance book, they must be good. I think it has brought alternative medicine into the consciousness of those it wouldn’t ordinarily have bought into it.”

But Glen Stream, MD, immediate past-president of the Washington Academy of Family Physicians, said he is not sure how much effect the law is having. “I do think people are having a more enlightened approach to considering things that have in the past been considered non-traditional,” he said. “In some cases, it’s because research in respected medical journals is validating some of these things. I don’t know that the law has had any kind of legitimizing effect.”

What the mandate has done, says Dr. Stream, is to create incentives for the various health professions to petition the state legislature for enlargements of their scopes of practice.

The law definitely did not sit well with insurers, who went to court over it. “We were seeking clarification on the law and whether it applied to [non-managed care] types of coverage,” said Chris Bruzzo, a spokesman for Regence BlueShield, the state’s largest health insurer. Regence and other insurers argued that the state law conflicted with the federal Employee Retirement Income Security Act of 1974 (ERISA), which bars states from regulating interstate health plans.

The insurers’ lawsuit went all the way to the Supreme Court, but was unsuccessful; in the end, the “Every Category” mandate was deemed to apply to all types of health care plans.

The economic impact of the bill has been another bone of contention. Contrary to dire predictions made before the law passed, “there’s been no collapse of the insurance industry,” said Mr. Weeks. He noted that prior to passage of the law, one health plan’s outside actuary predicted costs for some health plans could increase as much as 11%. “But the actual experience in the second year of the mandate was (a rise of) less than 1%.”

Mr. Bruzzo contends that costs have increased. “We do know, from our four plus years’ experience in our managed care plans, that access to new categories of providers does not reduce overall utilization. In fact, our review showed that it was an additive cost.”

The new law, he said, does not replace allopathic care with holistic alternatives, nor does it offset total utilization of traditional services. Instead, Regence found that it encouraged people to turn to additional alternative care after exhausting allopathic options. “For example, cancer patients who had run through all the chemotherapy available were turning to naturopaths and acupuncturists in an effort to try something else.” But Mr. Bruzzo declined requests for cost data supporting his contentions.

Bruce Milliman, ND, past president of the Washington Association of Naturopathic Physicians, said that is only one side of the story. “I am a primary care provider for about 250 Regence patients. I don’t think a whole lot of them are double-dipping; if they have a problem they come to see me. If they need to be referred to someone, they’ll be referred,” he said.

The Seattle-based practitioner said Mr. Bruzzo’s additive cost scenario certainly does not hold for many less serious but very common and costly conditions, like “the 90-plus percent of kids with otitis media who come to an alternative provider. I don’t think they’re going to an alternative provider and then to a pediatrician.”

The law has increased administrative hassles for both insurers and practitioners. The plans are trying to develop credentialing criteria for new groups of health professionals. “We’ve had to come up with new standards for how to tell a good licensed massage practitioner from one that shouldn’t be in the network,” said Mr. Bruzzo. “And the same is true for acupuncturists, although naturopaths have reached a point where we’re pretty clearly able to credential them.”

With regard to naturopaths, plans have implemented the state mandate in various ways, some treating NDs as specialists, and others, notably Regence, allowing members to select NDs as primary care providers (PCPs).

While the law has increased revenue and patient volume for the holistic sector, this has not been without “strings.” Many practitioners find themselves having to cope for the first time with all the billing hassles already faced by conventional MDs. “I’ve told people that once you start doing insurance, you will have to employ at least another [half-time] employee at a minimum,” Dr. Milliman said. “For me, it is actually a full-time employee.”

Fiscal issues aside, the Washington law has encouraged greater dialog and reciprocity in referrals, at least across the ND-MD divide. Mr. Weeks reported in a recent issue of The Integrator, that some naturopaths now find it easier to get consultations and call-backs from MDs; prior to 1996, requests were often ignored or politely dismissed. The change reflects a greater openness among conventional MDs, as well as an increased professionalism and scientific acumen within holistic medicine.

But it also reflects shared economic interests: generally speaking, everybody likes referrals, and MD specialists certainly don’t mind the increased patient flow from newly-ordained naturopathic primary care physicians.

Although the state’s previous insurance commissioner, Deborah Senn, was a major champion of the mandate, little has been heard on the subject from the current commissioner, Mike Kreidler. A spokeswoman for the commissioner said simply that insurers appear to be complying with the law, and declined to comment further.

To subscribe to John Weeks’ The Integrator for the Business of Alternative Medicine, contact Colleen Nee at 877-426-6633.