Every Category of Provider: Hindsight Is 20/20 Vision
| Publication year | 1997 |
Introduction
"In Johann Wolfgang von Goethe's 'Faust,' the title character asks the devil for good health. The devil replies:
Wouldn't it be nice if the recipe for maintaining good health was that simple? For many Americans, in addition to a healthy diet and regular exercise, striving for and maintaining good health includes (contrary to what Goethe's devil says) regular visits to a physician. For others, maintaining good health may consist of a visit to their massage therapist, chiropractor, acupuncturist, naturopathic physician, or other "nontraditional" or alternative health care provider. "To each his or her own," right? Wrong. A dilemma always arises with the provision of health care services: Americans want to choose their health care providers and they want their health insurance to cover visits to any of those providers. This problem is especially acute in the area of natural medicine, or alternative care.
Americans by the millions are turning to nontraditional or alternative means for medical treatment.(fn2) Alternative medicine, once considered quackery, is rapidly taking root.(fn3) According to a 1993 study in the
As an example, in early 1996, the King County Council voted unanimously to establish the nation's first government-subsidized natural medicine clinic, "in which diet, exercise, vitamins and treatments like acupuncture take precedence over drugs and the tools of conventional medicine."(fn7) Also in early 1996, the state of Washington began requiring health insurers to cover treatments like acupuncture, massage therapy, and other forms of licensed natural health care.(fn8) It is important to note that "licensed natural health care" means something different in Washington than it does in other states: Washington is one of only ten states that licenses naturopathic doctors.(fn9) Contrast this with New York, which does not license naturopaths, and with California, where the Legislature has refused to allow naturopaths to rise to the status of licensed practitioners, a far cry from forcing insurers to pay for naturopaths' services.(fn10) Unlike the government-subsidized natural medicine clinic, the mandate requiring insurers to cover "Every Category of Provider," has been steeped in controversy.(fn11)
The controversy began on December 19, 1995,(fn12) when the Office of the Insurance Commissioner (OIC) issued a Bulletin(fn13) to provide guidance to disability insurers,(fn14) health care services contractors,(fn15) and health maintenance organizations(fn16) on the OIC interpretation of title 48, chapter 43, section 45 of the Washington Revised Code, referred to as the "Every Category of Provider" statute.(fn17) The interpretation, or policy statement, that was presented in the Bulletin and subsequently in a Declaratory Order,(fn18) unleashed a mass of litigation as disability insurers, health care services contractors (HCSCs), and health maintenance organizations (HMOs) sued Deborah Senn, Insurance Commissioner of the State of Washington.(fn19)
In essence, the Bulletin and the subsequent Declaratory Order interpreting the statute required "every health plan(fn20) delivered, issued for delivery, or renewed on or after January 1, 1996," to include all categories of providers in every health plan.(fn21) What this meant for disability insurers, HCSCs, and HMOs was that they had to include every category of alternative health care provider(fn22) within their health insurance benefits packages.(fn23) Health insurance policy holders were thereby given an option to select alternative types of providers, as well as traditional medical providers, to treat their health conditions.
In the first lawsuit filed against Senn, the plaintiffs made three allegations: (1) the Bulletin is a rule issued in violation of the Administrative Procedure Act;(fn24) (2) the Bulletin is contrary to and exceeds the scope of the statute on which it is based; and (3) the Bulletin's application of title 48, chapter 43, section 45 of the Washington Revised Code to every health plan issued in the state renders it preempted by the federal Employee Retirement Income Security Act (ERISA).(fn25)
A Thurston County Superior Court judge ruled on April 8, 1996, that the Insurance Commissioner acted within her authority in issuing the Bulletin which interpreted the "Every Category of Provider" requirements.(fn26) The judge further ruled that the Bulletin was not a rule, that Senn did not exceed her authority in issuing the Bulletin, and that the plaintiffs had to exhaust their administrative remedies in challenging Senn's action before filing a lawsuit.(fn27) The ERISA challenge, which focused on the language of the statute and its interpretation, was moved to federal district court.(fn28) There, the federal judge overturned the statute, holding that the law was rendered preempted under ERISA.(fn29) The insurance commissioner has appealed the ruling.(fn30)
What is troubling about the statute, its interpretation, and the litigation is that the policies underlying the initial legislation have been lost in the battles between the Insurance Commissioner and insurers. The "Every Category of Provider" statute was public interest legislation asking insurance carriers to include, while giving policyholders a choice of, alternative care providers. As a result of the Insurance Commissioner's interpretory mandate, and what was probably the proverbial "straw that broke the insurers' back,"(fn31) Washingtonians have lost statutory support for consumer choice. The unfortunate outcome is that Commissioner Senn, in issuing the mandate, ultimately harmed the consumers she so vehemently fights to protect.(fn32)
In addition, the insurers look like the "bad guys" and appear unsupportive of alternative care and third-party reimbursement for that care. Nothing, however, could be further from the truth.(fn33) At the time the statute was passed, before issuance of the Bulletin, insurers were trying to figure out how much the newly-authorized services would cost and how to reimburse them.(fn34) The insurers already had reason to study these services because they had obtained data showing that Washingtonians were spending approximately $475 million each year out of their own pockets for alternative medicine treatments.(fn35) As a result of those out-of-pocket expenses, consumers began demanding third-party reimbursement of those services.(fn36) Insurers understood that the public interest legislation, combined with consumer demand, required action. Rather than ignoring these market forces, insurers began to research and test ways in which they might cover various treatments.(fn37)
Another factor compounding the insurers' issue of how to provide coverage for alternative care services in a manner consistent with market demand, is that both health insurers and traditional health providers have had a clear bias against any form of alternative care.(fn38) Stories making the rounds, for example, told of chiropractors treating liver disease and cancer(fn39) and of gullible consumers being duped into paying for unnecessary treatments.(fn40) Insurers, traditional providers, and alternative care providers had to come to some mutual understanding to bridge their different cultures and distinct orientations.(fn41) "One is high-tech, the other human-intensive. One focuses on attacking disease and microbes with drugs and surgeries, the other on restoring and promoting health through physical therapies, therapeutic nutrition and patient-centered initiatives."(fn42) The two worlds could not be farther apart. And, just as the two groups were beginning to build the bridge between them, the OIC issued the interpretory mandate enforcing the statute, and the subsequent litigation overturned and preempted both the statute and its interpretation.(fn43) Unfortunately "the relationship got sidetracked by the litigation."(fn44)
True, the relationship may have been sidetracked, but it is not completely off course. What is so ironic about this whole process, i.e., statute passage, statute interpretation, litigation, and ultimate preemption, is that all of the aforementioned parties continue to work toward an integrated health care system that provides access to treatments by all licensed providers.(fn45) The creation of this integrated system, which has been on-going since the statute was passed, has not really been interrupted.(fn46)
Why then did the insurers and Commissioner Senn litigate over the statute? The answer is simple: they litigated as a result of...
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