After four years of legal challenges from the health insurance industry, Washington has become the first state to require coverage of alternative medical services on a comprehensive scale.
The nine-member Washington Supreme Court on Jan. 13 unanimously upheld the "every category" law passed in 1995. The law requires insurers to cover treatments for every category of healthcare provider that is licensed, registered or certified by the state (See chart).
Seattle-based Regence BlueShield, which immediately challenged the legislation, argued that the law should apply only to managed-care plans with "gatekeeper" control of utilization. The court, however, ruled that the mandate applied to all health plans except those provided by self-insured employers, which cover more than 1 million Washington residents. Insurers seem to have exhausted their last legal recourse, as the U.S. Supreme Court last year declined to hear an appeal.
State Insurance Commissioner Deborah Senn did not take the active stance of enforcer during the four-year legal battle, instead pushing for voluntary compliance. However, her office adopted rules in 1999 that allowed the commission to enforce the law and required compliance by Jan. 1, 2000. Regence asked for and was granted a three-month waiver.
Insurers' most common objection was that the law would cause a dramatic increase in cost, said Jim Stevenson, a spokesman for the insurance commissioner.
"But there are no data in the last four years showing that to be the case," he says.
Although two of the three largest insurers in Washington have covered alternative treatments since Jan. 1, 1996, when the law took effect, Clara Kinner, a spokeswoman for Premera Blue Cross, says her company has not studied the financial impact of its alternative medical benefits. Premera is based in Mountlake Terrace, Wash., and covers 1 million people in Alaska, Oregon and Washington.
Group Health Cooperative, a Seattle-based not-for-profit HMO with 590,000 enrollees, treats alternative practitioners as specialists, requiring referrals from primary-care providers.
"We've always had the assumption that insurance companies would need to cover alternative therapies," says Barbara Wolters-Johnson, manager of alternative services at Group Health. "Our hope was that in the long run patients would be more satisfied and more comfortable and would have less need for the services of Western medicine. But right now these services are mostly in addition to traditional medicine."
And even Regence, covering almost 1.2 million enrollees in Washington, had implemented a policy that allowed naturopaths to be primary-care providers in its managed-care plans. About 3,500 of the 358,000 eligible enrollees opted for that choice as of November 1998, says Regence spokesman Steve Eaton.
"We've never been opposed to alternative care," he says. "We just wanted to approach it in a controlled way. Any time you add benefits you run the risk of increasing costs."
Although the law allows greater consumer access to more providers, it does not change or regulate the details of individual plans. Coverage of specific conditions is not mandated, and insurers can limit provider services for certain conditions.
Regence intends to fully comply with the law by March 1.
Officials at 390-bed Providence St. Peter Hospital and 110-bed Capital Medical Center, both in Olympia, Wash., say they already follow a holistic approach to care and have not planned to expand their alternative services based on the court's ruling. Spokesmen for several other hospitals and health systems in the Puget Sound area also say they have made strategic efforts to fulfill their patients' needs for complementary and alternative healthcare, regardless of who is paying for them.
The National Conference of State Legislatures reports that several states have enacted laws relating to insurance coverage for care given by specific types of alternative health providers. Only Washington, however, has passed the every-category mandate.