How to Beat the Bean Counters

By Jennifer Arnold

When Jim Zechman suddenly lost most of the hearing in his left ear, his insurance company spared no expense. It paid for visits to audiologists and ear, nose, and throat (ENT) specialists, along with several MRIs (and treatment for the allergic reaction he had to the radioactive isotope used in the procedure). All in all, Zechman got several months’ and several thousand dollars’ worth of treatment covered by his policy. The only problem was, none of it worked.

“After the MRI came up negative, I went back to the ENT guy,” he says. “He told me a virus had probably damaged my auditory nerve, and that I should go get fitted for a hearing aid.” His insurance company would have paid for that, too. But Zechman wasn’t ready to go that route. Instead, he lived with the problem and hoped it would disappear on its own.

Several years later, he happened to mention his hearing loss to an ophthalmologist friend, Richard Sarnat. Zechman explained that it was just something he’d learned to accept. Sarnat, however, had an idea. He gave Zechman the name of a massage therapist he knew who specialized in craniosacral work, a type of bodywork that enhances the flow of cerebrospinal fluid.

Zechman was skeptical, but since he had nothing to lose, he scheduled a session. The therapist diagnosed a blockage in the fluid’s path and—believe it or not—after a one-hour appointment, Zechman walked out of the office with his hearing fully restored.

He was thrilled to have his hearing back, and willing and able to pay out of pocket for it. But he did find it ironic that the only therapy that helped him—one that was noninvasive, quick, and cheap—was not covered by his insurer, when thousands of dollars of what turned out to be dead-end conventional care had been paid for without question.

If Zechman were having this experience today, instead of back in the late 1990s, he might have better luck (and a harder time getting full coverage for his conventional care). Over the last decade, more and more insurers have taken steps to expand their coverage for complementary and alternative medicine (CAM). They’ve been betting that doing so would help them save money, and a major study published last fall in Archives of Internal Medicine suggests they’re right: Employees who have coverage for chiropractic care are 41 percent less likely to be hospitalized for back pain, 32 percent less likely to have lower back surgery, and 37 percent less likely to require an MRI.

In fact, Zechman himself has helped fuel the expanded coverage trend: He’s now president and CEO of Alternative Medicine Integration Group, a firm he founded with Sarnat in Highland Park, Illinois. The company designs and manages integrative health care models for insurance companies and large employers.

These days, many people are surprised to learn that they’ve got better coverage for alternatives than they thought. Getting access to it may involve a little homework and legwork, but there have never been more options available. Try these strategies to help get your alternative therapies paid for.

Make the most of the plan you’ve got Your first step should be to read the fine print on your current policy—you may find that it covers a lot more than you realize. According to a 2004 survey from the Kaiser Family Foundation, 87 percent of health plans cover chiropractic and 47 percent cover acupuncture. Another survey, done in 2003 by Mercer Human Resources Consulting of Minneapolis, found that 13 percent cover massage; only 14 to 25 percent reported no payment at all for alternatives, so the odds are good that your policy offers at least some benefits.

If you find that your plan doesn’t offer much, vow to pay more attention during the next open enrollment period. “People buy bad policies,” says integrative physician James Dillard, medical director of complementary and alternative medicine for Oxford Health Plans in Trumbull, Connecticut. “They buy a Yugo and expect it to work like a Mercedes.” When given the opportunity to re-enroll, do your homework and be prepared.

Find alternative-minded providers inside the system

These days, many conventional providers incorporate CAM therapies into their practices or are willing to refer you to other specialists who do. “For example, if you have reasonable physical therapy coverage, you should try to find a therapist who combines CAM therapies with regular care,” says Dillard. Finding a CAM-friendly primary care physician is particularly important; often visits to alternative providers are covered only if they’re recommended by your doctor.

One way to start your search is by asking your acupuncturist or massage therapist about physicians they’ve worked with. Or contact medical centers and training hospitals; many now have integrative medicine centers. (Go to www.imconsortium.org/htm/membership.php for a partial list.)

For primary care, consider a chiropractor or naturopath

If your policy covers chiropractic, you may be able to leverage that coverage for more than just adjustments to your back. “In open access plans—in which you can visit specialists without a referral—you can select a chiropractor as your primary care provider,” says Patricia Jackson of the American Chiropractic Association. “Most people aren’t aware that they can do this.”

The same may be true for naturopaths, if you live in one of the 13 states that license graduates of accredited naturopathic medical schools as primary care physicians. (For a list of licensing states, see naturopathic.org/licensure/licensing.html.) Many such practices offer a wide range of therapies under one roof; getting them covered is often easier when they are billed through the primary care provider.

Take advantage of health spending accounts…

Some of the best options for covering alternative therapies come with the various types of health spending accounts now available. These don’t provide benefits in the traditional sense; instead, they let you use pretax dollars to pay for certain health expenses. There are three versions of the accounts, but the rules governing which alternatives are covered apply to all of them. Depending on the tax bracket you’re in, you may be able to cut your out-of-pocket health expenses by as much as one third.

…to save on supplements…

Users of natural therapies got an unexpected boost recently from, of all places, the IRS. In 2003, the agency created new rules allowing reimbursement from the accounts for most over-the-counter medications, which some experts interpret as including supplements.

Because these regulations are so new, though, there are still a lot of gray areas about what’s covered and what’s not. “It’s hazy,” says Harv Randecker, president of the National Association of Alternative Benefit Consultants (NAABC) in Glen Ellyn, Illinois. “The rules are continuing to evolve.”

The daily multivitamin you take for general health might be a tough sell. But if you take niacin for high cholesterol, a B-complex for high triglycerides, or a lutein-based supplement for your eyesight, it’s worth submitting your receipts and taking your chances.

If your submission is questioned, you’ll need to back it up with a letter from a licensed practitioner demonstrating the connection between a diagnosed health problem and the supplement you’re taking.

…and treatments
As for using health spending accounts for other therapies, just about anything recommended by a licensed practitioner—alternative or conventional—should be eligible for reimbursement, says Randecker. (Licensed alternative providers include chiropractors, acu-puncturists, some naturopaths, and massage therapists, among others.) Ultimately, the decision is up to your plan administrator.

Here’s what you need to know about the three types of accounts:

Health savings accounts (HSAs), introduced in late 2003, are the newest option. Basically, HSAs are tax-free savings accounts that work like an IRA, except that you use the money for health care costs.

They are designed for people with a “high-deductible health plan,” defined as any plan with a yearly deductible of at least $1,000 and an out-of-pocket maximum of $5,000. “This option makes a lot of sense for someone who uses alternative practitioners almost exclusively,” says Jim Campbell, an HSA specialist with Strategic Financial Advisers in Bethesda, Maryland. That way you’re not paying for coverage for doctors you don’t use, and you can save money on the practitioners you do use.

The accounts must be set up with a trustee, which can be a bank, a life insurance company, or any other entity approved by the government as an IRA trustee. You can establish an HSA on your own or through an employer, and contributions can be made by you, your employer, or both.

There’s a fixed amount of pretax contributions allowed each year ($2,600 or your deductible, whichever’s lower), and the account goes with you when you change jobs. You pay for health expenses from your HSA until you reach your health plan deductible amount. And if you don’t reach your deductible amount in a year, or don’t exhaust the balance in your HSA, the leftover funds remain in the account and earn interest.
Tip: HSAs are fairly new, so expertise with them is limited. Campbell recommends finding a broker who is a Chartered Benefit Consultant, a designation administered by the NAABC. The organization’s website includes a list of such consultants by state; go to naabc.com/cbcd.htm.

Flexible spending accounts (FSAs), offered by employers, allow you to create a reimbursement fund with pretax dollars deducted from your paycheck. Elizabeth Antonelli*, a 44-year-old editor, shaved about 30 percent off the cost of monthly massages by using money from her FSA to pay for them. “The massages made me feel better than any doctor visit ever did,” she says. “They seemed like a perfectly reasonable use of my flexible spending funds.” The only caveat is that any dollars left in the fund at the end of the year are forfeited, so you have to plan carefully.

Be sure to keep detailed records of what you submitted and which doctor will back its use; if there is any dispute, the account administrator will ask for supporting documentation, most likely a letter from your physician.

Health reimbursement arrangements are similar to flexible spending accounts, but the contributions are made by your employer, not you. These balances can carry over from year to year and be used by your spouse or dependents after your death.

Don’t take no for an answer

What if coverage for a specific therapy is flat-out denied? “Appeal to your health plan,” says Zechman. That may sound bureaucratic and tedious, but it’s often a fairly simple process.

Typically, an appeal involves contacting the medical director of your health plan and providing documentation to support the effectiveness—and cost-effectiveness—of the alternative therapy as compared with the conventional approach. It’s worth asking your provider to help you put together the documentation you need to make your case. You can also use resources like the National Library of Medicine’s PubMed (ncbi.nlm.nih.gov/entrez) to find supporting research.

“If there’s some track record showing that the treatment you want has been effective with other patients with a similar diagnosis, that would raise your chances of success,” says Steve Gorman of Alternative Health Insurance Services in San Jose, California.

You’ll also get further if your provider has the right credentials: “Insurers will pay more attention to what a medical doctor says,” says Gorman. But recommendations from acupuncturists and chiropractors also carry weight, he adds, as long as they’re licensed and the issue at hand falls within the scope of their licensure.

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