How does insurance coverage for complementary or alternative medicine work?

Criteria for Coverage

There are many complementary and alternative medicine (CAM) therapies, but only
a few have been accepted by traditional medicine and are covered by
health
insurance plans, even when ordered by a medical doctor or an
osteopathic doctor. A covered CAM therapy is reimbursed directly to either the
provider or the patient by the patient’s health insurance company. If the payment
goes directly to the CAM provider, then the patient is responsible for a copayment
(the patient’s up-front share of the cost of treatment). Other health insurance
companies have negotiated a discount with selected CAM providers. The patient pays
this discounted amount out-of-pocket. This discounted payment, however, is not
considered insurance coverage.

Several factors are considered by health insurance companies when deciding whether to cover a CAM service. These factors include whether the treatment is experimental; whether it is ordered by a medical doctor or an osteopathic doctor; whether the CAM provider is licensed by his or her respective state; whether the treatment provided is generally known; and whether the treatment has been adequately researched and found to be effective. Treatments or therapies that are considered experimental are rarely covered by health insurance, and services ordered by a medical doctor or an osteopath are more likely to be covered.

CAM providers who are licensed by their states have had their education and training validated and meet the standards of their states of practice. Licensing standards vary from state to state. Therapies that have been adequately researched are those that have been proven effective by a body of research. The therapy does not have to be 100 percent effective, but it should demonstrate a reasonable amount of effectiveness in treating patient conditions. Medical doctors and osteopaths are more likely to accept therapies that have been adequately researched. Often medical doctors reject CAM therapies because they are not knowledgeable about them.

Coverage for Specific Types of CAM

Some CAM services are accepted by traditional medicine and covered by health
insurance. Biofeedback and nutritional therapy are covered if they are
ordered by a medical doctor. Midwives and osteopathic physicians are covered in
most states. The midwife, for example, must be a registered nurse midwife with a
master’s degree in midwifery and must be working in a
hospital or office with a medical doctor. Midwives who are not registered nurses
are not covered. Osteopaths, because they have been educated in ways similar
to medical doctors, are considered to be physicians, and they function like
medical doctors within their medical specialty. Another CAM service, pet therapy,
is usually provided at no charge. The pets, usually dogs, visit patients in
hospitals or extended care facilities.

The CAM therapies that are most often covered by health insurance are
chiropractic, acupuncture, and massage.
Chiropractic is almost universally covered by insurance, although there are often
limits on the number of office visits that will be covered.

Acupuncture and massage therapy are covered less often, and they may be covered only for certain conditions. Acupuncture is often covered only for pain management for persons with cancer, and massage therapy may be covered only for persons with fibromyalgia.

Implications of Limited Coverage

Despite the limited insurance coverage for CAM services, the services remain popular with consumers. Annually, the CAM industry earns about $34 billion in the United States. It seems, then, that a lack of insurance coverage for CAM has not interfered with the use of these providers. People who use CAM do tend to be wealthier and better educated. They also seem to feel that CAM treatment is helpful to them.

One effect of limited insurance coverage for CAM services is the relatively low cost for these services. This is good for consumers but not necessarily good for providers. CAM providers often earn much less than their counterparts in traditional medicine and are more likely to keep their business expenses low with, for example, a small staff and a small leased office.

Bibliography

Cleary-Guida, Maria B., et al. “A Regional Survey of Health Insurance Coverage for Complementary and Alternative Medicine: Current Status and Future Ramifications.” Journal of Alternative and Complementary Medicine 7, no. 3 (2001): 269-273.

Lafferty, William E., et al. “Insurance Coverage and Subsequent Utilization of Complementary and Alternative Medical (CAM) Providers.” American Journal of Managed Care 12, no. 7 (2006): 397-404.

Nahin, Richard L., et al. “Costs of Complementary and Alternative Medicine (CAM) and Frequency of Visits to CAM Practitioners: United States, 2007.” National Health Statistics Reports: Department of Health and Human Services, July 30, 2009. Available at http://www.cdc.gov/nchs/data/nhrs018.pdf.

National Center for Complementary and Alternative Medicine. “Paying for CAM Treatment.” Available at http://nccam.nih.gov/health/financial.

White House Commission on Complementary and Alternative Medicine. “Coverage and Reimbursement.” Available at http://www.whccamp.hhs.gov/fr7.html.