Health Insurance for the LAc — Important Point #1

Insurance does not create money, it redistributes it. The money coming in via premiums or taxes must be equal to or greater than the payments for services and the expense of the bureaucracy (whether government or private) that manages the system. (With government programs we have chosen to ignore the imbalance between what is coming in and what goes out. Eventually, we’ll have to face it.)

The system depends on lots of healthy people paying in more than they get back in services. That offsets the folks who need lots and lots of care.

Here are some costs (yes, this term can mean a lot of different things):

  • Type 2 Diabetes — Annual Medical expenses of $13,700 with $7,900 attributed to diabetes.
  • High Blood Pressure — costs of $733/person in 2010.
  • Stroke — Average cost for first 90 days after a stroke is $15,000.
  • Breast Cancer — Average annual cost of $22,000 to manage the early stages with management of stages 3 and 4 costs in excess of $120,000.

Some of the ways insurance companies made sure they took in more than they paid out:

  • limited the amount paid out over a lifetime — reach a million and you are on your own.
  • refused to cover pre-existing conditions — your diabetes will cost a lot, so we won’t cover it.  (This also kept people from waiting until they were sick to buy coverage.)
  • charged “sick” people significantly higher premiums — you have diabetes and HTN likely to cost $1000/month, so your premiums will be $1300/month.

Most of us were bothered by these limitations (especially when we think of individuals – your patient, your cousin). The PPACA eliminates or greatly limits these practices — you can’t be denied coverage for pre-existing conditions, there are no lifetime limits for EHB, and premiums are determined by age and type of coverage, not medical status. These changes force the companies to pay out more per person, and limits what they can take in per person.

To keep premiums from being unaffordably high many healthy people need to pay into the system. This is why the PPACA requires everyone to buy insurance or to pay a penalty.  It is also why the system collapses if everyone expects to get services equivalent to (or greater than) what they pay in premiums.

If someone pays a $150 monthly premium and expects to get ten acupuncture treatments/year, and you “deserve” $700 or more for those treatments, there isn’t much left to cover the bureaucracy or the costs of their neighbor with cancer, their father who just had a stroke, or their own colonoscopy, broken arm, or appendectomy.

This has real implications for your acupuncture practice — whether or not you are a participating provider, whether or not acupuncture is an EHB in your state, and whether or not you expect the AAAOM’s federal legislation to succeed.  Stay tuned for more.

(Here is an NYT article looking at medical choices and costs.)


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© Elaine Wolf Komarow and The Acupuncture Observer, 2013-2033. Unauthorized use and/or duplication of this material without express written permission from Elaine Wolf Komarow is prohibited. Excerpts and links are encouraged, provided that full and clear credit is given with specific direction to the original content.

15 thoughts on “Health Insurance for the LAc — Important Point #1

  1. I agree Elaine, when you have to “modify” your coding to get paid, there is an element of dishonesty introduced, even if it is directed at an adversarial insurance company it still undermines the integrity of the patient practitioner relationship and can be a very slippery slope. I won’t accuse any acupuncturists of this but I have had many patients come into my practice who have experienced endless rounds of therapy, consultations, medications and drugs and have not satisfactorily resolved their problem. I know they would not have endured this if they had to pay out of pocket and frankly if the therapists had integrity would have released them sooner. But hey, medicare pays for x number of treatments so why not use them? When someone comes to me and is paying cash, it lights a fire under me. As acupuncturists, we know we have to produce a good result within a very short time or that person is out of there. They are not going to go through 20 treatments with no change. And I would say if the person is paying out of pocket, they are also more motivated to get something out of it. If I’m being honest I would say this may contribute to why acupuncture works miraculously when other things have failed.

  2. I think this dry needle paranoia in part stems from the fact that one of the key strengths of acupuncture practice continues to elude the acupuncture profession as a whole. That is, there is something inherently dehumanizing about the way modern medicine is practiced, no more how caring the individual doctor may be, there is always a distance between the practitioner and the patient created by the bureaucratic regime. We have spent a good portion of our lives immersed in what we do but I think a lot of people do not consider it from the patient’s perspective. We can hash over tcm vs.classical or acupuncture vs. dry needling but that is all inside baseball, patients have no clue about these niceties. In their minds we still represent something vaguely “holistic,” or “natural.” What they are looking to us for is to fill in the gaps of western medicine, the humanistic element. Acupuncture is largely a blank canvas that people can project their needs on. Dry needling is also dry of any philosophy or holism. If all acupuncturists were integrated into western medicine tomorrow, something else would emerge to fill the void. My philosophy is to try to accurately identify what people are really interested in when they come to me and adapt our medicine to fit their needs, which by not being part of the insurance regime we actually have a huge degree of freedom to do.

    • Here! Here! Well said frank. I find my practice fills this space. People are starving for interaction in regards to their health. They want a practitioner to listen. Unfortunately insurance sees no value in those services. It’s one reason why I’m asking about treating volume. How can I listen to a client, then tongue/pulse and get needles into a client in 15 minutes? I’m very interested to hear others input. Especially around community acupuncture.

      • Again, I’m not sure it is true that acupuncture sees no value to these services. Acupuncture is mostly a business, and always involves that balance between money coming in and money going out. The money coming in comes from the consumer and from the providers who agree to accept less than their full fee in order to have access to a large clientele. Yes, huge powers like Big Pharma, device makers, and others spend many, many millions to make sure their interests are protected. But time isn’t especially well-valued. Ask the MD’s, especially ones like family physicians, for whom good practice = time with client. They aren’t happy with the system either.

        There are challenges to a sliding scale, but it is not impossible to set one up. And saying you performed 4 units of acupuncture when you only did one in order to maximize reimbursement is problematic too — it’s fraud. So is justifying using ankle pain as a code — they did initially come for that, after all — even though you stopped focusing on that months ago. This isn’t right even if they patient pays you cash and submits that receipt for reimbursement on your own.

        For more on POCA, check out their website — website — fair warning, they can be a fesity bunch and are pretty impatient with some of the “contempt before investigation” they get. I encourage you not to get turned off by tone.

  3. Yes, I think you are correct. I personally, do not think the medical community wants or cares about acupuncture. I think they want “Dry Needling” in hospitals for pain management. I don’t really know how all this will look in the end for anyone. It will be interesting

    • I’ve found that a lot of the medical community does want and care about acupuncture — so much so that they incorporate it into their practices which freaks most LAcs out. But what people want (including the consumer) and what they want to pay for sometimes come out to be two very different things.

  4. We are in a really interesting position. It is the nature of any product or service that is paid by a third party (medicine) or financing (education) to have rising costs that continually outpace inflation. Contrast this to consumer goods like electronics, where innovation and competition is directed towards more powerful devices at lower price points. Innovation in the medical sector may cut costs for administrators, increasing profit margin, but this doesn’t seem to ever transfer to the consumer. Some acupuncturists are in states where they are part of the third party payer regime, but I would guess at least half if not more aren’t. Some of those who aren’t don’t realize that we can’t have parity with medical providers in terms of our fees because, without insurance apparently paying for treatment, the patient has to bear the price and our labor becomes as valuable to them as they are willing to make it. It may hurt some people’s feelings but on the free market our labor is somewhere between a barber and a mechanic. But that is almost a separate issue. The historic function of healthcare insurance has been so distorted that is collapsing under its own weight. The purpose of insurance is to share RISK, to chip in a little bit each month and create a large pool of shared resources, in hopes you won’t ever have to redeem it. It’s actually a reverse lottery, you win by getting sick. In the case of auto insurance, it actually works well because most people have car accidents very rarely. With health insurance, it has become something that is expected to pay for most of your healthcare needs, which as you pointed out may easily exceed your premiums. But routine medical care is by definition, routine, not catastrophic and with the high price of even a doctor’s office visit, anything more than routine very quickly outpaces what you’ve paid in. Health insurance has been redefined from a shared risk pool to a ponzi scheme, requiring more and more marks to pay in. Let me be clear, I’m not against more people getting insurance, insurance against getting SICK or INJURED. What I am suggesting is that we (not acupuncturists specifically but society as a whole) begin to consider the unthinkable, that more health care actually be cash only, NOT reimbursed by insurance. An ongoing prescription should be paid for out of pocket. The drug companies will sell it for less just like they do in other countries if the crutch of insurance is removed from them. Look at a physical therapy bill sometime, I assure you the work in that clinic can be done for less than $300 per hour. As acupuncturists, specifically I have to really give the POCA model credit for daring to show that it is possible to deliver a lot of care at a low price. It may not be for everybody but they have opened a door that works for a lot of people. I have very little belief in our ability to move any kind of legislation but I do think we can exhibit successful business model alternatives. Instead of trying to gain inclusion to medicare by sending petitions, we could be drawing attention to the success we have with direct paid services. And by the way, I’m not advocating throwing sick people out in the street either. I’m saying that by returning a lot of routine care to cash, premiums for everyone would fall, prices of fee for service would fall, and medicaid could be expanded for those who need it.

    • I agree. Insurance has changed a lot within my lifetime. Many of those changes have been driven by people who want to do the right thing — provide care for those who wouldn’t otherwise get it — but the influence of many special interests — including Big Pharma (a real villain in this system imo), provider groups (and I put some of our colleagues in there — LAcs play a small role, but we are using the same tactics as our more established provider siblings), and the consumer who doesn’t want anyone telling them what treatments or services they can have and doesn’t want to pay for the services they receive, has created a real mess.

      I think POCA and community acupuncture has been a great contribution to our medicine. For all the complaints from the mainstream about their model, the way they treat is pretty much the way the insurance system will push us all to treat, except that the conventional model would have the practitioner running from “private” cubicle to cubicle, and would use medical extenders to do the intake, etc. I’d rather enter a high-volume low-fee system that is free from the hassle of the jumping through the reimbursement hoops.

      I have a generous sliding scale — and one of the things I hope to wrote about soon is how the increasing reach of insurance into our system could affect our ability to have those scales, even if we choose not to become participating providers. Once again, we’ve got folks taking actions to move the profession in a direction, without thinking through all of the implications.

  5. The greatest flaw of the Affordable Care Act(in my view) is how it guarantees that the private health insurance companies can continue to be the most profitable (greedy) corporations in the country. They maintain control over costs of their plans, and all the plans appear to be more expensive than they were before the ACA– it’s just that the taxpayers will foot a significant portion of the payment for low income individuals and families- to the profiteering health insurance companies. There is no containment of costs– the MD’s and hospitals continue to charge exorbitant rates, as well. As acupuncturists, we need to continue to educate the general public (and the lawmakers) about the value of our services (preventive, low cost, saving money in the long run). And as individual citizens, we can try to get the best plan for ourselves from what’s offered, and continue to point out that the new system, while helping a good number of people, continues to allow the costs of health care to skyrocket, by enriching the parasitic insurance companies– who in most of the civilized world– are not involved in health care, because health care is a right in Britain, Japan, Canada, France, Scandinavia. In the US, well, we’re a sort of primitive culture, controlled by vultures.

    • Well, yes, and….. It still has to come down to controlling costs. Even our non-private system, Medicare, has a problem because we all want to provide more services than we can afford. And in Britain, the national health service very rarely covers acupuncture, for example. We can agree that health care should be a right — but does that mean all health care? The patient can chose what services they want? No system will work if we aren’t willing to accept that some services aren’t “worth” providing. And when acupuncturists who are participating providers manipulate their billing or the way they treat to maximize their reimbursement, they become part of the problem.

      I’ll be exploring the issues in greater depth over the next few weeks, but for-profit insurance companies are only one part of the problem.

      • If we could institute a genuine “pay what you can afford” health care system, the most prosperous patients would be a full fee (that would supplement the income pool) and the less prosperous would pay less. That’s how I (unofficially) run my practice. Many clients pay the full fee for a treatment session ($70)– or, if the session runs 90 minutes, $100. I have a client who works as a dishwasher who pays $40. I have a client with Lyme disease who’s paying $25 per treatment. I’d rather provide treatment at a much reduced fee than have the person not be treated. OK, I understand that sort of system might not add up on the macro scale, unless we could also institute “charge what you can afford”– meaning, the practitioners who are prosperous would be the ones who voluntarily receive less from those less fortunate, to also support the zero sum game we’d ideally have.

        • From what I understand a sliding scale can be seen as discrimination and result in a law suit. At least that’s what I have been warned about.

          I agree acupuncturists are part of the insurance problem. Add estim. Add heat lamp. Do moxa. All to get extra billing for insurance. That’s pretty crummy way to make a living. We should be using our time and money to get insurance to reimburse us for the medicine we treat with….ie: reimbursement for TCM diagnosis and treatment plan. Rather than “acupuncture” that all the different modalities bill for.

          I’m interested to hear from my peers. How do you treat a high volume, insurance based practice? How do you properly diagnosis and treat in 15 minutes? Since insurance does pay for a long initial session, how do you develop a treatment plan by only having the client fill out paper work? I’m wondering if the beauty of our medicine is becoming another pump them in and pump them out modality.

          • Even if we improve the reimbursement rate for acupuncture alone, I’m not sure it will resolve the problem. Part of being in the insurance system is agreeing to take less per treatment than you would make if people paid out of pocket. Unless a practitioner knows that and accepts it up front they are going to end up feeling justified in gaming the system.

            A good person for you to check out regarding an insurance-based practice is Matt Bauer. He wrote Making Acupuncture Pay. You can read more about his work here — He’s a good guy and has a lot of helpful info there.

            I let my patients chose what they will pay on the sliding scale — I’m not making the determination. So I imagine that would avoid the discrimination risk.

          • Thanks for the link. I’ll check it out. I would love to hear more about sliding scales. A lawyer spoke to us in school and told us that a sliding scale could be a problem. It made sense at the time, but I can’t remember the reason. Thanks for the great dialog.

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