naturopathydigest.com -- Insurance Coverage: A Double-Edged Sword

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Insurance Coverage:
A Double-Edged Sword

By John Hahn, ND, DPM

Having been in practice since 1972, I would like to embark on a journey of my relationships with third-party payers, also known as insurance companies.

The story begins when I was a resident in podiatric medicine in California during the early 1970s. At that time in California, podiatrists were considered equal to medical doctors, as far as insurance companies and Medicare were concerned, for providing services for foot and ankle problems. However, there was vehement discrimination from the established medical community against podiatrists because of our "lack of total medical training" during our podiatric education. The allopathic medical profession wanted to limit podiatry to in-office palliative foot care and arch support fitting. They wanted to completely disregard our extensive biomechanics and surgical training.
As you read this article, you will see a lot of parallels to the naturopathy profession as it currently exists within the insurance and hospital realm. Some examples of these parallels for naturopathic physicians, at least in the state of Oregon, include the following:

Naturopaths are not allowed to participate in most health insurance plans. They are excluded from the state of Oregon workers' compensation law as full providers for workers' compensation patients. Naturopathic physicians are excluded from Medicare as primary care providers.
Naturopathic physicians who are members of insurance groups are paid on a different indemnity schedule than medical doctors or osteopathic physicians (for the same services) by the alternative medical networks that contract with large insurance carriers.
Naturopathic physicians are not recognized by the established medical community as being equal in the providing of health care services as general practitioners.
Naturopathic physicians are not allowed on the staffs of hospitals and therefore cannot admit patients for inpatient care.
The medical establishment, both in the insurance realm and the hospital realm, does not believe that naturopathic physicians receive adequate medical training to be classified as general practitioners. All medical doctors and osteopathic physicians have to undergo one or more years of postgraduate residency in order to be qualified by most states for licensure.
Medical liability insurance is difficult to obtain for naturopathic physicians, because most companies that sell liability insurance to naturopaths exclude one or more treatment modalities that naturopaths use on a regular basis. This is not the case with liability insurance carriers that insure medical doctors and osteopathic physicians.

A Process of Exclusion
Many of the insurance carriers and hospitals are controlled by medical doctors who do not want ancillary providers in their realm for a number of professional and economic reasons. Since allopathic and osteopathic physicians control insurance HMO company and hospital policies, they were able to exclude podiatric physicians from membership for a number of years in various states, even though all states licensed podiatrists to perform surgery on the foot and lower extremities, to prescribe narcotics and antibiotics and to be able to admit patients for inpatient hospital procedures. The same exclusionary policies that were directed toward the podiatric profession are now directed toward the naturopathic profession.
Patients demanding insurance coverage for foot pathology treatment by podiatrists began gaining momentum in California in the early 1970s. Insurance and hospital policies began to change in California. After completing my residency in San Francisco, I moved to Oregon. I found Oregon to be 10 years behind in terms of insurance company policies and hospital recognition of podiatrists as health care providers.
In the Portland area, there was only one osteopathic hospital that allowed podiatrists to perform surgery. All other MD-controlled hospitals refused admission of podiatrists to their staffs, by saying they were not well-trained enough to admit patients or perform surgeries on the foot and ankle. These excuses were blatantly false and not based on any concrete data regarding the advanced training and residencies that podiatrists were doing throughout the U.S.
Since part of my training involved rotations through the University of California Medical School in San Francisco, I assumed that the University of Oregon Health Science Center would have a similar podiatry department to look after patients with foot pathology. I approached the dean of the medical school located in Portland and asked him how they were treating patients with diabetic ulcers and vascular disease. He said that they "watched them" until they became gangrenous and then would send them to the orthopedic surgeon or vascular surgeon for amputation.
I pleaded with him to allow a podiatrist to help these patients retain their lower extremities by biomechanical treatment and wound management for their ulcers. He agreed to this request and I became the first podiatrist on staff in the department of medicine in the subgroup of endocrinology in the state of Oregon. The dean met with some flak from the department of orthopedics for allowing a podiatrist to be on staff and in the outpatient clinic. Once the physicians and nurses saw what we could do to help these patients with lower extremity problems and vascular insufficiency, it wasn't long before I was asked to see patients at the Portland Veterans Administration Hospital. We were saving feet and lower extremities that were previously being amputated by the orthopedic and vascular surgeons.
Breakthroughs were being made on the Oregon legislative front for podiatry in the mid-1970s, to require hospitals to allow podiatrists to be admitted as attending physicians to all hospitals in the state. This legislation was based on the fact that most hospitals receive federal Hill Burton funds for operation and had to abide by federal laws regarding discrimination of providers. We were successful in the legislative arena to pass a law requiring all joint commission accredited hospitals to allow podiatric physicians and surgeons on staff in the mid-1970s. However, insurance companies were much more reluctant to pay for podiatry services and developed schemes to either withhold payment or reduce payment for services rendered by podiatrists as opposed to medical doctors and osteopaths.
It also became evident to me that not only were the insurance companies not paying equally for equal services but they also were telling my patients that we were not doctors and they shouldn't have to pay fees, and they were referring many of my patients to orthopedic surgeons or other medical providers. This practice was happening to all podiatrists in Oregon and had been going on for a number of years prior to my arrival.
Fighting Back
In 1978, six Oregon podiatrists, with me as the chief party plaintiff, filed a federal antitrust suit against 11 Oregon insurance carriers we believed were demonstrating discriminatory practices in reimbursement toward podiatrists. The title of the case was Hahn v. Oregon Physicians Service, et. al. This suit was filed because we felt these insurance carriers combined or conspired in restraint of trade in violation of the Sherman Antitrust Act, 15 USC. Specifically, we contended that between 1974 and 1985, Oregon Physicians Service and other health insurance companies, as well as physician-controlled health care plans, excluded all podiatrists for member status and reimbursed non-member podiatrists at a lower rate than member physicians. The podiatrists contended that through these actions, the insurance companies unlawfully conspired to fix prices and boycott podiatrists in violation of the federal antitrust laws.
This lawsuit took a total of approximately 13 years to complete, and $1.6 million in attorneys' fees before eventually being settled by a federal settlement judge. During this case, we went through the Federal District Court for the District of Oregon, the Ninth Federal Circuit Court four times (case number, D.C. No. CV 78-0887 LE) and the U.S. Supreme Court. The Supreme Court declined to hear the case and it was remanded back to the District Court for the District of Oregon for re-examination and trial. I will not go through the complete discussion of this case, however, I would like to read the conclusion that Judge Malcolm Marsh, the federal judge for the Oregon District, rendered in October of 1990. The judge said, "I find that plaintiffs (podiatrists), have met their burden of providing that Oregon Physicians Service was involved in a conspiracy to fix prices and to effectuate a group boycott in violation of section 1 of the Sherman Act. I find that Blue Cross Blue Shield Oregon is liable for these antitrust violations based on its acknowledged successor liability for the acts of Oregon Physicians Service prior to its merger with the Oregon Physicians Service but that it is not liable for acts subsequent to the merger. A trial on the issue damage shall follow."
A federal settlement judge forced the defendants into a position of settlement, allowing them to avoid a tremendous loss of revenue from their discriminatory and criminal activity. The case was settled in favor of the podiatrists, with monetary and policy changes being awarded (Civil No. 78-0887-MA).
Shortly after the settlement, the insurance companies began to include podiatrists in their plans. However, with the advance of health maintenance organizations and independent practice associations and managed care organizations, the insurance industry began looking for ways to again discriminate against ancillary providers such as podiatrists. One of the methods they used was to restrict the number of podiatrists they would allow on a specific insurance plan in a specific geographic area. With the admission of a podiatrist, the plan would meet the letter of the law regarding the court settlement, however the spirit of the law was being broken by not allowing free access to membership in the insurance plans and in directly restraining free trade.
At this point in time, the insurance industry in the U.S. began to change dramatically by increasing premium rates to private party payers and companies that purchased group health insurance for employees. The formation of health maintenance organizations and preferred provider organizations began to gain popularity as a way of cutting the rising cost of health care claims.
Prior to this strong intervention of insurance companies' activities into the private practice arena, doctors and patients had good doctor-patient relationships. However, when insurance companies and employers changed policy or a company would discontinue coverage with one insurance company and start insurance coverage for their employees with another company, private practitioners would lose large groups of established patients as a result of these contract changes. Patient loyalty suffered as a result of these policies and malpractice claims increased. This was not only recognized in the podiatry profession, but also throughout the whole medical profession. Then came the malpractice crisis with many liability companies leaving the market and causing the physicians to scramble around and find new and more expensive liability coverage.
Currently, the reimbursement situation for many physicians in the U.S. is decreasing on a yearly basis as the cost of doing business is increasing each year. The federal government, through the centers for Medicaid and Medicare, has a fixed 4.4 percent yearly reduction in reimbursement to providers of services for Medicare and Medicaid. Each year, the various medical associations have to fight with lawmakers to coerce the Department of Health and Human Services to modify their reimbursement rates to allow for increases in the cost of doing business and the cost of procedures and overhead. Many times, small medical specialty groups within the large medical establishment failed to get these reimbursements and thus suffered a negative reimbursement when treating Medicare and Medicaid patients.
Physicians in the U.S. are the only learned profession whose income is regulated by state and federal government insurance plans and also by third-party payers such as insurance companies. Members of learned professions such as attorneys, engineers, architects and CPAs don't have watchdogs over them telling them how much they can make or how they should bill for their services. They (non-physicians) can charge whatever the market will bear for their services.
Editor's Note: Part 2 of Dr. Hahn's article, "Insurance Coverage: A Double-Edged Sword," will appear in the May issue of Naturopathy Digest.

About the Author: Dr. John Hahn is a graduate of Sacramento State University, California College of Podiatric Medicine and National College of Naturopathic Medicine. He has operated a private practice in Oregon since 1972, with special interest in podiatric surgery and podiatric sports biomechanics. He added naturopathy to his practice in 1993. He has lectured at various naturopathy and podiatric conventions and has been published in numerous journals. Dr. Hahn can be reached at .