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Supreme Court Decision Paves the Way for Acupuncture Parity

AAAOMONLINE is happy to repost this message from our friends at the California State Oriental Medicine Association (CSOMA). Much of it is California-specific, but that is only the example, the same premises may apply in your state as well. -ed.

U.S. Supreme Court Upholds Key Health Care Reform Elements 

What it all means for California licensed acupuncturists…

In a 5–4 split decision, the Supreme Court upheld almost all of the Obama administration’s heath care reform legislation—the Patient Protection and Affordable Care Act (PPACA)—including the law’s individual mandate requirements.

In short, this ruling, coupled with legislation currently under consideration in the California legislature, will likely mean that the vast majority of California’s 38 million residents will have a basic level of acupuncture coverage starting in 2014. In all likelihood, this base acupuncture coverage will be equivalent to the coverage currently provided under the Kaiser Small Group HMO plan, which provides for up to 20 covered acupuncture visits per year.

It is important to understand that each insurance plan will still establish its own reimbursement rate for acupuncture services as they currently do. The adoption of the Kaiser Small Group HMO plan as a benchmark does not mean that Kaiser’s reimbursement rates will be adopted. It simply means that the acupuncture coverage value to the consumer must be as high or higher than the coverage provided by the Kaiser Small Group HMO for almost all insurance plans.

Another key provision of the health care reform law is the "Non-discrimination in Health Care” language. This language will, starting in 2014, prohibit health plans from discriminating against providers who are providing services within their state-defined scope of practice. In other words, plans could no longer require that acupuncture services be rendered only by a medical doctor. There are a few exceptions detailed below.

If you want to dig into all of the policy details, we’ve provided them below.

Background on PPACA

The Patient Protection and Affordable Care Act (PPACA) of 2010 was enacted with the intention of ensuring that all Americans have access to quality, affordable health insurance.

As part of pursuing this goal, the law requires states to establish Affordable Insurance Exchanges ("Exchanges”). Created by each state, these competitive, market-based Exchanges, which launch in 2014, will allow individuals and small businesses to purchase basic health coverage.

Starting in 2014, all health plans offered in the individual and small group markets—including Exchange plans—and all state Medicaid plans must offer a comprehensive package of items and services known as Essential Health Benefits (EHB).

Under PPACA, the Secretary of Health and Human Services is charged with defining EHB categories through regulation, ensuring that the EHB floor "is equal to the scope of benefits provided under a typical employer plan.” 

By law, EHB must cover items and services in at least ten categories of care required by PPACA. Plans can modify coverage within a benefit category so long as they do not reduce the value of coverage. The ten categories include:

  1. Ambulatory patient services;
  2. Emergency services;
  3. Hospitalization;
  4. Maternity and newborn care;
  5. Mental health and substance use disorder services, including behavioral health treatment;
  6. Prescription drugs;
  7. Rehabilitative and habilitative services and devices;
  8. Laboratory services;
  9. Preventive and wellness services and chronic disease management; and
  10. Pediatric services, including oral and vision care.

Acupuncture services could potentially be included in several of these categories, including maternity care, mental health, rehabilitative services, preventative wellness, chronic disease management, and pediatric care.

As required by PPACA, in April 2011, the Department of Labor provided a report to HHS on employer-sponsored health insurance coverage. This report detailed the benefits typically covered by employers. At the request of HHS, the Institute of Medicine (IOM), in October 2011, provided its recommendations on a process for defining and updating the benefits that should be included in the EHB package. [Here's more on AAAOM's efforts to promote acupuncture as an EHB on a national basis and the letter that we sent to Kathleen Sebelius.]

Legal Challenge to PPACA

Following passage of PPACA, several court challenges were mounted by a number of organizations and states. Many of these legal challenges centered on the constitutionality of the individual insurance mandate contained in the law. Opponents claimed that Congress lacked the constitutional power to require individuals to purchase insurance or face a tax penalty.

Today, the Supreme Court voted 5-4 to uphold almost all aspects of the law.

HHS Proposal for Establishing EHB

On December 16, 2011, the Department of Health and Human Services issued anEssential Health Benefit Bulletin outlining proposed policies that would give states the flexibility to design EHB coverage options that meet their unique needs.

In the likely event that the polices proposed in the EHB Bulletin are adopted as regulation, each state will be required to choose one of the following benchmark health insurance plans:

  • One of the three largest small group plans in the state by enrollment;
  • One of the three largest state employee health plans by enrollment;
  • One of the three largest federal employee health plan options by enrollment; or
  • The largest HMO plan offered in the state's commercial market by enrollment.

The benefits and services included in the health insurance plan selected by the state would be the benchmark EHB package in that state.

EHB in California

California became the first state to enact a health benefit exchange under PPACA. In 2011, the state created the California Health Benefit Exchange (HBEX), an independent public entity within state government with a five-member board appointed by the Governor and the Legislature. On January 30, 2012, the HBEX submitted formal comments to HHS regarding the HHS Essential Health Benefits Bulletin (12/16/2012).

If the HHS EHB approach is finally adopted, the EHB benchmark plan options for California would include those outlined in the following tables:

Three largest state employee plans (CalPERS)
1. Kaiser Permanente HMOAcupuncture covered (No limit)
2. Blue Shield Basic HMOAcupuncture NOT covered
3. Anthem Blue Cross PERS Choice PPOAcupuncture covered (15 visits/year, combined with chiropractic)
Three largest federal employee health plan options
1. Blue Cross Blue Shield BasicAcupuncture covered (24 visits/year)
2. Blue Cross Blue Shield StandardAcupuncture covered (24 visits/year)
3. Government Employees Health Association StandardAcupuncture covered (20 visits/year)
Three largest small group plans
1. Anthem Blue Cross (Solution 2500) PPOAcupuncture covered (No limit)
2. Kaiser HMOAcupuncture covered (20 visits/year)
3. Blue Shield (Spectrum PPO Plan 1500 Value)Acupuncture NOT covered
Largest HMO
1. Kaiser Traditional HMOAcupuncture covered (20 visits/year)

Current California Legislation

Given that California’s small group plans are already required to comply with all state insurance mandates, the legislature has chosen to focus on these plans as they establish an EHB benchmark for California. This approach will greatly simplify the management of a benchmark plan as the benchmark would not need to be modified in order to conform to California’s many insurance mandates.

The California legislature has introduced two bills that, if passed, will ultimately define the EHB benchmark plan for the state—AB 1453 (Monning) and SB 951 (Hernandez). These bills would establish the Kaiser Small Group HMO plan as California's benchmark and would, by extension, require coverage for acupuncture services. Under this benchmark, required acupuncture coverage would be limited to 20 visits per year. However, plans purchased outside of the Exchange could establish higher limits or no limits.

These bills are still working their way through the legislative process and will need be signed by the Governor, but we anticipate that they will be signed into law sometime before October’s legislative deadline. CSOMA will provided a further update at that time.

Provider Non-Discrimination

Section 2706(a) of the Patient Protection and Affordable Care Act reads:

A group health plan and a health insurance issuer offering group or individual health insurance coverage shall not discriminate with respect to participation under the plan or coverage against any health care provider who is acting within the scope of that provider's license or certification under applicable State law. This section shall not require that a group health plan or health insurance issuer contract with any health care provider willing to abide by the terms and conditions for participation established by the plan or issuer. Nothing in this section shall be construed as preventing a group health plan, a health insurance issuer, or the Secretary from establishing varying reimbursement rates based on quality or performance measures.
 [emphasis added]

This provision of PPACA won’t start to take effect for another 18 months (January 1, 2014) at which point it will phase in over the following 12 months.

There are two important points to keep in mind:

  1. This provision doesn’t apply to grandfathered plans. A grandfathered plan is any coverage provided by a group health plan or a health insurance issuer in which an individual was enrolled on or before March 23, 2010.
  2. This provision doesn’t apply to plan years starting prior to 2014.Starting in 2014, it will take a full year for all non-grandfathered plans to be covered by this section of the law. The non-discrimination provision will only apply to plan years starting in 2014. For example, a plan year that starts in November won’t be covered by this provision until November 1, 2014.

This is a potentially very helpful provision for acupuncturists as it will likely end provider discrimination nationwide. But it is entirely unenforceable until 2014 and, even then, it will remain difficult to determine if the provision applies to a given plan.

Comments & Feedback

As always, we welcome and appreciate feedback. You may send comments to or contact CSOMA toll-free at 800.477.4564.

CSOMA. Your Partner in Practice.

PO Box 96503 #44114, Washington DC 20090-6503 | Toll-free Phone/Fax: 866-455-7999