Alternative Care PPO Forms Alliance With Health Plan.

As the popularity of alternative medicine grows, a preferred-provider organization in Oregon offering such treatments has formed an alliance with Health Net Oregon, a health plan in the Northwest. Under the alliance, Complementary Healthcare Plans, the Portland, Ore.-based PPO will offer credentialed provider networks for acupuncture, massage therapy, chiropractic and naturopathic medicine through the health plan as a core benefit for all members.

Since 1989, the PPO has offered a self-referred, direct-access product with no pretreatment authorization required. The organization has about 500 to 550 providers and expects to have by this month 330,000 prepaid covered lives, President and Chief Executive Officer Richard Brinkley said. He said another 600,000 are expected to be under contract with managed-care and preferred-provider health plans but not prepaid. Prepaid contracts allow for self-referral by plan members and direct access to the practitioners.

Brinkley said the PPO is growing rapidly. "We have credentialing criteria that exceeds that of the National Committee on Quality Assurance, and we use three screens in choosing practitioners that look at their economic profile, general office mechanics and a site audit at each practitioner's office."

Prices paid by mainstream plans to Complementary Healrhcare Plans are based on the benefit design, utilization rates (historical or assumed), the penetration of the population and the fee-schedule structure that the health plan uses, Brinkley said. The size of the insured population is also a factor. "If you're covering 500 lives, the cost for benefit design is a lot more than if you're covering 50,000 lives, because you can spread the risk over a larger group," he said.

Brinkley said the company's model is applicable to any area of the country but is especially suitable for the Northwest, "because there's a culture among providers here that allows it to work."

The model would be more difficult to implement in high-density population areas, because historically providers there have had contentions with health plans. "We're very much value-driven," he said.

"We lay out our expectations of practitioners up front, but we also tell them what they can expect from us," Brinkley said. The organization's turnover rate has been less than 2% over its 10-year history, and provider complaints are "virtually nil," he said.

The company is the only complementary health-care organization that has been recognized by the American Association of Preferred Provider Organizations, based in Washington, D.C., said Brinkley, who serves on that group's board of directors.