PROFILE

ALTERNATIVE LINK: Why it Pays to Know Your ABC’s

By Catherine Saar

 ABC codes are 5-character alphabetic symbols that represent thousands of integrative health services delivered by acupuncturists, chiropractors, homeopaths, massage therapists and a long list of others. The concept was born in 1995, when Melinna Giannini, an insurance agent and third party administrator at the time, recognized the need for an NCQA-certified network of integrative healthcare practitioners.

 As she explored methods of contracting with such a network, Giannini discovered that codes that characterized integrative healthcare interventions were a critical, but missing element of the existing national health information infrastructure.  When she realized that neither the American Medical Association (“AMA”) nor the Health Care Financing Administration (now the “Centers for Medicare and Medicaid Services") were willing to create new codes for these services, she assembled a team, raised funds and created a new coding authority to build a HIPAA-compliant code set from scratch. The resulting company, Alternative Link developed ABC codes based on official terminology of the integrative healthcare professions.

 In 1999, Alternative Link created a non-profit foundation, The Foundation for Integrative Healthcare (“FIHC”) (www.fihc.org) to take over the planning, coordination, and continuous updating and expansion of the ABC codes as healthcare practices evolve.  Today, as FIHC’s strategic partner, Alternative Link offers a variety of information products and consulting services to allow the industry to capitalize on ABC codes.  They also work strategically to ensure that code functionality is made available nationwide.  

 Molina cites fast growing consumer interest in integrative medicine, along with the need for administrative simplification and costs savings for payors as some of the factors driving the increased demand for the company’s codes.  Large payors hope to displace higher cost conventional services with lower cost, but equally effective complementary or nursing services, she says. Employers can’t sustain the cost escalation in health premiums; so they are driving down premiums by using consumer driven health plans like Health Savings Accounts.  At same time, they also want to attract and retain high quality employees and assure increased productivity. They see CAM as an avenue to help achieve all of those endpoints. 

 According to Molina, to compete more effectively in the new environment of Health Savings and flexible spending accounts, integrative practitioners will need to run their businesses with the more precise information that ABC codes allow them to capture. 

“The shift to consumer driven health plans is empowering millions of Americans to have first dollar expenditure authority in their health care spending.  Under the tax code, acupuncturists, nurses, chiropractors and a variety of other health care givers who historically haven’t had access to that first dollar expenditure will now have access. And, if these practitioners are not prepared, they are not going to run effective practices either from a caregiving or from a financial perspective.   What will happen is the ones using these tools will emerge as powerful businesses in the communities they are serving because they will spend less time running the administrative and financial parts of their practices and will have more time to deliver care and generate health outcomes and revenues,” Molina commented.

Some practitioners are skeptical of using the codes, especially when their practices are cash pay or when their regional insurance companies or local PPO’s do not yet rely on or require ABC codes.  But Alternative Link counters that business minded caregivers can still use ABC codes as an effective means to track and analyze their business. In so doing, they can better manage their time, their resources and their business profitability in the following ways:

1)       To establish defensible fees for the services and supplies they deliver,

2)       To document patient encounters and better predict future demand for different types of care,,

3)       To identify the time and other resources needed to support that care  - resulting in better planning and budgeting

4)       To determine which types of care generate profits and losses,

5)       To address areas of care that do not result in favorable outcomes for patients or the healthcare practice, and

6)       To negotiate contracts with PPOs and other managed care organizations.

Additionally, an entire profession, like acupuncture for example, can use the codes to gain greater legitimacy and greater inclusion in original benefit plan design if its caregivers can report precise descriptions of care delivered and the associated costs.  This is especially true if there is evidence of more favorable economic and health care outcomes from that type of care.

In terms of increasing penetration of the codes, Molina says that Alternative Link is working strategically with scores of health plans, public and private, such that the transition to ABC codes is becoming more evident.  For example, Alaska Medicaid recently implemented ABC mental health care codes.  As more organizations adopt ABC codes, practitioners need to be ready to use them, and as more government and private sector employers want the data that comes from these codes, the company is seeing large private sector insurers and Medicaid programs beginning to make the switch. Alternative Link says a large variety of organizations are contacting them, including government and private sector health plans and employers, health care information technology companies, provider organizations like integrative clinics, practitioner organizations, and last but not least, industry development organizations, including benefit consultancies and academic research centers.

To learn more about Alternative Link and the assistance it offers to integrative healthcare practitioners interested in using ABC codes, visit their website at www.alternativelink.com 

Catherine Saar is the editor of the IMA Newsletter and earns her living through freelance writing, editing and marketing consulting.  You can reach her at catsaar@aol.com.