There are over 50 chiropractic managed care organizations (MCOs) in the United States, most of which operate on a regional/local basis, or within one state.
Many chiropractic MCOs are the response of a few DCs banding together to combat the erosion of their patient base. Other MCOs include elaborate treatment protocols, well-funded marketing efforts, and professional management. But chiropractic is still behind the curve when it comes to managed care integration. "Chiropractic tokenism" continues to plague the profession's efforts towards being included in managed care.
In the midst of all this comes the National Chiropractic Mutual Insurance Company (NCMIC) with almost 25,000 policyholders and sizable financial reserves. Their foray into managed care has been heralded by the purchase of Managed Chiropractics, Inc. as a wholly-owned subsidiary.
Managed Chiropractic is a national chiropractic MCO with a network of over 2,900 DCs and contracts covering nearly 20 million lives. Some of these contracts are with well-known national preferred provider organizations (PPOs) including USA Health Network, Admar Corporation, and Aetna Health Plans.
DC asked NCMIC President Louis Sportelli, DC, about the company's new venture into managed care.
DC: Why did NCMIC decide to enter the managed care arena?
Dr. Sportelli: NCMIC retained consultants who came to the conclusion that NCMIC should enter the managed care arena, as well as several other diversification options. A survey of our policyholders indicated that the number one problem for our policyholders was managed care. The board and senior management concluded that NCMIC, as a national player, could positively impact the current managed care dilemma facing practitioners.
DC: What does NCMIC hope to accomplish?
Dr. Sportelli: We are confident that a national network with staying power can negotiate from a position of strength with employers directly, MCOs, or other large insurance carriers, to position the chiropractic "carve out" in such a way as to remove many of the barriers currently facing the doctor of chiropractic. We hope to be able to influence the reimbursement issues, ease the oppressive treatment protocols currently mandated by some IPAs, and make the process more provider friendly, which will result in a significant increase in patients utilizing chiropractic service. Ultimately, with proper management, patient utilization will increase.
DC: Since not all policyholders will be able to become members of your national IPA panel, does this constitute a conflict of interest for NCMIC?
Dr. Sportelli: Not at all. As you know, there are major antitrust questions regarding the legality involved in the area of network size. We have been in discussions with one of the nation's largest law firms on this very issue. The response to date is as follows:
"Due to antitrust restrictions, it is anticipated that the NCMIC's network providers will need to be restricted to a specific percentage of the chiropractic providers in the relevant geographic markets in which the network will operate. Since NCMIC is going to be a national IPA, it may remain within one of the so-called 'safety zones' as defined in the Joint Federal Trade Commission -- Department of Justice Healthcare -- Antitrust Guidelines, Statement 8 ... then no more than 30% of the providers in that specialty in a particular local geographic market could participate in the network. The antitrust issues have been a concern for every entity, because of the horizontal price-fixing by the providers and creation of provider entities that represent such a large percentage of the providers in a given relevant geographic market that their entity secures sufficient market power that the existence and operation of the combination is likely to result in enhanced prices in the particular service to consumers or bu yers of the service."NCMIC will be hampered by existing law to become larger than 30% of any geographic market or be exposed to antitrust violations. Until and unless these laws are changed by statutory legislation (federal or state), NCMIC will be forced to comply with the requirements of the Federal Trade Commission. There will be no conflict of interest by NCMIC because the law currently defines what we will or will not be able to do as a national chiropractic IPA.
DC: What other points would you like to make about this acquisition?
Dr. Sportelli: The acquisition of Managed Chiropractics is one piece of the overall strategy of NCMIC. We will be looking to purchase one or two additional networks which have solid infrastructure and current contracts which have the potential for national expansion. Managed Chiropractics had two contracts with the potential of 19 million covered lives. Additionally, they were involved in negotiating for several other sizable contracts. There will be many things which will need to be changed in the current Managed Chiropractics network, such as the credentialing process for the network providers, the manner in which the providers are prospectively reviewed, and other items which will need to be finalized. The acquisition, however, was made because it offered national prospective and immediate national presence in the managed care arena.
DC: What other events/developments can be expected from NCMIC?
Dr. Sportelli: Other developments from NCMIC will be the development and introduction of a network mechanism to communicate with all our policyholders. Currently there are software packages being investigated to provide our policyholders with the potential to obtain data and communicate with NCMIC to help build the database necessary to be meaningful to national contracts. Additionally, there will be some credentialing process in place which will then permit doctors to be part of the new national network on a first come/first served (meeting the credentialing) basis. Additionally, this new national IPA network will be a totally separate subsidiary of NCMIC. NCMIC will not mandate anything to its policyholders. What we will attempt to do, however, is to operate the new managed care IPA in a manner to provide profits back to NCMIC so that every policyholder will receive the benefit of the dividends which the company can now return to each of its policyholders under the newly developed guidelines for return of dividends. This should encourage our policyholders -- those who participate in the network and those who do not -- to view the new NCMIC venture as a positive way for each policyholder to benefit from the managed care network individually and collectively.
DC: How will the chiropractic profession get information about the new IPA?
Dr. Sportelli: NCMIC policyholders will get direct communications from NCMIC. The remaining practitioners will get periodic mailings and information via the chiropractic press. We anticipate that it will take at least six to nine months (hopefully sooner) to get the new organization up and running and the profession can look for information at that time.
DC: Thank you, Dr. Sportelli.
With this official, large-scale entrance into managed care, it is certain that chiropractic will be making greater inroads into what has largely been a closed world to the profession.
Editor's note: NCMIC's mailing address is P.O. Box 9118, Des Moines, IA 50306-9118; tele: (515) 222-1736.