American Specialty Health Plans Files for Acupuncture HMO; Introduces Name Change

SAN DIEGO,CA (May 19, 1997)-- American Specialty Health Plans (ASHP), formerly the American Chiropractic Network Health Plan, announced today that it has filed a notice of material modification with the California Department of Corporations (DOC) to become licensed as a specialized health care service plan for acupuncture. ASHP believes it is the first specialized or full service health plan in California to file an acupuncture benefit with the DOC. Upon approval, ASHP will provide acupuncture benefits throughout the entire state of California. It hopes to receive DOC approval of its filing in the summer or fall.

In 1994, the company pioneered the specialty HMO field by becoming California's first licensed chiropractic HMO.

"Moving into other areas of specialty care, such as acupuncture, is a natural evolution for our company," said ASHP's president George DeVries. "Over the past two-and-a-half years since we obtained our Knox-Keene license as a specialized health care service plan for chiropractic, we have demonstrated the success and effectiveness of our systems in chiropractic managed care. We are now ready to take our managed care systems a step further by applying them to acupuncture."

DeVries said that the name change to American Specialty Health Plans reflects the company's expansion from its single specialized area of chiropractic. "ASHP plans to move forward as a managed care company for multiple types of specialized health care services," he said.

DeVries believes there is a growing demand for acupuncture and chiropractic services among members and employers. "As we were developing our acupuncture product, we solicited the interest of employers, insurance brokers, employee benefit consultants and full-service HMOs in this product. We received a very positive response across the board," he said.

"Consumers are demanding more choice and flexibility in their health care options. I believe that acupuncture will become a standard benefit rider within managed care over the next few years" DeVries added. "We've positioned ourselves to take a leadership role in this development."

Once ASHP is approved by the DOC, California employers will have the option to add an acupuncture benefit rider to their existing HMO medical plan in the same manner they currently add dental, vision, mental health or chiropractic benefits.

Acupuncture Benefit Features
Under the proposal filed by ASHP, enrollees in its acupuncture benefit may go to an ASHP participating acupuncturist on a "direct-access" basis, without a referral from their primary care physician. Enrollees will also have "open access" to any participating acupuncturist and will not be required to select an ASHP participating acupuncturist at open enrollment. They may pick any participating acupuncturist at the point of service and may change participating acupuncturists at any time.

"The direct-access and open-access features provide flexibility and convenience for members, and put them in control of their health care resources," DeVries added.

ASHP has already contracted over 700 acupuncturists throughout the state to participate in its network and to abide by ASHP's quality management and utilization management programs. All clinical decision-making and authorization of acupuncture treatment programs will be provided by California licensed acupuncturists. "We will have acupuncturists on staff and under contract who will provide peer review," DeVries said.

ASHP currently has a staff of 11 in-house case managers who are California-licensed chiropractors. They provide peer review for ASHP's chiropractic services.

The acupuncture benefit plan will be offered to California employers and Taft-Hartley trust funds. Benefit plan designs will vary in copayment amounts ($5, $10 or $15) and annual office visit limits (20, 30 or 40 office visits per year).

ASHP also expects to contract with California HMOs, which will offer the acupuncture benefit rider to covered groups on an optional basis.

ASHP currently covers over 1.7 million members under its chiropractic HMO, making it the fourth largest specialty HMO in the state out of roughly 60 dental, vision, mental health, chiropractic and pharmacy HMOs. It ranks only behind Delta Dental, Vision Service Plan and WellPoint Pharmacy Plan. Seven of California's 10 largest HMOs offer ASHP's chiropractic benefit rider to employer groups. Contracted HMOs include Aetna Health Plans, Blue Cross of California, Blue Shield HMO, Health Net, Kaiser Permanente, Metra Health, PacifiCare, Prudential HealthCare and United HealthCare among others. ASHP's enrollment grew by 57 percent last year.

Dr. Chen Heads Quality Improvement Committee
To establish quality standards in the delivery of acupuncture services, ASHP has developed an acupuncture quality improvement program, which includes a 15-member Quality Improvement Committee. The committee draws on leaders in the field of acupuncture throughout California. Heading the committee is ASHP's director of acupuncture services, David Chen, OMD, LAc.

Dr. Chen is the clinic director of the California Pain Control Clinic in Whittier, California, and a member of the Acupuncture Research Institute of Hollywood Presbyterian Hospital. He previously served on the Board of Medical Quality Assurance of the State of California as a chief examiner of the Acupuncture Examining Committee. He has also served as the chairperson of the Acupuncture Committee of the State Board of Medical Examiners.

ASHP Affiliate Offers Acupuncture PPO
While ASHP awaits DOC approval for the acupuncture filing under its HMO license, ASHP's affiliate, the American Specialty Networks (formerly the American Chiropractic Network Southwest, Inc.), plans to introduce a direct-access, open access acupuncture network/PPO product in July.

American Specialty Networks (ASN) provides utilization review, claims processing, quality improvement, member services and other services for self-funded employers, Taft-Hartley trust funds and other groups. ASN currently covers approximately one million members in California under its chiropractic PPO programs.

The 700-plus licensed acupuncturists who have contracted with ASHP will also participate in ASN.

ASHP and ASN Provider Credentialing
ASHP implements those credentialing standards and processes established by the National Committee for Quality Assurance (NCQA) that apply to chiropractic and acupuncture providers. The ASHP credentialing process includes the verification of professional license, malpractice history and unsanctioned participation with MediCal; a medical records audit; and an on-site office evaluation. All acupuncture providers will be credentialed and will need to meet these and other criteria.

"We have established high standards for credentialing our chiropractic providers and will also apply high standards with our acupuncture providers," DeVries said.

American Specialty Health Plans and American Specialty Networks together have more than 2.7 million members in California. ASHP has statewide networks of 850 clinical and radiological labs, over 1,300 chiropractors and over 700 acupuncturists.