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Although one regional health maintenance organization is now offering employers a network of alternative medicine pro-viders, other managed care groups are unlikely to follow suit.

Furthermore, employers interested those alternative providers will pay more to provide coverage for their services.

Norwalk, Conn.-based Oxford Health Plans Inc. on Jan. 1 began offering employers in New York, New Jersey and Connecticut a health insurance plan rider to buy insured coverage for a network of alternative medicine providers. These include chiropractors, acupuncturists and-in Connecticut only-naturopaths.

Naturopaths are not licensed in New York and New Jersey.

Oxford declined to say how many employers have bought the alternative medicine rider.

"Our move into alternative medicine is based on both our own philosophies and on a recognition of what our members want," said Dr. Hassan Rifaat, Oxford's manager of alternative medicine. In a survey the HMO recently conducted, one-third of members said they used an alternative medicine provider in the past two years, he said.

Oxford is the nation's 10th-largest general service HMO, based on about 1.2 million employees and dependents in employer groups as of June 30, 1996 (BI, Dec. 27, 1996). The organization markets its health plans to employers in New York, New Jersey, Pennsylvania, Connecticut and New Hampshire.

The alternative medicine rider adds 2% to 3% to annual premiums for groups of 50 or more and 6% to premiums for groups of less than 50 people, according to Kerry MacKenzie, service manager of Oxford's alternative medicine department.

If an employer buys the alternative medicine rider, members of that group can visit an Oxford-certified chiropractor, acupuncturist and in Connecticut a naturopath without a referral from an HMO physician. The member would pay a copayment of $10 to $20 for each visit, depending on the level of subsidized coverage the employer bought, Ms. MacKenzie said. The copayment is generally comparable to those made for visits to conventional medical specialists.

Oxford has credentialed 800 alternative medicine providers who are listed in a directory. They include chiropractors, acupuncturists, naturopaths, massage therapists, registered dietitians, clinical nutritionists and yoga instructors.

There are no insured benefits for yoga, massage therapy, dietitians and nutritionists.

All alternative medicine providers in the Oxford network must meet certain criteria, including:

Being licensed in the state in which they practice, if licensing for the therapy exists.

Having graduated from a fully accredited college.

Demonstrating two years of continuous clinical experience.

Pursuing continuing education credits.

Carrying proper malpractice insurance.

Oxford HMO members who do not receive employer-sponsored alternative medicine coverage and those using services not covered by an employer-purchased health plan rider will pay a specially negotiated rate for alternative medicine services that is "generally lower than what someone would pay" outside of the network, Ms. MacKenzie said.

Employers interested in buying the alternative medicine rider clearly would be increasing their costs-something most employers do not want to do, commented Mary Case, a principal at The Kwasha Lipton Group in Fort Lee, N.J.

The fact that Oxford is charging employers an additional premium for alternative medicine coverage indicates that "either they believe it will increase costs or they're not going to take the risk that it'll be a cost-neutral thing," Ms. Case said. "You don't see them sticking their neck out and taking the risk cost-wise."

"I don't think too many employers are going to buy" the alternative med-icine rider because companies do not want to raise their costs, agreed Tom Ferguson, a consultant at William M. Mercer Inc. in Stamford, Conn.

While Oxford is the first HMO to offer a network of alternative med-icine providers, several other HMOs cover chiropractic services, and some also cover acupuncture.

Kaiser Permanente, the nation's largest HMO, covers chiropractic benefits in eight states.

In most cases, a member must be referred to a chiropractor by a Kaiser physician. However, some Kaiser plans offer a health plan rider employers can purchase, allowing members to go directly to a chiropractor who is a member of the American Chiropractic Network without a referral from a Kaiser physician.

Kaiser recently opened a chronic pain treatment clinic in Vallejo, Calif., that offers several alternative med-icine therapies, including acupuncture, acupressure, massage, nutritional counseling and relaxation techniques. Treatments like herbal med-icine, biofeedback and hypnotherapy will be added in the future, according to a spokesman. The HMO*covers all of these if a physician in the pain management program recommends them, said Dr. Mark Souza, an internist and acupuncturist who coordinates the HMO's physician interest group in alternative medicine for Kaiser's Northern California region in Walnut Creek, Calif.

Members are referred to the pain management program by their primary physicians.

Kaiser Permanente Northern California also covers acupuncture as a treatment for chronic pain for members not near the Vallejo clinic.

The Prudential Health Care Group in Roseland, N.J., covers various alternative medical therapies, including chiropractic, biofeedback, naturopathy and acupuncture for chronic pain, a spokesman said.

Members are referred to an alternative therapy practitioner by their primary care physician, he said. All alternative medicine providers must be licensed by the state in which they practice if such licensing is available.

"We do not formally track utilization of alternative therapies," he said. Anecdotally, though, there has been "no demand either on the employer side or the member side" for alternative therapies. Therefore, there is "no reason to set up a network."

"A lot of people are watching Oxford to see what success they have with this and what difficulties they have," said a spokesman for Humana Inc. in Louisville, Ky. Humana covers chiropractic services for its HMO members and has no plans to cover additional alternative therapies, the spokesman said.