OIG Report: Medicare Paid out Millions in Improper Payments to Chiropractors

A report issued this month by the Office of Inspector General (OIG) finds that about half of Medicare payments made for chiropractic services between 2010 and 2015 were improper – that is they either were not medically necessary, not billed properly or not sufficiently documented.

The report, titled “Medicare needs better controls to prevent fraud, waste, and abuse related to chiropractic services,” notes that despite past audits, investigations, evaluations and legal actions relating to questionable billing for chiropractic services, The Centers for Medicare & Medicaid Services (CMS) has failed to implement the OIG’s recommendations and controls designed to prevent such fraud, waste and abuse.

CMS’ Comprehensive Error Rate Testing Program, which measures improper Medicare fee-for-services payments each year, identified chiropractic services as having the highest improper payment rate among Medicare Part B services from 2010 to 2015. That rate ranged from 43.9 percent to 54.1 percent, with estimated overpayments ranging from $257 million to $304 million!

The majority of improper payments identified by the OIG were for services that Medicare considers medically unnecessary including maintenance therapy, which is not covered by Medicare.

Although Medicare covers chiropractic services for active/corrective treatment for subluxation of the spine, it does not cover maintenance therapy – i.e. services designed to prevent disease, promote health, enhance the quality of life, or to maintain/prevent deterioration of a chronic condition. Medicare requires chiropractors to place the Acute Treatment (AT) modifier on a claim when providing active/corrective treatment for subluxation. Despite this requirement, the OIG found that “almost all claims for chiropractic services had the AT modifier regardless of whether the services were for active/corrective treatment for subluxation.”

In addition, Medicare requires chiropractors to enter on a claim the date of initial treatment as a way to affirm that all required documentation is being maintained. However, CMS found that “chiropractors included the initial treatment date on claims to ensure that the claims would get paid regardless of whether the services were adequately documented.”

The report comes at a time when health professionals and lawmakers are encouraging healthcare providers to consider chiropractic and related services as an alternative to opioids when treating chronic pain.

OIG has been making recommendations to CMS dating back more than a decade on what it can do to prevent fraud and abuse by those providing chiropractic services. The report notes, however, that many of those recommendations have gone unheeded.

For example, in 2006, OIG recommended a new modifier for chiropractic claims be implemented that indicates the start of a new treatment episode, so contractors could identify aberrant treatment patterns through claims data. As of January 2017, CMS had not implemented such a modifier, OIG noted.

“Our work shows that if CMS established a threshold for the number of chiropractic services beyond which medical review would be required for additional services, Medicare could save millions of dollars by reducing payments for medically unnecessary services without compromising beneficiary access to reasonable and necessary services,” OIG stated.

In 2013, as part of a nationwide review, OIG recommended CMS improve its educational efforts aimed at chiropractors on Medicare coverage requirements and the proper use of the AT modifier to ensure that only medically necessary chiropractic services were billed to Medicare. Although CMS produced a training video, OIG noted it had been viewed fewer than 9,000 times – a low number considering that more than 41,012 chiropractors submitted claims for services in 2016.

“CMS has taken actions to address program vulnerabilities in chiropractic services, but these actions have not always been effective,” OIG noted in the report.

The report, once again, makes suggestions that CMS should follow to prevent future fraud and abuse. Among those recommendations, CMS should:

  • Work with its contractors to educate chiropractors on the training materials that are available to them.
  • Educate beneficiaries on the types of chiropractic services that are covered by Medicare, inform them that massage and acupuncture services are not covered by Medicare, and encourage them to report to CMS any chiropractors who are providing non-Medicare-covered services
  • Identify chiropractors with aberrant billing patterns or high service-denial rates, select a statistically valid random sample of services provided by each chiropractor identified, review the medical records for the sampled services, estimate the amount overpaid to each chiropractor, and request that the chiropractors refund the amounts overpaid by Medicare.
  • Establish a threshold for the number of chiropractic services beyond which medical review would be required for additional services.

While CMS agreed with the first two recommendations, it did not agree with the third and fourth. Instead, the agency said it would share the recommendations with its contractors as they develop their medical review workloads. In other words, implementing such recommendations would be left up to its contractors.

The OIG got in the final word:

“We strongly encourage CMS and its contractors to take actions to implement our third and fourth recommendations. Implementing these recommendations would not only help Medicare reduce fraud, waste, and abuse related to chiropractic services, but would also help CMS meet its goal of protecting the Medicare Trust Funds.”

The Health Law Offices of Anthony C. Vitale in matters relating to fraud, abuse, overbilling and recoupment. Contact us for additional information at 305-358-4500 or send us an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.

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The Health Law Offices of Anthony C. Vitale