Kusserow on Compliance: OIG reports on improper chiropractic payments

According to the CMS Comprehensive Error Rate Testing (CERT) program, chiropractic services have the highest rate of improper payments among Part B services. Medicare covers chiropractic services to improve function, referred to as “active treatment,” but does not cover those services when further clinical improvement cannot be reasonably expected from ongoing treatment, which is referred to as “maintenance therapy.”

Medicare can pay only for medically necessary chiropractic services, which are limited to active or corrective manual manipulations of the spine to correct subluxations. Chiropractors must use the acute treatment (AT) modifier to identify services that are active/corrective treatment and must document services in accordance with CMS Medicare Benefit Policy Manual. When further improvement cannot reasonably be expected from continuing care, the services are considered maintenance therapy, which is not medically necessary and therefore not payable under Medicare.

Report

The Office of Inspector General (OIG) issued a new report where it analyzed paid claims for chiropractic services to identify chiropractors who exhibited questionable billing. The OIG also noted that in addition to the fraud cases, there are other vulnerabilities that exist relative to other Medicare services for beneficiaries receiving chiropractic services, such as physical therapy. The OIG has issued similar reports in the past with similar findings. In 2009, the OIG found that Medicare inappropriately paid 47 percent of all allowed chiropractic claims that met the study criteria and that many of the reviewed claims had multiple errors. It also found that efforts to stop payments for maintenance therapy had been largely ineffective and that chiropractors often do not comply with documentation requirements. 

Warning signs of inappropriate claims

  • Treatment suggestive of maintenance therapy;
  • Potential sharing of beneficiaries;
  • Potentially “up-coded” claims;
  • Unlikely number of services per day.

Employing these warning signals, the OIG identified chiropractors who received high amounts of questionable payments and determined their locations, past questionable payments, and whether their beneficiaries received same-day physical and occupational therapy. In addition, the OIG also identified inappropriate payments for claims not meeting certain Medicare requirements. The agency identified $76 million in Medicare payments that were questionable during the course of a year and found that half of the questionable payments were for claims suggestive of maintenance therapy. Two percent of chiropractors accounted for half of the questionable payments, provided more services to more beneficiaries than all other chiropractors, and were located in high-fraud areas. Beneficiaries of these chiropractors were more likely to have had paid claims for physical and occupational therapy on the same day than were beneficiaries treated by other chiropractors, especially in high-fraud areas. Furthermore, the OIG found that most of these chiropractors also had questionable payments in a prior year. Also, Medicare inappropriately paid $21 million for services lacking a covered primary diagnosis.

OIG proposed corrective actions by CMS

  • Establish stronger controls for active treatment to identify potential maintenance therapy.
  • Develop and use measures to identify questionable payments for chiropractic services.
  • Take appropriate action on the chiropractors with questionable payments.
  • Collect overpayments based on inappropriately paid claims.
  • Ensure that claims are paid only for Medicare-covered diagnoses.

The OIG also has posted an enforcement action against a chiropractor in Iowa who agreed to settle a case involving allegations of improperly billing the Medicaid system for medically unnecessary chiropractic procedures and for the treatment of conditions for which payment is not allowed, including bed wetting, colic, and ear infections.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.