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Chiropractic Audit - Over $350 million in unallowable payments

Monica Mejia, an Assistant Regional Inspector General for the Office of Audit Services in Los Angeles, is interviewed by Tyler Daniels, a public affairs specialist in Washington DC.

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[Tyler Daniels] The government overpaid over $350 million for unallowable chiropractic services, an OIG Audit finds. That's what we're talking about today, I'm Tyler Daniels and welcome to the HHS OIG's podcast.


Medicare, which is a federal health insurance program, covers chiropractic services provided by a qualified chiropractor. But Medicare requires that these services be reasonable and necessary for the treatment of a beneficiary's illness or injury.

A recent OIG audit estimated that $358.8 million, or approximately 82 percent, of the $438.1 million paid by Medicare for chiropractic services was unallowable. These overpayments occurred because the Centers for Medicare and Medicaid Services, or CMS, which administers Medicare, did not have controls that were effective in preventing payments for medically unnecessary chiropractic services.

For more on this I spoke with Monica Mejia, an Assistant Regional Inspector General in Los Angeles.

Monica, what did the OIG audit find?

[Monica Mejia] We found that most Medicare payments for chiropractic services provided in 2013 did not comply with Medicare requirements. We selected a statistically valid random sample of 105 chiropractic services, and found that 11 were allowable in accordance with Medicare requirements. The remaining 94 services were not allowable because they were medically unnecessary.

Based on the results of our sample, we estimated that $358.8 million, were paid by Medicare for chiropractic services were unallowable. That's 82 percent, of the $438.1 million that Medicare paid that year.

[Tyler Daniels] Now there are several reasons why the services were considered unallowable, what are they?

[Monica Mejia] One of those reasons was because subluxation of the spine was not present or was not treated.

[Tyler Daniels] And real quick you mentioned subluxation. What is that?

[Monica Mejia] That's when spinal bones are misaligned.

[Tyler Daniels] Okay.

[Monica Mejia] Other reasons were because manual manipulation of the spinal subluxation was maintenance therapy, was not appropriate for treatment of the patient's condition or would not be expected to result in improvement within a reasonable and generally predictable period of time. Another notable finding from this review is that the payment error rates increased as the number of services provided to a beneficiary increased.

[Tyler Daniels] Why did OIG conduct this audit?

[Monica Mejia] We'd issued several reports on chiropractic services, which found that Medicare had made improper payments for these services. For example, a 2005 report found that as chiropractic care for a beneficiary extended beyond 12 treatments in a year, it became increasingly likely that individual services were medically unnecessary, In addition, four recent reviews of individual chiropractors found that Medicare made improper payments for services that were medically unnecessary, incorrectly coded, insufficiently documented, or not documented at all. We estimated that Medicare paid $2.3 million for these unallowable services. So we conducted this nationwide review to determine whether these issues were still occurring throughout the nation.

[Tyler Daniels] And how did you go about conducting the audit?

[Monica Mejia] We included in our review more than 17 million chiropractic services that were provided in 2013. We sorted the services by beneficiary and by date of service. And then we numbered each of the services� the services for each beneficiary in chronological order. Then we divided the services into three groups. Group 1 contained the 1st through 12th service, group 2 contained the 13th through 30th services, and group 3 contained the 31st and subsequent services. Then we selected a random sample of 35 services from each group for a total of 105 services.

We then obtained the documentation from the chiropractors that performed the selected services and provided this documentation to an independent medical review contractor to determine whether the services were allowable in accordance with Medicare requirements.

[Tyler Daniels] How did CMS respond to the audit findings?

[Monica Mejia] In written comments on our draft report, CMS concurred with two of the four recommendations that we made.

One recommendation that they concurred with was our recommendation to determine a reasonable number of chiropractic services that are necessary to actively treat spinal subluxation and implement a system edit to identify services for review in excess of that number.

They also concurred with our recommendation to improve education of chiropractors on Medicare coverage requirements for chiropractic services and the proper use of the AT modifier to ensure that only medically necessary chiropractic services are billed to Medicare.

However they didn't concur with our recommendation to determine whether there should be a limit for the number of chiropractic services that Medicare will reimburse; and if so, take appropriate action to put that limit into effect, and implement a system edit to disallow services in excess of that limit.

In addition, CMS did not comment on the fourth recommendation in our draft report: which was to establish a more reliable control for identifying maintenance therapy.

[Tyler Daniels] Why didn't CMS comment?

[Monica Mejia] They informed us that it had not responded because it responded to the same recommendation in a prior OIG report. In that prior report, CMS did not concur with the recommendation, and cited significant obstacles to developing such a control. As a result, we refined the fourth recommendation to specifically address CMS's comments so that fourth recommendation was now to specifically identify significant obstacles to developing a more reliable control for identifying maintenance therapy and work to establish such a control.

[Tyler Daniels] Monica Mejia, thank you for your time. Monica is an Assistant Regional Inspector General in Los Angeles. And I'm Tyler Daniels. Thanks for listening.