Deeper Than the Headlines: Audit Results of Chiropractic Services

In calendar years 2014 and 2015, Medicare allowed payments of approximately $1.3 billion for chiropractic services provided to Medicare beneficiaries nationwide. Yet prior OIG reviews have found that Medicare inappropriately paid for chiropractic services that were medically unnecessary, incorrectly coded, or undocumented.

Given this history, the OIG performed an analysis of Medicare claims data for chiropractic services then selected an organization for review, based on the analysis. The organization chosen was Twin Palms Chiropractic Health Center, Inc. (Twin Palms), in Venice, Florida. The OIG’s analysis indicated that Twin Palms was among the top five chiropractors in Florida, based on three CPT codes billed to Medicare for chiropractic services. The OIG’s objective was to determine whether chiropractic services that Twin Palms billed were allowable under Medicare requirements. They published their findings of the review in August, 2019.

Chiropractic Services Background:

Medicare Part B covers chiropractic services provided by a qualified chiropractor. To provide such services, a chiropractor must be licensed or legally authorized by the State or jurisdiction in which the services are provided. Medicare requires that chiropractic services be reasonable and necessary for the treatment of a beneficiary’s illness or injury. And Medicare limits coverage of chiropractic services to manual manipulation (i.e., using of the hands) of the spine to correct a subluxation.

Chiropractors may also use manual devices to manipulate the spine. To substantiate a claim for manipulation of the spine, the chiropractor must specify the precise level of subluxation. Depending on the number of spinal regions treated, chiropractors may bill Medicare for chiropractic manipulative treatment using one of three CPT codes:

• 98940 (for treatment of one to two regions)
• 98941 (for treatment of three to four regions)
• 98942 (for treatment of five regions)

Medicare requires chiropractors to place the Acute Treatment (AT) modifier on a claim when providing active or corrective treatment for subluxation. Because Medicare considers claims without the AT modifier to be claims for services that are maintenance therapy, it will deny these claims. However, inclusion of the AT modifier does not always indicate that the service provided was reasonable and/or necessary.

Audit Results of Twin Palms:

The Medicare claims data that the OIG reviewed indicated that Twin Palms billed all of its chiropractic services using the AT modifier. Further, it billed the majority (97%) of its services using CPT code 98941, which had the second highest physician fee schedule amount among the three CPT codes covered by Medicare for chiropractic services.

For 2014 and 2015, Twin Palms received Medicare Part B payments of $711,742 for 22,967 chiropractic services provided to Medicare beneficiaries. OIG selected 100 services using a random sample. Twin Palms provided the OIG with copies of medical records as support for these services. In turn, OIG provided those copies to an independent medical review contractor to determine whether the 100 chiropractic services were allowable in accordance with Medicare requirements.

Some chiropractic services that Twin Palms billed were not allowable in accordance with Medicare requirements. Of the 100 chiropractic services in the OIG’s sample, 46 were allowable under Medicare requirements. However, the remaining 54 services were not. Those services were:

• 42 services were medically unnecessary
• 11 services were insufficiently documented
• 1 service was incorrectly coded

As a result, Twin Palms received $1,680 in unallowable Medicare payments. On the basis of their sample results, OIG estimated that Twin Palms received unallowable Medicare payments of at least $317,038 between 2014 and 2015. OIG concluded these unallowable payments occurred because Twin Palms did not have policies and procedures in place to ensure their chiropractic services billed to Medicare were medically necessary, adequately documented, and correctly coded.

Of the 42 services that were determined to be medically unnecessary. The results of the medical review indicated that these services did not meet one or more of the following Medicare requirements:

• Subluxation of the spine was not present or was not treated with manual manipulation or both (7 services)
• Manual manipulation of the spinal subluxation was maintenance therapy or was not appropriate for treatment of the patient’s condition or both (26 services)
• Manual manipulation of the spinal subluxation would not be expected to result in improvement within a reasonable and generally predictable period (9 services)

For example, Twin Palms received payment for a chiropractic service provided to a 76-year-old Medicare beneficiary. The independent medical review contractor found that the medical records did not support the medical necessity of the service because none of the Medicare requirements listed above had been met. Furthermore, the independent medical review contractor stated: “Absent detection of a subluxation on this date, no further improvement would be possible. . . A reexamination was completed absent any report of subluxations. . . or manipulation. . . on this date. . . The care was not medically necessary.”

The OIG results also outline documentation requirements and shared an example of a service that did not meet documentation requirements. Twin Palms received payment for a chiropractic service provided on May 28, 2015, to a Medicare beneficiary. After reviewing the medical records provided, the independent medical review contractor stated: “Chiropractic care on 5/28/2015 did not meet Medicare coverage criteria as billed . . . There was no report as to the levels of care/manipulation provided . . . . There is no documentation of the levels of care treated and therefore no support for the billed code (98941).”

OIG Recommendations

In concluding their report, the OIG recommended that Twin Palms:

• Refund the Federal Government the portion of the estimated $317,038 overpayment for claims for chiropractic services that did not comply with Medicare requirements and are within the 4-year claims reopening period.
• Exercise reasonable diligence for the remaining portion of the estimated $317,038 overpayment for claims that are outside of the 4-year claims reopening period to identify and return the overpayments in accordance with the 60-day rule, and identify any returned overpayments as having been made in accordance with this recommendation.
• Exercise reasonable diligence to identify and return any additional similar overpayments outside of the audit period, in accordance with the 60-day rule, and identify any returned overpayments as having been made in accordance with this recommendation.
• Establish policies and procedures to ensure that chiropractic services billed to Medicare are medically necessary, adequately documented in the medical records, and correctly coded.

If your organization is involved in providing chiropractic services, this audit report would be an important read for both your billing department and the rest of your compliance team.