Patient Options is bringing you the background of why chiropractors are on the Office of the Inspector Generals hit list for areas of fraud in government spending. In this multi-part series we summarize the report that came out in 2015 that guides their fraud investigation. In this post we bring you the background and basis of this investigation. The report is available for you to read here.

Medicare Coverage of Chiropractic Services

In 2013, Medicare paid $502 million for chiropractic services provided by 45,490 chiropractors to almost 2 million beneficiaries.1 Chiropractors treat patients for problems of the musculoskeletal and nervous systems, such as headaches or pain in the back, neck, or joints.2 However, Medicare limits coverage of chiropractic services to manual manipulation treatments to treat subluxation of the spine, which is the dislocation of one or more spinal bones.3 Medicare covers chiropractic services to improve function, which it refers to as “active treatment.”4,5 Medicare does not cover “maintenance therapy,” which is when further clinical improvement cannot be reasonably expected from ongoing treatment.6

Vulnerabilities Involving Chiropractic Services

The Office of Inspector General (OIG) has previously found vulnerabilities in Medicare payments for chiropractic services. OIG evaluations from 2005 and 2009 found that between 40 and 47 percent of all paid chiropractic claims were for maintenance therapy, which Medicare does not cover.7 Both reports found that when chiropractic care extends beyond 12 treatments in a year, it becomes increasingly likely that individual services are medically unnecessary and that chiropractors are often failing to comply with Medicare documentation requirements. In addition, an OIG audit from November 2013 found that Medicare inappropriately paid over $700,000 to a California chiropractor. These payments were for services that were medically unnecessary, incorrectly coded, undocumented, or insufficiently documented.8 Medicare fraud cases involving chiropractors have involved services not rendered, medically unnecessary services, duplicate claims, and “upcoding,” as well as fraudulently billing for other health care services, such as physical therapy.9 For example, in 2012, a chiropractor was sentenced to 2 years in prison for billing over $8.5 million to Medicaid and Medicare over 3 years for both chiropractic and physical therapy services.10 In 2014, another chiropractor was sentenced to 5 years in prison for billing false claims to Medicare and private insurance by using the names of other providers whom he employed to bill for services that he was not qualified to perform.11 Lastly, according to experts in chiropractic practice and fraud detection, other markers of potential chiropractic fraud exist. These include beneficiaries with claims from multiple chiropractors (indicating potential kickback arrangements or medical identity theft), chiropractic claims with same-day services for other types of therapy (indicating that services were potentially not rendered or were medically unnecessary), and chiropractors billing for more services per day than could have reasonably been provided.

Improper Payment Rate for Chiropractic Services

Chiropractic services have had the highest rate of improper payments among Part B services over the last several years, according to the Centers for Medicare & Medicaid Services’ (CMS) Comprehensive Error Rate Testing (CERT) program. In fact, from 2010 to 2014, the improper payment rate for chiropractic services increased from 43.9 to 54.1 percent while the overall improper payment rate for Part B services remained between 9.9 and 12.9 percent. The CERT program estimates payments that did not meet Medicare coverage, coding, and billing rules.12 CMS determines the improper payment rate by reviewing a sample of medical records. The five major error categories are: no documentation, insufficient documentation, lack of medical necessity, incorrect coding, and other (i.e., errors that do not fit into the other categories). For chiropractic services, the improper payment rate has increasingly resulted from insufficient documentation.13

Medicare Coverage Requirements for Chiropractic Services

Diagnosis codes for chiropractic services. Medicare requires that chiropractic claims have a primary diagnosis of “subluxation” for payment, but there is no diagnosis code that contains the word “subluxation.” CMS has instructed chiropractors to use the diagnosis codes that indicate nonallopathic lesions of the spine.14 Medicare Administrative Contractors (MACs) also issue local coverage determinations that define the appropriate diagnosis codes for chiropractic claims billed in their jurisdictions. Claims for chiropractic services must contain the required diagnosis codes.

Procedure codes for chiropractic services. Chiropractors use Current Procedural Terminology (CPT) codes to bill Medicare Part B.15 Medicare pays only for the three CPT codes for chiropractic manipulative treatment of the spine.16 These codes indicate the number of spinal regions treated. (See Table 2 for CPT codes and Figure 1 for spinal regions.)

Active Treatment Modifier. CMS requires that chiropractors use the Active Treatment (AT) modifier on a claim when providing a chiropractic service that is active/corrective therapy and not maintenance therapy, which Medicare does not cover.17 However, CMS acknowledges that “the presence of the AT modifier may not in all instances indicate that the service is reasonable and necessary.”18 Limits on covered services. CMS does not limit the number of chiropractic services that a beneficiary may receive over a given time period. However, some MACs have issued local coverage determinations that limit the number of chiropractic services per beneficiary per year or that require medical review for services that exceed a certain threshold.


All information retrieved from OIG report: OEI-01-14-00200