OIG Auditor’s report: Summary of findings on DC payments

A Chiropractic Economics Staff Report.

In a report dated October 2016, the U.S. Department of Health and Human Services Office of Inspector General (OIG) announced that “hundreds of millions in Medicare payments for chiropractic services did not comply with Medicare requirements.”

Based on the OIG’s review of payments to chiropractors, it was determined that 82 percent of payments made in calendar year 2013 were unallowable. As Medicare Part B paid out nearly $439 million for chiropractic services, during the period under review, the office estimates that $358.8 million should have been disallowed. The report notes that these overpayments were made “because CMS’s controls requiring chiropractors to include the AT modifier and initial treatment date on claims were not effective in preventing payments for medically unnecessary chiropractic services.”

Kathy Mills Chang, a certified medical compliance specialist and certified professional chiropractic coder (MCS-P and CPCC), says, “The challenge is not the AT modifier or the updating of ‘box 14’ with the new initial treatment date of an episode. The real problem is the DC understanding which care is ‘medically necessary’ according to Medicare’s definition and which care would be defined as ‘maintenance care’ per Medicare’s definition. The care is actually not ‘unnecessary’ but perhaps better defined as ‘not medically necessary’ and therefore, doesn’t qualify for reimbursement from Medicare but rather is the patient’s financial responsibility.”

Specific problems identified by the Medicare administrative contractors (MACs), who process Part B claims for CMS, fell mostly into the following categories:

1. Maintenance therapy. CMS guidelines state that acute subluxations of the spine may require up to three months of active treatment. Treatments beyond this time period are considered maintenance therapy, which is not a service covered by Medicare Part B. According to Chang, these are called “screens,” whereby Medicare sets internal parameters for certain diagnosis codes to identify when most cases should be complete. “This alerts them that any care beyond that might be approaching maintenance care, and therefore, the provider may receive a request to justify with additional documentation why this case requires more care than another,” Chang says.

2. Failure to document medical necessity. Even though patient records were submitted with the AT (acute treatment) modifier, upon investigation it was determined that the treatments provided did not warrant this coding. “This is truly the No. 1 problem with documentation and Medicare in our profession. It’s that the doctor may consider care ‘medically necessary’ and therefore coverable, so they bill Medicare with an AT modifier indicating active treatment. However, the notes do not warrant active treatment and fail to establish why the care meets Medicare’s definition.”

3. Excessive treatments. A 2005 OIG report determined that a typical patient presenting for acute treatment requires approximately no more than 12 treatments. Although at this time CMS does not specify a maximum number of treatments, any number more than 12 is considered to be likely medically unnecessary, and after 24 treatments that likelihood is extremely probable, according to the report.

4. Unnecessary services. Despite the education for chiropractors available on CMS and MAC websites, chiropractors were found to be billing for services not covered by Medicare. According to Chang, the training on these websites is insufficient with respect to chiropractic services, “and various consultants train these concepts differently.”

Possible remediation of OIG report

The Office of Audit Services (OAS), which prepared the report, recommends that “strong controls” be enacted to prevent payments for medically unnecessary chiropractic treatments. Specifically, the office suggests that a limit on the number of treatments would have sufficed to prevent the majority of the overpayments in question, and mentions an annual number of 30 visits per patient as a target. In the event a chiropractor exceeded that number of treatments with a given patient per annum, CMS would need a system to identify such services for additional review.

In response, CMS balked at this suggestion, citing unspecified obstacles that would prevent the implementation of such a system at this time.

The report stressed the need for additional training and education for chiropractors so that the AT modifier is used correctly.

And finally, in the event a certain limit on the number of services CMS will allow per patient cannot be arrived upon, the report recommends a system for tracking the date a patient begins an episode of care, and flagging for review any treatments that exceed a reasonable timeframe (e.g., 90 days).

“Certain MACs have listed 24 annual visit allowances that serve as a screen,” Chang notes. “At least these doctors know how to stay within the lines and when to make the patient financially responsible for the adjustments as maintenance.”

In communication with the auditors, CMS concurred that setting a limit on the number of chiropractic services is desirable, but putting in place a system to identify cases that exceed that number is a step requiring a National Coverage Determination. CMS also agreed that additional clarification on the proper use of the AT modifier will reduce the incidence of overpayments for chiropractic services and will work through “local educational activities” to realize that objective.

For doctors of chiropractic who would like to review the essentials of compliant coding immediately, the American Chiropractic Association offers a training module titled “Medicare Documentation: Just Tell Me What to Do!” This training is designed for practicing doctors, new practitioners, and students, and offered for a small fee. For more in-depth training on Medicare compliance and billing, professional consultants are available in the chiropractic industry.

It should be noted that the OAS only audited a total of 105 billings to CMS totaling $2,447, and extrapolated this out to the $359 million figure cited in the report. Brad Cost, CEO of Infinedi Electronic Data Interchange, notes that the statistical relevance of even a small data set is important in today’s world as it defines the government’s perception of chiropractic, and correct coding is essential now more than ever before. And Chang sums up the issue in two points: incorrect documentation and lack of understanding of the definition of medical necessity versus maintenance care.

Ultimately, while CMS may have found the contested claims to have not established medical necessity, this may have been largely due to documentation inadequacies, and not evidence of intentional misconduct.