Department of Health and Human Services
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
I   M
NAPPROPRIATE  EDICARE 
 
P  
  AYMENTS FOR 
 
C S  
HIROPRACTIC  ERVICES 
 
 
 
 
 
 
 
 
Daniel R. Levinson  
Inspector General 
 
May 2009 
OEI-07-07-00390   
Office of Inspector General 
http://oig.hhs.gov 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 
audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying 
out their respective responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and 
mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud, waste, or abuse and promoting 
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of fraud and misconduct related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI utilizes its resources 
by actively coordinating with the Department of Justice and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to criminal 
convictions, administrative sanctions, and/or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support for OIGs internal operations.  OCIG represents OIG in all civil and 
administrative fraud and abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program guidance, publishes fraud alerts, and provides other 
guidance to the health care industry concerning the anti-kickback statute and other OIG 
enforcement authorities.   
   
E X E C U T I V E   S U M M A R Y  
 E X E C U T I V E   S U M M A R Y  
OBJECTIVE
 
To determine the extent to which: 
(1)  chiropractic claims allowed in 2006 for beneficiaries receiving 
more than 12 services from the same chiropractor were 
appropriate,  
(2)   controls ensured that chiropractic claims were not for maintenance 
therapy,  
(3)   claims data can be used to identify maintenance therapy, and  
(4)   chiropractic claims were documented as required. 
BACKGROUND 
As required by the Social Security Act, Medicare pays only for medically 
necessary chiropractic services, which are limited to active/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 the Centers for Medicare & Medicaid 
Services (CMS) Medicare Benefit Policy Manual (the Manual) when 
submitting claims.  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.   
We identified allowed claims with the AT modifier for beneficiaries with 
more than 12 claims from the same chiropractor in 2006.  We then 
contracted with a medical review contractor to review medical records 
from a simple random sample of 188 claims.  For each treatment 
episode, the medical records were reviewed to identify the initial visit 
and subsequent visits (if relevant) to determine whether each sampled 
claim was active/corrective treatment or maintenance therapy, the 
extent to which chiropractors supported their use of the AT modifier 
with proper documentation indicating active/corrective treatment, 
whether claims were coded properly, and whether documentation met 
the Manual requirements.   
FINDINGS 
Medicare inappropriately paid $178 million for chiropractic claims in 
2006, representing 47 percent of claims meeting our study criteria.   
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E X E C U T I V E   S U M M A R Y  
In 2006, Medicare inappropriately paid $178 million (out of 
$466 million) for chiropractic claims for services that medical reviewers 
determined to be maintenance therapy ($157 million), miscoded 
($11 million), or undocumented ($46 million).  These claims represent 
47 percent of all allowed chiropractic claims that met the study criteria.  
Claims representing $36 million had multiple errors.   
Efforts to stop payments for maintenance therapy have been largely 
ineffective.  CMS, carriers, and program safeguard contractors (PSC) 
use a number of strategies to deter inappropriate payments for 
maintenance therapy, including use of the AT modifier to indicate 
active/corrective treatment, provider education, frequency-based control 
edits (caps), and focused medical review.  Despite these efforts, carriers 
and PSCs continue to report high errors for chiropractic claims.  Carrier 
staff, PSC staff, and medical reviewers for this study agreed that the 
AT modifier did not prevent inappropriate payments for maintenance 
therapy because chiropractors continued to submit claims for 
maintenance therapy with the AT modifier.  
Claims data lack initial visit dates for treatment episodes, hindering 
the identification of maintenance therapy.  To identify active/corrective 
treatment and thereby distinguish it from maintenance therapy, it is 
useful to identify the start of a new treatment episode.  However, claims 
data do not indicate when an episode begins.  Thus, we asked sampled 
chiropractors and the medical reviewers to identify when an episode 
began and ended.  Overall, only 50 percent of all treatment episodes 
remained active/corrective throughout the treatment episode.  In 
addition, 78 percent of those treatment episodes that became 
maintenance therapy did so by the 20th visit.  The Comprehensive Error 
Rate Testing (CERT) paid claims error rate used by CMS is based on a 
review of a single claim, which limits its ability to detect maintenance 
therapy and may underestimate errors in claims for chiropractic 
services.   
Chiropractors often do not comply with the Manual documentation 
requirements.  Separate from the undocumented claims counted as 
errors above, 83 percent of chiropractic claims failed to meet one or 
more of the documentation requirements.  Consequently, the 
appropriate use of the AT modifier could not be definitively determined 
through medical review for 9 percent of sampled claims, representing 
$39 million.   
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E X E C U T I V E   S U M M A R Y  
The medical reviewers indicated that treatment plans are an important 
element in determining whether the chiropractic treatment was 
active/corrective in achieving specified goals.  Of the 76 percent of 
records that reviewers indicated contained some form of treatment plan, 
43 percent lacked treatment goals, 17 percent lacked objective 
measures, and 15 percent lacked the recommended level of care.   
RECOMMENDATIONS 
Medicare continues to pay inappropriately for maintenance therapy 
despite acknowledging this vulnerability in response to previous Office 
of Inspector General work and subsequent efforts aimed at prevention.  
Because of high error rates and poor documentation, we recommend 
that CMS: 
Implement and enforce policies to prevent future payments for 
maintenance therapy.  CMS can achieve this by implementing a new 
modifier for chiropractic claims to indicate the start of a new treatment 
episode and/or implementing a cap on allowed chiropractic claims. 
Review treatment episodes rather than individual chiropractic claims 
to strengthen the ability of the CERT to detect errors in chiropractic 
claims.  CMS should consider expanding the CERT review from a single 
sampled claim to a treatment episode that includes all claims from the 
initial visit to the sampled claim for a sample of (1) all chiropractic 
claims or (2) chiropractic claims for beneficiaries receiving 12 or more 
services per year because of their increased vulnerability.  Under this 
review, CMS would continue to sample claims in the current CERT 
process but would also request associated claims prior to the sampled 
claims to augment the medical review. 
Ensure that chiropractic claims are not paid unless documentation 
requirements are met.  CMS can achieve this by requiring carriers, 
whose responsibilities will transition to Medicare Administrative 
Contractors (MAC) by 2011, to withhold payment on reviewed claims 
when required documentation is absent or requiring carriers/MACs to 
perform prepayment review of claims from chiropractors who repeatedly 
fail to meet documentation requirements.  
Take appropriate action regarding the undocumented, medically 
unnecessary, and miscoded claims identified in our sample. 
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E X E C U T I V E   S U M M A R Y  
 
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
In its written comments on the report, CMS agreed with the second 
recommendation and described actions it would take to address the 
fourth recommendation.  CMS did not indicate agreement or 
disagreement with the first and third recommendations.   
In response to the second recommendation, CMS indicated that it is now 
reviewing 6 months of claims prior to sampled claims in response to a 
recommendation from a prior OIG report.  As a result, the CERT error 
rate increased from 8.9 percent to 15.3 percent from 2005 to 2006.  CMS 
indicated it would have to conduct a cost-benefit analysis to determine 
the utility of expanding this review to include claims beginning with the 
first claim of the treatment episode.  We encourage CMS to conduct this 
analysis because the intent of CERT is to determine error rates, identify 
programs at risk, and prevent future overpayments.  OIG has 
repeatedly found overpayments for maintenance therapy.   
In response to the fourth recommendation, CMS stated that it would 
instruct the contractors to take any necessary corrective actions with 
respect to the sampled claims that this study identified as being in 
error.   
In response to the first recommendation, CMS indicated that the 
objective data required to impose a national cap on the number of 
chiropractic services does not currently exist.  In response to the third 
recommendation, CMS described the current process contractors use to 
review provider claims with a greater likelihood of payment error, but 
CMS indicated no change in future practice to prevent claims without 
required documentation from being paid in error.  We ask that in its 
final management decision, CMS more clearly indicate whether it 
concurs with our first and third recommendations and what steps, if 
any, it will take to implement them.  
 
 
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 T A B L E   O F   C O N T E N T S  
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
 
 
I N T RO DUC T IO N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 
 
 
F I N D IN G S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 
Medicare inappropriately paid $178 million for chiropractic 
claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 
Efforts to stop payments for maintenance therapy have been 
largely ineffective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 
Claims data lack information to identify maintenance therapy. . 15 
Chiropractors often do not comply with Medicare documentation 
requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 
 
 
R E C O MMEN D A T ION S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 
Agency Comments and Office of Inspector General Response . . . 19 
 
 
APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 
  A:  Documentation Errors for Sampled Records . . . . . . . . . . . . . . 21 
  B:  Point Estimates and Confidence Intervals. . . . . . . . . . . . . . . . 22 
  C:  Sample Documentation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 
  D:  Agency Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 
 
 
A C K NO WL E D G M E N T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29   
   
 I N T R O D U C T I O N  
OBJECTIVE 
To determine the extent to which: 
(1)  chiropractic claims allowed in 2006 for beneficiaries receiving 
more than 12 services from the same chiropractor were 
appropriate,  
(2)  controls ensured that chiropractic claims were not for maintenance 
therapy,  
(3)  claims data can be used to identify maintenance therapy, and  
(4)  chiropractic claims were documented as required. 
BACKGROUND 
As required by the Social Security Act (the Act), Medicare pays only for 
reasonable and necessary chiropractic services, which are limited to 
active/corrective manual manipulations of the spine to correct 
subluxations.1  A chiropractic service must have a direct therapeutic 
relationship to the patients condition and provide reasonable 
expectation of recovery or improvement of function.2  The Centers for 
Medicare & Medicaid Services (CMS) Medicare Benefit Policy Manual 
(the Manual) allows chiropractors an opportunity to produce functional 
improvement or arrest or retard deterioration for subluxations within a 
reasonable and generally predictable period of time.3  When further 
improvement cannot reasonably be expected from continuing care and 
the services become supportive rather than corrective, the services are 
 
1 Sections 1861(r) and 1862(a)(1)(A) of the Act, 42 U.S.C.  1395x(r), 
42 U.S.C.  1395y(a)(1)(A)); 42 CFR  410.21(b); CMS, Medicare Benefit Policy Manual 
[Internet Only Manual], Pub. 100-02, chapter 15,  240.1.2, defines subluxation as a 
motion segment, in which alignment, movement integrity, and/or physiological function of 
the spine are altered although contact between joint surfaces remains intact.  Available 
online at http://www.cms.hhs.gov/Manuals/IOM/list.asp.  Accessed on July 30, 2008. 
2 CMS, Medicare Benefit Policy Manual [Internet Only Manual], Pub. 100-02, 
chapter 15,  240.1.3.  Available online at http://www.cms.hhs.gov/Manuals/IOM/list.asp.  
Accessed on July 30, 2008. 
3 CMS, Medicare Benefit Policy Manual [Internet Only Manual], Pub.100-02, 
chapter 15, 240.1.5.  Available online at http://www.cms.hhs.gov/Manuals/IOM/list.asp.  
Accessed on September 29, 2008. 
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I N T R O D U C T I O N  
 
considered maintenance therapy.4  The Manual provides that 
maintenance therapy is not considered a medically necessary 
chiropractic service and is therefore not payable under Medicare.5   
Medicare Requirements for Chiropractic Claims 
Chiropractic claims have specific billing requirements.  Chiropractors 
are limited to billing three Current Procedural Terminology (CPT) codes 
under Medicare:  98940 (chiropractic manipulative treatment; spinal, 
one to two regions), 98941 (three to four regions), and 98942 (five 
regions).6  When submitting manipulation claims, chiropractors must 
use an acute treatment (AT) modifier to identify services that are 
active/corrective treatment of an acute or chronic subluxation.  
Although the title of the modifier indicates that it should be used only 
for acute treatment, the Manual states that the modifier should be used 
for acute or chronic treatment as long as it is considered 
active/corrective.  By using the AT modifier, chiropractors indicate that 
the treatment provided is indeed active/corrective in nature.  Medicare 
should deny claims without the AT modifier as those services are 
considered maintenance therapy.7   
The Manual outlines seven general documentation requirements for 
initial visits and three general documentation requirements for 
subsequent visits, as listed below.8 
Initial visit. 
1.  Subluxation(s) demonstrated by x-ray or physical examination 
(physical examinations must demonstrate at least two of the four 
following criteria:  pain/tenderness, asymmetry/misalignment, 
 
4 CMS, Medicare Benefit Policy Manual [Internet Only Manual], Pub 100-02, 
chapter 15,  30.5.B, defines maintenance therapy as a treatment plan that seeks to 
prevent disease, promote health, and prolong and enhance the quality of life; or therapy 
that is performed to maintain or prevent deterioration of a chronic condition.  Available 
online at http://www.cms.hhs.gov/Manuals/IOM/list.asp.  Accessed on July 30, 2008. 
5 Ibid.  CMS, Addressing Misinformation Regarding Chiropractic Services and 
Medicare.  Available online at 
http://www.cms.hhs.gov/MLNProducts/downloads/Chiropractors_fact_sheet.pdf.  Accessed 
on July 30, 2008.   
6 American Medical Association, Current Procedural Terminology, 2006. 
7 CMS, Medicare Benefit Policy Manual [Internet Only Manual], Pub. 100-02, 
chapter 15,  240.1.5.  Available online at http://www.cms.hhs.gov/Manuals/IOM/list.asp.  
Accessed on July 30, 2008. 
8 CMS, Medicare Benefit Policy Manual [Internet Only Manual], Pub. 100-02, 
chapter 15,  240.1.2.  Available online at http://www.cms.hhs.gov/Manuals/IOM/list.asp.  
Accessed on July 30, 2008.   
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I N T R O D U C T I O N  
abnormal range of motion, and tissue/tone changes, one of which 
must be either asymmetry/misalignment or abnormal range of 
motion),9 
2.  Diagnosis of subluxation(s), 
3.  Patient history (lists such items as symptoms and past health 
history), 
4.  Description of present illness,  
5.  Treatment plan (includes a recommended level of care, specific 
treatment goals, and objective measures to evaluate treatment 
effectiveness), 
6.  Physical examination, and 
7.  Date of initial treatment.10 
Subsequent visit. 
1.  Patient history (lists such items as changes since last visit), 
2.  Physical examination, and 
3.  Documentation of treatment provided at each visit. 
CMS Oversight 
The Federal Managers Financial Integrity Act requires each executive 
agency to establish and maintain internal controls for oversight, 
including appropriate payment of claims.11  CMS monitors the rates of 
inappropriate payments for Medicare fee-for-service claims through the 
Comprehensive Error Rate Testing (CERT) program.12  At the time of 
our review, CMS contracted with Medicare Part B carriers and program 
safeguard contractors (PSC) to perform oversight, including program 
integrity and data analysis activities.13  CMS required that carriers and 
 
9 Ibid. 
10 Although seven requirements are listed here for the initial visit, only five are listed in 
Appendix A.  The medical reviewers analyzed the initial visit requirements 6 and 
7 (physical exam and date of initial treatment) in conjunction with the initial visit 
requirement 1 (subluxation demonstrated by x-ray or physical examination). 
11 31 U.S.C.  3512(b) and (c). 
12 CMS also uses the Hospital Payment Monitoring Program to measure error rates for 
fee-for-service claims.  This program does not include chiropractic services. 
13 Under Medicare Contracting Reform, responsibilities of carriers are transitioning to 
Medicare Administrative Contractors (MAC).  At the time of our review, none of the carriers 
had completed the transition. 
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I N T R O D U C T I O N  
PSCs provide assurances that controls were in place to identify and 
correct any areas of weakness in program operations.14   
CERT.  CMS has established the CERT program to randomly sample 
and review different types of service claims submitted to Medicare.  The 
2006 and 2007 CERT reports listed overall error rates for chiropractic 
services of 16 percent and 11 percent, respectively.15   
To calculate error rates, CERT staff randomly select claims for services 
each month from each contractor.  CERT staff then request only the 
medical record associated with the sampled claim from the provider that 
submitted the claim.  CERT staff do not request medical records related 
to complete treatment episodes for sampled chiropractic claims.      
Carrier responsibilities.  Carriers primary function was to pay for 
Medicare-covered services that are reasonable and necessary for eligible 
individuals.  Carriers may have implemented frequency-based controls 
that generally fall into one of two categories:  soft caps and hard caps.  
With either type of cap, the carrier determined a frequency or dollar 
threshold for the services that it would routinely allow during a 
specified time period, usually 1 year.16   
  Soft capsMedicare carriers generally used soft caps to suspend 
payment for any claims for service that were submitted exceeding a 
threshold.  Carriers requested additional documentation from the 
chiropractors for claims exceeding the threshold.  The claims were 
paid if the documentation demonstrated that continued treatment 
was medically necessary.   
  Hard capsFor certain services, carriers tracked the number of 
services or expenditures per patient and did not pay for services 
beyond an established threshold even if they were medically 
necessary.  Carriers did not use hard caps for chiropractic claims at 
the time of our review, although hard caps existed in other 
disciplines, such as physical therapy.  Other health care payors use 
 
14 CMS, Medicare Financial Management Manual [Internet Only Manual],  
Pub. 100-06, chapter 7,  30.1.  Available online at 
http://www.cms.hhs.gov/Manuals/IOM/list.asp.  Accessed on July 30, 2008. 
15 CMS, Improper Medicare Fee-For-Service Payments Report - November 2006 Long 
Report and Improper Medicare Fee-For-Service Payments Report - November 2007 Long 
Report.  Available online at http://www.cms.hhs.gov/apps/er_report/index.asp.  Accessed on 
September 25, 2008. 
16 OIG interviews with carrier staff conducted in association with Chiropractic Services 
in the Medicare Program:  Payment Vulnerability Analysis (OEI-09-02-00530). 
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I N T R O D U C T I O N  
hard caps for chiropractic claims.  For example, many Federal 
Employee Health Benefit plans impose frequency limits on 
chiropractic claims ranging from 12 to 20 per year.   
PSC responsibilities.  A PSC can perform one or more of the following 
payment safeguard functions:  medical review, cost report audit, data 
analysis, provider education, and fraud detection and prevention.17  
Medicare expects each PSC to: 
  prevent fraud by identifying program vulnerabilities;  
  proactively identify incidents of potential fraud that exist within its 
service area and take appropriate action on each case; 
  investigate allegations of fraud made by beneficiaries, providers, 
CMS, the Office of Inspector General (OIG), and other sources; 
  explore all available sources of fraud referrals in its jurisdiction;  
  initiate appropriate administrative actions to deny or to suspend 
payments that should not be made to providers where there is 
reliable evidence of fraud;  
  refer cases to OIG for consideration of civil and criminal prosecution 
and/or application of administrative sanctions; and  
  refer any necessary provider and beneficiary outreach to the 
education staff at the carrier.18 
Previous OIG Work 
Previous OIG studies published in 1986, 1998, and 1999 found that 
significant vulnerabilities existed in connection with chiropractic 
claims, particularly concerning Medicare payments for maintenance 
 
17 CMS, Medicare Program Integrity Manual, Pub 100-08, Change Request 1143.  
Available online at http://www.cms.hhs.gov/Transmittals/Downloads/R12PIM.pdf.  Accessed 
on August 1, 2008.  Under Medicare Contracting Reform, PSCs are responsible only for 
benefit integrity work (CMS, Medicare Administrative Contractor Workload 
Implementation Handbook, chapter 7,   7.3.1.  Available online at 
http://www.cms.hhs.gov/MedicareContractingReform/downloads/ 
MACImplementationHandbook.pdf.  Accessed on August 1, 2008.) 
18 CMS, Medicare Program Integrity Manual [Internet Only Manual], Pub 100-08, 
chapter 4,  4.2.2.  Available online at 
http://www.cms.hhs.gov/manuals/downloads/pim83c04.pdf.  Accessed on August 1, 2008.    
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I N T R O D U C T I O N  
 
therapy.19  Each of these studies recommended frequency edits or caps 
on the number of chiropractic claims allowed.  In 2005, OIG conducted 
an additional study that found that 40 percent of allowed chiropractic 
claims in 2001 were for maintenance therapy and that when 
chiropractors provide more than 12 services per year to a beneficiary, 
the likelihood that some of those services were maintenance therapy 
increased greatly.20  OIG recommended that CMS require carriers or 
PSCs to conduct routine service-specific reviews of chiropractic services 
to identify improper payments and implement frequency-based controls 
to target high-volume services for review.  Additionally, OIG 
recommended that CMS require carriers to educate chiropractors on 
documentation requirements as outlined in the Manual.   
In its written response to the OIG draft report, CMS concurred with 
those OIG recommendations and indicated that it had taken a number 
of steps to reduce chiropractic error rates, including targeted 
educational efforts and service-specific medical reviews.  CMS issued 
three updates in 2004 to the Manual requiring providers to use the 
AT modifier for all chiropractic claims when such services were for 
active/corrective treatment.21  CMS also acknowledged in its written 
comments that because the CERT paid claims error rate is based on a 
review of a beneficiarys claim at a single point in time instead of claims 
over time, the ability to detect services meeting the definition of 
maintenance therapy is limited.22   
METHODOLOGY 
We used multiple methods to achieve our objectives.  The primary 
method used was medical review of records supporting chiropractic 
claims.  We also interviewed CMS central office staff, carrier staff, and 
PSC staff; analyzed historical claims data; and reviewed recent 
chiropractic literature.   
 
19 Inspection of Chiropractic Services under Medicare (OAI-05-86-00002); Chiropractic 
Care:  Controls Used by Medicare, Medicaid, and Other Payers (OEI-04-97-00490); and 
Utilization Parameters for Chiropractic Treatments (OEI-04-97-00496). 
20 Chiropractic Services in the Medicare Program:  Payment Vulnerability Analysis  
(OEI-09-02-00530). 
21 CMS, Medicare Benefit Policy Manual, Pub. 100-02, Change Request 3063, released 
in May 2004 was rescinded and replaced in September 2004 with Change Request 3449, 
which was reissued in October 2004.   
22 Chiropractic Services in the Medicare Program:  Payment Vulnerability Analysis  
(OEI-09-02-00530).  See Agency Comments section. 
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II NN TT RR OO DD UU CC TT II OO NN   
Population Identification 
We obtained Medicare-allowed claims data for chiropractic claims 
submitted with procedure codes 98940, 98941, and 98942 and with an 
AT modifier from CMSs 2006 National Claims History Part B Carrier 
file.  This population contained 22,964,790 claims with a total allowed 
amount of $762,148,017.  We limited the population to claims for 
beneficiaries who received more than 12 services from the same 
chiropractor in 2006.23  This population contained 13,827,382 claims 
with a total allowed amount of $465,959,195.  
Sample Selection 
We selected a simple random sample of 200 allowed claims from the 
population.  Twelve claims were removed from the sample because of 
ongoing OIG investigation work, leaving a final sample of 188 allowed 
claims.  We projected our results to the population from which we drew 
the sample.  Point estimates with confidence intervals for selected 
statistics are contained in Appendix A.     
Medical Review  
We contracted with a medical review contractor to assist us in data 
collection, selecting medical reviewers, and reviewing medical records.  
The medical review contractor sent up to three medical record request 
letters (the last request via certified mail) to each provider for the 
sampled claims at predetermined time intervals.  The letters requested 
all medical records from each chiropractor for the beneficiary from the 
first visit through the end of the treatment episode involving the 
sampled claim, not just records to support the sampled claim.  The 
contractor conducted a minimum of three follow-up telephone contacts 
with providers who failed to respond to mailed requests.  The contractor 
successfully contacted all chiropractors for all the sampled claims; 
however, chiropractors did not respond with requested documentation 
for seven sampled claims.24  
We worked with the medical review contractor to select chiropractors 
with previous experience in reviewing chiropractic services provided to 
Medicare beneficiaries to serve as medical reviewers for this study.  
These medical reviewers determined whether each sampled claim was 
 
23 As previously stated, recent OIG work determined that when chiropractors provide 
more than 12 services per year to a beneficiary, the likelihood that some of those services 
constituted maintenance therapy increased greatly. 
24 The chiropractors failing to comply with our request for information have been 
referred to CMS and OIGs Office of Investigations for appropriate action. 
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I N T R O D U C T I O N  
active/corrective treatment or maintenance therapy, the extent to which 
chiropractors supported their use of the AT modifier with proper 
documentation indicating active/corrective treatment, whether claims 
were coded properly, and whether documentation met the Manual 
requirements.  For each treatment episode, the medical reviewers 
identified the initial visit if the practicing chiropractor failed to specify 
the initial visit in their submission of documentation.  The medical 
reviewers then reviewed the initial visit and subsequent visits (if 
relevant) to determine whether documentation requirements were met 
and whether maintenance therapy was provided. 
We did not automatically exclude records from our medical review when 
chiropractors failed to comply fully with documentation requirements.  
For example, even if not all visits included patient histories and 
descriptions of present illnesses, which are required by Medicare, the 
records were still reviewed.  The services rendered on those days were 
not automatically deemed to be maintenance therapy by the medical 
reviewers because documentation was missing. 
We defined inappropriate payments as those made for sampled claims 
that the medical reviewers identified as maintenance therapy, 
miscoded, or undocumented.25  We then projected our results to the 
population of 13.8 million chiropractic claims representing those claims 
for beneficiaries receiving more than 12 services in a year.  This may 
have caused us to underestimate error rates for both dollars and 
services because the weight of estimates was divided by 200 rather than 
188 (because of 12 cases under review by OIG).  Upcoding and 
downcoding were determined by the number of regions manipulated as 
supported by the documentation compared to the number of regions 
manipulated as indicated by the submitted claims.  The net differences 
were reported (i.e., adding or subtracting the amount for the correct 
code from the amount allowed for these claims). 
Interviews and Documentation Collection 
We conducted structured interviews with and collected documentation 
from CMS central office staff, carrier staff, and PSC staff to determine 
how they ensured that claims with the AT modifier were not 
maintenance therapy.  CMS interviews included questions about 
 
25 Claims were undocumented if the provider did not provide the requested 
documentation or if the records did not document that any service was rendered on the date 
claimed. 
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I  N T R O D U C T I O N  
documentation requirements, provider education and outreach, and 
Medicare policies.  The carrier and PSC staff interviews included 
questions about local coverage determination policies, provider 
education and outreach, coordination of oversight, medical review 
strategies, and resources.  When clarification was necessary, we 
obtained documentation of local coverage determination policies, 
Internet-based provider education materials, and other outreach 
materials.  Additionally, we reviewed CERT reports from 20032007 to 
examine sample methodologies and error rates for chiropractic services. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspections issued by the Presidents Council on Integrity and 
Efficiency and the Executive Council on Integrity and Efficiency.
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Medicare inappropriately paid $178 million for  In 2006, Medicare inappropriately 
chiropractic claims in 2006, representing  paid a total net $178 million (out 
of $466 million) for chiropractic 
47 percent of claims meeting our study criteria 
claims for services that were 
maintenance therapy ($157 million), miscoded ($11 million), or 
undocumented ($46 million).  These claims represent 47 percent of all 
allowed chiropractic claims that met the study criteria of chiropractors 
providing more than 12 services to the same beneficiary during 2006.  
Seventeen percent of the reviewed claims, representing $36 million, had 
multiple errors.  Table 1 groups the improperly paid claims projected to 
the population.   
Table 1:  Inappropriately Paid Chiropractic Claims in 2006 
Claims 
Type of Error  Claims  Allowed Amount 
(percentage) 
Maintenance Therapy        
     Did not accurately reflect   
4,217,352  32  $141,651,849 
     active/corrective treatment 
     Did not provide a reasonable  
     expectation of recovery or     3,940,804  30  $134,174,001 
     functional improvement 
(Overlapping errors for maintenance 
(3,525,983)  (27)  ($119,136,032) 
therapy) 
        Total maintenance therapy  4,632,173  36*  $156,689,819* 
Miscoded          
     Upcoded  1,728,423  13  $17,896,089 
     Downcoded  553,095  4  ($6,534,821) 
        Total miscoded  2,281,518  18*  $11,361,268 (net) 
Undocumented          
     Nonresponse  483,958  4  $14,078,349 
     Claim lacked documentation of  
898,780  7  $31,626,679 
     treatment 
        Total undocumented  1,382,738  11  $45,705,028 
        Total errors (gross)  8,296,429  64  $213,756,116* 
(Overlapping errors)  (2,212,381)  (17)  ($35,579,928) 
        Total errors (net)  6,084,048  47  $178,176,188* 
Source:  OIG medical review of 2006 chiropractic services.   
*Note:  Numbers do not sum as expected because of rounding.   
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F I N D I N G S  
Medicare inappropriately paid $157 million for maintenance therapy 
The medical reviewers identified 36 percent of the chiropractic claims 
allowed in 2006 that met the study criteria, totaling $157 million, as 
maintenance therapy, for which Medicare does not pay.  We found that 
25 percent of the reviewed treatment episodes that included 
maintenance therapy were identified as maintenance at the initial visit.  
This indicates that for these entire treatment episodes, no functional 
improvement could have been expected.  All of the inappropriate 
payments for maintenance therapy reflect the medical reviewers 
determination based on their review of medical records, not insufficient 
documentation.  When certain required documentation was unavailable, 
the medical reviewers relied on other available documentation (such as 
objective measures of treatment effectiveness over time) to determine 
the appropriateness of the AT modifier.   
We could identify no relationship between the area of the spine 
diagnosed with a subluxation(s) and the incidence of maintenance 
therapy.  In addition, we did not identify any significant correlations 
between the incidence of maintenance therapy and a given diagnosis. 
We identified 73,936 claims amounting to $2.4 million that were paid 
without the AT modifier being listed as the primary or secondary 
modifier. 
Medicare inappropriately paid a net $11 million for miscoded claims 
The medical reviewers identified 18 percent of the chiropractic claims 
allowed in 2006 that met the study criteria, totaling $79 million in 
allowed claims, as spinal manipulation claims that reflected the 
incorrect number of regions of the spine.  The net cost to the program 
was $11 million.  Coding errors generally involved upcoding, which is 
billing a more complex and higher paid service than the one documented 
in the medical record.  Approximately 41 percent of allowed claims in 
our sample for spinal manipulation on five regions (CPT code 98942) 
were upcoded, and 15 percent of allowed claims for manipulation on 
three to four regions (CPT code 98941) in our sample were upcoded.  
The medical reviewers noted: 
[M]any records . . . did not meet the Medicare guidelines in 
determining a chiropractic subluxation for each area of 
the spine treated.  The records would indicate a problem 
in one area of the spine which was examined, but indicated 
treatment to three to four areas of the spine and charged  
according to procedure without correlation to diagnosis. 
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Similarly, carriers noted trends in upcoding for chiropractic claims 
based on targeted medical review in their jurisdictions.  Staff from one 
carrier explained that in one specific geographic area, Three to four 
years ago we looked at distribution among three codes, looking at those 
using 98942 frequently.  The percentage of abuse with 98942 was 
80 percent or greater. 
Medicare inappropriately paid $46 million for undocumented claims   
Eleven percent of claims allowed in 2006 that met the study criteria, 
totaling $46 million, were undocumented.  The chiropractors for 
7 percent of claims provided us with records that did not document that 
any service was rendered on the date claimed.  Additionally, despite 
repeated requests, chiropractors did not provide the documentation 
related to 4 percent of the sampled claims.  In both cases, claims that 
lack sufficient documentation to show that care was provided do not 
meet Medicare requirements.   
 
CMS, carriers, and PSCs use a 
Efforts to stop payments for maintenance 
number of strategies to deter 
therapy have been largely ineffective  
inappropriate payments for 
maintenance therapy, including use of the AT modifier to indicate 
active/corrective treatment, provider education, frequency-based control 
edits (caps), and focused medical review.  Despite these efforts, carriers 
and PSCs continue to report high error rates for chiropractic claims.   
The AT modifier does not prevent inappropriate payments for maintenance 
therapy  
Table 2 demonstrates that the number of chiropractic claims submitted 
and allowed changed little since the requirement of the AT modifier for 
active/corrective treatment.  Because the 2005 OIG study identified 
40 percent of all 2001 allowed chiropractic claims as maintenance 
therapy, there should have been a decreasenot an increasein the 
number of allowed claims if CMSs AT modifier requirement effectively 
prevented inappropriate payments for maintenance therapy.  
Instead, allowed claims increased 3.7 million, or 19 percent, between 
2003 (1 year before the AT modifier guidance) and 2005 (the year after 
the AT modifier guidance).  The AT modifier was used on 99.8 percent of 
allowed chiropractic claims in 2005, up from 6.1 percent in 2003.   
 
 
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F I N D I N G S  
Table 2:  Estimates of Chiropractic Claims Volume 20012006 
Mean Claims  Percentage of  Percentage of 
Calendar  Submitted  Submitted  Allowed  Allowed Claims  Submitted 
Year  Claims  per  Claims  With AT  Claims 
Beneficiary  Modifier  Allowed 
2001  19,531,700  10.5  15,920,500  6.2  81.5 
2002  21,220,800  10.6  18,111,800  5.9  85.3 
2003  22,521,600  10.9  19,407,300  6.1  86.2 
2004  25,151,800  11.6  21,200,000  34.6  84.3 
2005  26,121,100  11.5  23,075,800  99.8  88.3 
2006  25,845,478  11.3  22,964,790  99.7  88.9 
Source:  OIG analysis of estimates from the 1-percent beneficiary sample Part B claims file, 2008. 
 
Carrier staff, PSC staff, and medical reviewers for this study agreed 
that the AT modifier did not prevent inappropriate payments for 
maintenance therapy.  Carrier staff readily indicated, By putting an 
AT modifier on a claim, chiropractors are getting paid, and they know 
they will get paid.  During its review of trends in chiropractic claims in 
excess of 12 claims per year, one PSC identified two chiropractors with 
100-percent error rates.  Staff from another PSC investigating 
suspicious chiropractic claims said, from a [targeted] medical review 
standpoint, we see lots of chiropractors billing with the AT modifier 
when not appropriate.  I would say at least 95 percent of AT modifier 
use is wrong.  It is a big issue.  Further, the medical reviewers for this 
study noted that the requirement for the AT modifier did not appear to 
affect chiropractic billing patterns. 
Provider education does not prevent inappropriate payments for 
maintenance therapy  
In response to comments from the chiropractic industry indicating that 
the definition of maintenance therapy was confusing, CMS revised the 
definition of maintenance therapy in the Manual before our review 
period.  This revision was made in addition to requiring the AT modifier 
to indicate active/corrective treatment.  CMS allowed carriers flexibility 
in educating chiropractors on the revised Medicare requirements.   
Chiropractors continue to submit claims for maintenance therapy with 
the AT modifier even though all 16 carriers indicated that they provided 
education to chiropractors on the correct use of the AT modifier.  
Fourteen carriers reported developing educational programs or 
publishing important information on their Web sites regarding 
appropriate AT modifier usage.  Ten carriers volunteered that they 
provided education at conferences or other seminars, and five 
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volunteered that they used collaboration with chiropractic associations 
to increase awareness and promote the appropriate use of the 
AT modifier.  Eight carriers volunteered that they published material or 
manuals to send to chiropractors.  
Use of frequency-based controls does not prevent all inappropriate 
payments for maintenance therapy; carriers welcome stricter measures 
Soft caps.  At the time of our review, half of the carriers used soft caps 
for chiropractic claims based on the frequency of services for a 
particular diagnosis as their primary means of limiting inappropriate 
payments.  Staff from one carrier explained, Diagnoses are split into 
different categories and different numbers of services are permitted.  
This [practice] originated many years ago and became available as a 
model policy to all carriers.  Staff from another carrier noted in 
reference to their postpayment review process, As we continue to do 
complex medical review, we continue to deny about 90 percent of 
reviewed claims.  One carrier reported difficulty in implementing an 
internal frequency threshold.  After the carrier adjusted its frequency 
threshold, some chiropractors changed their billing behavior by 
submitting claims up to the threshold to avoid review.   
Hard caps.  Although 4 carriers had hard caps for chiropractic claims in 
the past, none of the 16 carriers currently have them.  Carrier staff 
explained that they no longer have hard caps because of guidance from 
CMS and opposition from the chiropractic community.  A CMS staff 
member noted, Years ago, some [carriers] had auto-deny limits and one 
by one, they got rid of them because of political pressure.  Although 
CMS has hard caps in other disciplines, staff indicated that the lack of 
clinical evidence would make establishing frequency thresholds for 
chiropractic claims difficult.  However, staff from 10 carriers indicated 
that they would welcome hard caps on chiropractic claims.  Similarly, 
the 2005 OIG report noted that six carriers would like hard caps. 
PSCs use of focused medical review does not prevent inappropriate 
payments for maintenance therapy  
PSCs based medical review strategies and processing of referrals on 
their individual program integrity priorities, which are generally the 
service areas with the greatest potential for overpayment recovery.  
Though chiropractors submitted claims for more than $1 billion in 2006, 
individual chiropractic claims may be considered small.  The average 
allowed charge for a chiropractic claim in 2006 was only $33, while the 
same for a physician office visit was $62.  Staff from a PSC responsible 
for program integrity in five major cities across 16 States explained, 
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We have to prioritize our work by the most egregious crimes.  We dont 
look at chiropractic claims and the AT modifier specifically because the 
money is not [significant when reviewing] individual providers.  
 
To appropriately identify 
Claims data lack initial visit dates for treatment 
active/corrective treatment 
episodes, hindering the identification of 
and thereby distinguish it 
maintenance therapy 
from maintenance therapy, it 
is useful to identify the start of a new treatment episode.  Because 
claims data do not indicate when a treatment episode began, we asked 
sampled chiropractors and the medical reviewers to identify when an 
episode began and ended.  Overall, only 50 percent of all treatment 
episodes remained active/corrective throughout the treatment episode.  
For the remaining treatment episodes that included maintenance, the 
mean number of claims between the initial visit and the first visit 
determined to be maintenance therapy was 14, with the median number 
being 9 claims.  Additionally, 78 percent of those treatment episodes 
that became maintenance therapy did so by the 20th visit.   
The 2005 OIG study found that the likelihood of services being 
medically unnecessary increased to approximately 67 percent for claims 
between the 13th and 24th visit during a calendar year and 100 percent 
for claims beyond the 24th visit.  Combined with our present findings, 
these results indicate that the greater the number of visits after the 
initial visit, the greater the likelihood that a claim will be for 
maintenance therapy.  However, chiropractic claims lack an indicator to 
reflect which visits are the initial visits for treatment episodes.   
The initial visit for treatment episodes may not always be a 
beneficiarys first visit to a chiropractor.  A beneficiary may experience a 
recurrence or an exacerbation of a previously treated condition that may 
necessitate the start of a new treatment episode.26  One reviewer 
explained, Because Medicare covers patients that are predominantly 
65 years or older, the chiropractor is often faced with chronic or 
recurrent conditions.  The AT modifier, when applied appropriately, 
 
26 According to carriers local coverage determinations, a recurrence is a return of 
symptoms from a previously treated condition that has been quiescent for 30 or more days.  
An exacerbation is a temporary, marked deterioration of the patients condition because of 
an acute flareup of the condition being treated.  
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should indicate expectation of functional improvement, regardless of the 
[chronic nature] or redundancy of the problem.   
Currently, the expectation of functional improvement can be determined 
only from a complete medical review of the treatment episode.  In 
contrast, the CERT paid claims error rate used by CMS is based on a 
review of a single claim, which limits its ability to detect maintenance 
therapy and may underestimate errors in claims for chiropractic 
services. 
 
Separate from the completely 
Chiropractors often do not comply with the 
undocumented claims previously 
Manual documentation requirements 
discussed as errors in the first 
finding of this study, 83 percent of chiropractic claims failed to meet one 
or more of the documentation requirements.  Consequently, the 
appropriate use of the AT modifier could not be definitively determined 
through medical review for 9 percent of sampled claims, representing 
$39 million.  See Table 3 for summary information regarding the extent 
to which records for the sampled claims did not meet the documentation 
requirements for initial visits and subsequent visits and Appendix B for 
detailed information regarding specific documentation requirements not 
met for sampled claims. 
Table 3:  Documentation Errors 
 
Documentation Requirements Not Present in Record  Percentage 
 
   Initial Visit    
 
1.  Subluxation demonstrated by x-ray or physical exam  11 
2.  Diagnosis of subluxation  13 
3.  Complete patient history  70 
4.  Complete description of present illness  66 
5.  Complete treatment plan  63 
   Subsequent Visits    
1.  Complete patient history  29 
2.  Complete physical exam  43 
3.  Documentation of treatment provided  15 
Source:  OIG medical review of year 2006 services by practicing chiropractors, 2008. 
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Chiropractors provided documentation that varied widely.  
Documentation provided by chiropractors ranged from comprehensive 
standardized forms to travel cards, which include no more than simple 
checkboxes.27  At times, handwritten notes were illegible and 
computer-generated notes were unchanged from one visit to the next. 
Carrier staff indicated that documentation for chiropractic claims was 
poor.  Staff at one carrier stated, Several providers blatantly tell us 
that they dont have time to document the way we want.  Staff at 
another carrier stated that chiropractors do not agree with 
documentation requirements and believe them to be too time 
consuming.   
Documentation for treatment plans was insufficient 
The medical reviewers indicated that treatment plans are an important 
element in determining whether the chiropractic treatment was 
active/corrective in achieving specified goals.  The goal may change 
throughout the treatment episode, but it should be documented in the 
medical record to demonstrate active/corrective treatment.  Of the 
76 percent of records that reviewers indicated contained some form of 
treatment plan, 43 percent lacked treatment goals, 17 percent lacked 
objective measures, and 15 percent lacked the recommended level of 
care.  A staff member from one carrier explained that:  
When reviewing a specific service, we often dont get a 
treatment plan if it was created at the first visit for the 
episode-this is no more than what we ask from [medical 
doctors].  The general trend is that [the patient will] be 
treated for several months, three to four times per month, 
but theres no documentation of a treatment plan or any 
goals.   
One of the medical reviewers explained that it is common for 
chiropractors to have treatment plans that include frequency, duration, 
and goals but that these treatment plans often are verbal and 
consequently not always documented.  Another medical reviewer 
indicated, In my 29 years of practice, I rarely saw documentation of a 
plan which included frequency, duration, goals, and objective measures.  
While these guidelines are in the [Medicare] Manual, they apparently 
have not been incorporated into the profession.
 
27 See Appendix C for examples of documentation for chiropractic services.   
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 R E C O M M E N D A T I O N S  
 
Medicare continues to pay inappropriately for maintenance therapy 
despite acknowledging this vulnerability in response to previous OIG 
work and subsequent efforts aimed at prevention.  In 2006, Medicare 
inappropriately paid $178 million for chiropractic claims, representing 
47 percent of all allowed chiropractic claims that met the study criteria.  
Claims for maintenance therapy accounted for $157 million of these 
inappropriately paid claims.  Efforts to prevent inappropriate payments 
for maintenance therapy have been largely ineffective, and the lack of 
initial visit dates in claims data hinders the ability to identify 
maintenance therapy.  The expectation of functional improvement can 
be determined only from a complete medical review of the treatment 
episode.  In contrast, the CERT paid claims error rate used by CMS is 
based on a review of a single claim, which limits its ability to detect 
maintenance therapy and may underestimate errors in claims for 
chiropractic services.  Further, chiropractors often do not comply with 
the Manual documentation requirements.   
Therefore, we recommend that CMS: 
Implement and Enforce Policies To Prevent Future Payments for 
Maintenance Therapy   
CMS can achieve this through implementing (1) a new modifier for 
chiropractic claims to indicate the start of a new treatment episode so 
that carriers/Medicare Administrative Contractors (MAC) can identify 
aberrant treatment patterns through claims data and/or (2) a cap on 
allowed chiropractic claims based on recommendations from a 
consortium of clinical providers.   
Review Treatment Episodes Rather Than Individual Chiropractic Claims To 
Strengthen the Ability of the CERT To Detect Errors in Chiropractic Claims   
CMS should consider expanding the CERT review from a single 
sampled claim to a treatment episode that includes all claims from the 
initial visit to the sampled claim for a sample of (1) all chiropractic 
claims or (2) chiropractic claims for beneficiaries receiving 12 or more 
services per year because of their increased vulnerability.  Under this 
review, CMS would continue to sample claims in the current CERT 
process but would also request associated claims before the sampled 
claims to augment the medical review. 
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Ensure That Chiropractic Claims Are Not Paid Unless Documentation 
Requirements Are Met 
CMS can achieve this by requiring carriers/MACs to (1) withhold 
payment on reviewed claims when required documentation is absent or 
(2) perform prepayment review of claims from chiropractors who 
repeatedly fail to meet documentation requirements.   
Take Appropriate Action Regarding the Undocumented, Medically 
Unnecessary, and Miscoded Claims Identified in Our Sample 
We will forward information on these claims to CMS in a separate 
memorandum. 
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
In its written comments on the report, CMS agreed with the second 
recommendation and described actions it would take to address the 
fourth recommendation.  CMS did not indicate agreement or 
disagreement with the first and third recommendations.  
In response to the second recommendation, CMS indicated that it 
recently began reviewing 6 months of claims prior to sampled claims in 
response to a recommendation from a prior OIG report.  The CERT 
program reported an increased error rate from 8.9 percent in 2005 to 
15.3 percent in 2006 because of this change.  However, this new 
process allows for the review of claims only up to 6 months prior to 
sampled claims and may not include the entire chiropractic treatment 
episode.  CMS indicated it would have to conduct a cost-benefit 
analysis to determine the utility of expanding this review to include 
claims beginning with the first claim of the treatment episode.  CMS 
indicated that expanding the review would cost an additional  
$150,000$200,000 and would increase the burden on providers, who 
would need to furnish additional medical documentation.  We encourage 
CMS to conduct this analysis because the intent of CERT is to 
determine error rates, identify programs at risk, and prevent future 
overpayments.  OIG has repeatedly found overpayments for 
maintenance therapy. 
In response to the fourth recommendation, CMS stated that it would 
instruct the contractors to take any necessary corrective actions with 
respect to the sampled claims that this study identified in error.  
In response to the first recommendation, CMS indicated that the 
objective data required to impose a national cap on the number of 
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R E C O M M E N D A T I O N S  
chiropractic services does not currently exist.  CMS stated that it will 
review any research studies as they become available.  CMS also stated 
it will consider implementing an additional modifier after it works 
through the policy and operational implications.  We encourage CMS to 
ensure that such studies and policy reviews are conducted. 
In response to the third recommendation, CMS described the current 
process contractors use to review provider claims with a greater  
likelihood of payment error.  However, CMS indicated no change in 
future practice to prevent claims without required documentation from 
being paid in error.   
We ask that in its final management decision, CMS more clearly 
indicate whether it concurs with our first and third recommendations 
and what steps, if any, it will take to implement them.   
The full text of CMSs comments can be found in Appendix D.
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 A P P E N D I X   ~   A  
Table A-1:  Documentation Errors for Sampled Records 
 
Point Estimate  95-Percent Confidence 
Documentation Requirements Not Present  n  (percentage)  Interval 
Initial Visit          
1.  Subluxation demonstrated by x-ray or physical exam  188  11  717 
2.  Diagnosis of subluxation  188  13  919 
3.  Complete patient history  188  70  6377 
     Any patient history  188  6  311 
    symptoms causing patient to seek treatment  176  2  05 
    family history, if relevant  176  2  16 
    past health history  176  40  3348 
    mechanism of trauma  176  29  2236 
    quality and character of symptoms  176  13  819 
    onset, duration, intensity, frequency, location, and radiation of symptoms  176  22  1629 
    aggravating or relieving factors  176  41  3449 
    prior interventions, treatments, medications, and secondary complaints  176  42  3550 
4.  Complete description of present illness  188  66  5973 
     Any description of present illness  188  7  412 
    mechanism of trauma  175  29  2336 
    quality and character of symptoms  175  14  920 
    onset, duration, intensity, frequency, location, and radiation of symptoms  175  22  1629 
    aggravating or relieving factors  175  40  3348 
    prior interventions, treatments, medications, and secondary complaints  175  43  3651 
    symptoms causing patient to seek treatment  175  2  05 
5.  Complete treatment plan  188  63  5570 
     Any treatment plan   188  12  818 
    recommended level of care  142  15  922 
    specific treatment goals  142  43  3552 
    objective measures to evaluate effectiveness  142  17  1124 
Subsequent Visits          
1.  Complete patient history  174  29  2337 
     Any patient history  174  24  1831 
    review of chief complaint  146  7  312 
    changes since last visit  146  9  515 
    system review, if relevant  146  0  03 
2.  Complete physical exam  174  43  3550 
     Any physical exam  174  22  1629 
    exam of area of spine involved in diagnosis  149  3  18 
    assessment of change in patient condition since last visit  149  15  922 
    evaluation of treatment effectiveness  149  28  2135 
3.  Documentation of treatment provided  188  15  1121 
Source:  Office of Inspector General (OIG) analysis of chiropractic claims data, 2008.          
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 A P P E N D I X   ~   B  
Table B-1:  Point Estimates and Confidence Intervals for Reported Statistics 
Point Estimate  95-Percent Confidence 
Description 
(n=188)  Interval 
Sampled service did not accurately reflect active/corrective treatment (dollars)  $141,651,849   $111,533,439$171,770,260 
Sampled service did not accurately reflect active/corrective treatment (services)  4,217,352   3,339,5005,095203 
Sampled service did not accurately reflect active/corrective treatment (percent)  32  2639 
Sampled service did not provide a reasonable expectation of recovery (dollars)  $134,174,001  $104,191,663$164,156,339 
Sampled service did not provide a reasonable expectation of recovery (services)  3,940,804  3,078,9634,802,645 
Sampled service did not provide a reasonable expectation of recovery (percent)  30  2437 
Overlapping errors for maintenance (dollars)  $119,136,032   $90,389,067$147,882,997 
Overlapping errors for maintenance (services)  3,525,983  2,692,3024,359,663 
Overlapping errors for maintenance (percent)  27  2134 
Total maintenance (dollars)  $156,689,819   $125,616,059$187,763,579 
Total maintenance (services)  4,632,173  3,734,1575,530,189 
Total maintenance (percent)  36  2943 
Upcoded (dollars)  $17,896,089   $10,927,509$24,864,670 
Upcoded (services)  1,728,423  1,091,7482,365,098 
Upcoded (percent)  13  818 
Downcoded (dollars)  (6,534,821)  ($1,876,340)(11,193,301) 
Downcoded (services)  553,095  174,622931,569 
Downcoded (percent)  4  17 
Sampled service was coded at the wrong level (net dollars)  $11,361,268  $2,693,506$20,029,031 
Sampled service was coded at the wrong level (services)  2,281,518  1,568,2102,994,826 
Sampled service was coded at the wrong level (percent)  18  1223 
Allowed claims miscoded (gross dollars)  $79,443,841   $53,932,302$104,955,380 
Undocumented because of nonresponse (dollars)  $14,078,349  $3,667,275$24,489,422 
Undocumented because of nonresponse (services)  483,958  128,947838,970 
Undocumented because of nonresponse (percent)  4  16 
Undocumented because of claim lacking documentation (dollars)  $31,626,679   $14,572,367$48,680,992 
Undocumented because of claim lacking documentation (services)  898,780  423,0671,374,493 
Undocumented because of claim lacking documentation (percent)  7  311 
Total undocumented services (dollars)  $45,705,028   $26,193,289$65,216,768 
Total undocumented services (services)  1,382,738  804,6111,960,866 
Total undocumented services (percent)  11  615 
Source:  Office of Inspector General (OIG) analysis of chiropractic claims data, 2008.   
  OEI-07-07-00390  INAPPROPRIATE MEDICARE PAYMENTS FOR CHIROPRACTIC SERVICES   22   
   
A P P E N D I X   ~   B  
Table B-1:  Point Estimates and Confidence Intervals for Reported Statistics, continued 
 
Point  95-Percent Confidence 
Description  n 
Estimate   Interval 
Total errors - gross (dollars)  188  $213,756,116  $171,388,169$256,124,062 
Total errors - gross (services)  188  8,296,429  6,840,1409,752,719 
Total errors - gross (percent)  188  64  5375 
Overlapping errors (dollars)  188  $35,579,928   $17,625,483$53,534,373 
Overlapping errors (services)  188  2,212,381  1,432,1382,992,624 
Overlapping errors (percent)  188  17  1123 
Total errors - net (dollars)  188  $178,176,188   $146,394,603$209,957,773 
Total errors - net (services)  188  6,084,048  5,148,4377,019,659 
Total errors - net (percent)  188  47  4054 
Services that were maintenance at the initial visit (percent)  56*  25  1438 
Claims coded at 98941 that were upcoded (percent)  118  15  923 
Services that remained active/corrective throughout treatment episode (percent)  181  50  4358 
Number of claims from initial visit to maintenance therapy (mean)  56*  14  919 
Number of claims from initial visit to maintenance therapy (median)  56*  9  711 
Appropriate use of acute treatment (AT) modifier could not be determined 
181  9  514 
(percent) 
Appropriate use of AT modifier could not be determined (dollars)  181  $38,780,967   $20,119,585$57,442,349 
Claim failed to meet one or more of the documentation requirements (percent)  188  83 
7788 
Record includes a treatment plan (percent)  188  76 
6982 
Source:  OIG analysis of chiropractic claims data, 2008.    
     
*Because some treatment episodes last years, some maintenance claims were excluded because we were unable to determine when the initial visit occurred. 
 
  OEI-07-07-00390  INAPPROPRIATE MEDICARE PAYMENTS FOR CHIROPRACTIC SERVICES   23   
   
 A P P E N D I X   ~   C  
Figure C-1:  Sample DocumentationTravel Card 
  OEI-07-07-00390  INAPPROPRIATE MEDICARE PAYMENTS FOR CHIROPRACTIC SERVICES   24   
   
A P P E N D I X   ~   C  
 
Figure C-2:  Sample DocumentationStandardized Form 
  OEI-07-07-00390  INAPPROPRIATE MEDICARE PAYMENTS FOR CHIROPRACTIC SERVICES   25   
   
 A P P E N D I X   ~   D  
Agency Comments 
{/"~vAo""".4",,-
DEPARTME TOFHEALTH&HUMANSERVICES CenlerslorMedicare&MedicaidServices
....>~
1~"oOut
200IndependenceAvenueSW
Washington,DC 20201
MAR 0 t 2~OO
DATE:
TO: Daniel R. Levinson
lnspectorGeneral
:J-ti
~~J.-
FRO harlene Prizzera /"'/ , .
~
ActingAdministrator
SUBJECT: OfficcofInspectorGeneral(DIG) Draft Report: "InappropriateMcdicare
Paymentsfor Chiropractic ervices," (OEI-07-07-00390)
Thank you fortheopportunity tocommcnton theOIGdraftrcportentitled,
"Inappropriate Medical' Payments for hiropracticServices." , heCentersforMcdicare
&MedicaidService (eMS)appreciatesthetimeandresourcestheDIG hasinve ted to
researchand report onthi issue. Basedona2005DIG reportonthis ametopic CM is
pleasedtorcportthatwc madeappropriatechange tothecurrcntclaims processing
opcrationsto reviewclaimsduringtheepisodeofcarc, peeificallywiththe
Compr hensive Error RateTesting( ERT) program. PCI'your2005 recommendationto
helpCM idcntifyclaimsfor non-coverd maintenancctherapy ERThasbeen rcviewing
6monthsofclaimsdataassociatcd witheachsamplcdchiropracticclaimgivingCMSa
bctterviewofthccpi odeofcare. Thischangctoourclaimsprocesshasbcen
worthwhilcand ha helped usto identify inappropriatebillingsfor maintenancetherapy.
Whilewcconcurwith yourcurrentrecommendation toexpand thi 6month rcvicwtothe
entiretreatmentepisodebackto thc initial vi itto help identifyotherpotentially
inappropriateclaim for maintenance therapy we want toanalyze thcco t and benefits
beforewefully implementthe recommendationinthemostrecentreport.
OIGRecommendation
Implementandenforce policiesto prevcntfuture payment formaintenancetherapy by
implcmentingacaponall chiropracticclaims basedon I' commendationsfrom a
onsortiumofclinical provider anddevelopinganewmodifi r.
CMSResponse
TheDIG recommendsthat CMS implementacaponall wed chiropracticclaimsbased
on recommendationsfrom aconsortiumofclinical providcrs. M would need objective
dataandstudicsinorderto imposcanationalcapon thenumberofsessionsa
chiropractorcould providetoa Medicarebeneficiary. Although wedo notbelieve
  OEI-07-07-00390  INAPPROPRIATE MEDICARE PAYMENTS FOR CHIROPRACTIC SERVICES   26    
     
AA PP PP EE NN DD II XX    ~~    DD   
Page2- Daniel R. Levinson
sufficient studiesordatacurrentlyexist.C will continueto rcviewanysuchresearch
studiesas theybecomeavailable.
The010also recommendsthatCMSdevelopanew moditier forproviderstouscto
reporttoCMSIhaladifferentepisodeofcareisbeginning. Weappreciate the ugge tion
and are working Ihroughthepolicyandoperational implicationsofrequiringan
additional modifierand will considerimplementingitifit is feasible.
OIG Recommendation
Reviewentiretreatmentepisodesratherthan individual chiropracticclaimstostrengthen
theabilityoftheCERTtodetecterrorsinchiropracticclaims.
C SResponse
As we notedearlier. theCM agreeswithOIO'srecommendation that theCERT
contractorshould reviewmedical recordsthaI precedetheservicedateorthechiropractic
claimbeingreviewed to look lor possiblenon-covered maintenancetherapy. Forseveral
months now, the CERTcontractorhas been reviewing6monthsofmedical recordstor
eachchiropracticclaim included intheCERTsample lookingtobesurethatthesampled
claimcould not beconsideredamaintenance visit. CERTconsidersclaimsthatare
maintenance visitstobeerror.
Thischangewas implemented in responsetothe OIO'sJune2005 report. which looked
atchiropracticclaimssubmitted in2001. Atier M eonsultcdwith itscontractorsand
thechiropracticassociations. M determined thata reviewof6 monthsofmedical
recordswould providesufficient informationtodetermine iftheservicebilled was
maintenancetherapy. In fact.asa resultofyourrecommendationand the implementation
ofthe6 month requirement.the CERTprogram reported an increaseintheerrors for
chiropracticclaims. From2005 to2006. thechiropracticclaimserrorrateincreased from
8.9percent to 15.3 percent.
Again, whiIe we concurthata full reviewoftheentiretreatmentepi ode would further
help identifypotential errors.expandingtheCERTreviewto includethe initial claim
would requireadditional funding. Basedonourresearch.it wouldcosttheCERT
programanadditional S150.000-$200.000per yeartoexpandourreviewsofchiropractic
episodes from 6to 12 monthsand more ifwereto include thebeginningoftheepisode.
Inaddition. CM would havetoconsiderthe burdenon the providersto furnish
additional medical documentation. CM would have toconductacost benefitanalysisof
expandingthe review.
OIG Recommendation
Ensurethatchiropracticclaim are not paid unIe documentationrequirementsare met.
 
   OOEEII--0077--0077--0000339900   IINNAAPPPPRROOPPRRIIAATTEE  MMEEDDIICCAARREE  PPAAYYMMEENNTTSS  FFOORR  CCHHIIRROOPPRRAACCTTIICC  SSEERRVVIICCEESS     2277    
   
A P P E N D I X   ~   D  
Page3- Daniel R. Levinson
CMS Response
Basedondataanaly'is. contractorsidentifyprovider that havea likelihood ofa
sustained or high level ofpaymenterror. Forthose providers. thecontractorwill review
theprovider'selaimsbasedon thecontractor'smedical reviewstrategy. When
performingthisreview,contractorsmaycollectdocumentation. suchasclaims
information, related to the patient' condition bdoreand anertheserviceinordertogeta
morecomplete pictureofthe patient'sclinicalcondition.
Inaccordance withcurrent practice.a provider'sclaimsthatare reviewed betorethe
claimispaid will not receivepayment until thecontractorreceivessufficient
documentationtodeterminethat paymemshould be made. Sincea lackofsufticient
documentationollencausesan increase in the provider'sdeniedclaims.. the likelihood
increases thattheprovidermay beselected torfurther review, Delayingpayment
indefinitelywhile wDiting torall requested documentation would preventthe contractor
from processingtheclaims inatimel manner.
OIG Recommendation
Takeappropriatecorrectiveaction regarding the undocumented, medically unneccssary,
and mi codedclaim inoursample.
CMS Response
We will adviseourcontractor tocontinuetoemphasizethatappropriatedocumentation
mustbe maintained. Wewill informourcontractorsofthe findings in thisOIG report
and request that they includethe informationcontained in this reporl aspartofthedata
theyconsiderwhen prioritizingtheirstrategies. Inaddition, thecontractorswill bc
instructedto takeany neces arycorrectiveaction". includingdeterminingoverpayments.
when appropriate.
TheCMSthankstheOIG for it eftortson thisreport and for highlightingthispotential
vulnerabilityinthe Medicare program. CM iscommitled tocontinuallyreviewingand
retiningour processesto improve the Medicare program,and we will takethe findings of
thisreport underconsiderationaswecontinuetostrengthen ouroversighteffortsto
further reduce improperpayments in the Medicare program. We look forward to
continuingto work with the OIG to idenlifYand preventfraud, waste.and abuse inthe
Medicare program.
 
  OEI-07-07-00390  INAPPROPRIATE MEDICARE PAYMENTS FOR CHIROPRACTIC SERVICES   28   
   
 A C K N O W L E D G M E N T S  
 
This report was prepared under the direction of Brian T. Pattison, 
Regional Inspector General for Evaluation and Inspections in the 
Kansas City regional office. 
Brian Whitley served as the team leader for this study.  Other principal 
Office of Evaluation and Inspections staff from the Kansas City regional 
office who contributed to the report include Michael Barrett, 
Megan Buck, and Julie Dusold; central office staff who contributed 
include Rob Gibbons and Kevin Manley.  
 
  OEI-07-07-00390  INAPPROPRIATE MEDICARE PAYMENTS FOR CHIROPRACTIC SERVICES   29