DATE:  Jan 13, 1999 
FROM:  June Gibbs Brown 
Inspector General 
SUBJECT:	 Chiropractic Services Covered by Medicare Managed Care Organizations (OEI-
04-97-00494) 
TO:	 Nancy-Ann Min DeParle 
Administrator 
Health Care Financing Administration 
This report describes policies and practices for providing chiropractic services to Medicare 
enrollees in seven managed care organizations (MCOs).  It was prepared in response to a 
request by Health Care Financing Administration (HCFA) staff. 
BACKGROUND 
We recently completed an inspection on controls over chiropractic services for Medicare and 
Medicaid beneficiaries (OEI-04-97-00490).  As part of that inspection, we surveyed the 10 
largest Medicare MCOs from 10 different States. 
Seven of the 10 MCOs responded to our survey and provided information on their chiropractic 
policies and practices for Medicare beneficiaries.  However, the seven MCOs did not respond in 
time for us to incorporate their data into our report on controls over chiropractic services. 
Further, only four of the seven provided utilization data showing the extent that they had 
provided chiropractic services for their Medicare enrollees for 1995 and 1996. 
Following issuance of the report on controls over chiropractic services, HCFA staff requested 
that we provide them information on chiropractic services in the seven MCOs that responded to 
our survey.  The seven MCOs represent a limited sample, and we do not present their policies 
and practices for providing chiropractic services as being representative of all MCOs.  In order 
to project nationally, we would need to analyze a statistically projectable random sample.  The 
HCFA staff, however, said that a report on the seven MCOs would enhance their understanding 
of MCO policies and practices for providing chiropractic services.  They were particularly 
interested in comparing Medicare MCO and fee for service (FFS) utilization data. 
SCOPE AND METHODOLOGY 
This report is based largely on data provided by the seven MCOs that responded to our survey. 
We followed up survey responses and interviewed officials at each MCO, by telephone, to 
clarify policies and practices as appropriate.  Four of the seven MCOs provided chiropractic  Page 2 - Nancy-Ann Min DeParle 
utilization data for 1995 and 1996.  We compared this utilization data to that for FFS 
organizations.  We obtained FFS utilization data from HCFAs Part B Extract and Summary 
System data base and a 1 percent sample of HCFAs National Claims History File. Additionally, 
we identified the number of Medicare beneficiaries enrolled in FFS programs from HCFAs Data 
Compendiums. 
UTILIZATION 
In the four MCOs that provided utilization data, the percentage of Medicare MCO beneficiaries 
who used chiropractic services was low, as compared with Medicare FFS chiropractic 
utilization.  For example, in 1996, about 1.5 percent of Medicare MCO beneficiaries used 
chiropractic services.  In contrast, more than 4 percent of Medicare FFS beneficiaries utilized 
chiropractic services during the same time period. 
Utilization data presented by the four MCOs showed that, on average, Medicare MCO 
beneficiaries obtained slightly more chiropractic treatments per year than did FFS Medicare 
beneficiaries.  To illustrate, Medicare MCO beneficiaries received almost 12 chiropractic 
treatments per year for 1996, whereas Medicare FFS beneficiaries received almost 9 treatments. 
The table below summarizes utilization data for the four MCOs and Medicare FFS programs. 
Medicare Chiropractic Utilization 
1995  1996 
Four MCOs  FFS  Four MCOs  FFS 
Medicare Beneficiaries  258,452  34,288,372  282,809  33,509,382 
Beneficiaries receiving  3,181  1,424,700  4,378  1,391,600 
chiropractic services 
% of beneficiaries receiving  1.23%  4.16%  1.55%  4.15% 
chiropractic services 
Number of treatments  30,605  12,345,001  50,981  12,269,909 
received 
Number of treatments per  9.62  8.67  11.64  8.82 
beneficiary  Page 3 - Nancy-Ann Min DeParle 
ACCESS 
More Medicare beneficiaries used chiropractic services when an MCO allowed direct access 
versus requiring a physician referral.  To illustrate, almost 2 percent of the beneficiaries with 
direct access options used chiropractic services for 1995 and 1996.  Conversely, less than 0.5 
percent of the beneficiaries with physician referral requirements used chiropractic services during 
the same time period.  Of the four MCOs that provided chiropractic utilization data, two 
allowed direct access and two required physician referrals. 
Overall, the policies for accessing chiropractic services varied among the seven MCOs that 
responded to our survey.  Three MCOs allowed direct access to chiropractic services, and the 
remaining four required physician referral. 
Policies also varied among the three MCOs that allowed direct access to chiropractic service. 
Two of the three allowed an unlimited number of treatments with appropriate medical 
documentation.  The third MCO limited direct access by beneficiaries to 12 treatments per year. 
However, the MCO could authorize additional treatments. 
Conversely, the four MCOs that required physician referral had fairly consistent policies.  To 
illustrate, all four allowed primary care physicians (PCPs) to specify the number of chiropractic 
treatments without prior authorization or review from the MCO. 
COVERED SERVICES 
All seven MCOs covered manual manipulation of the spine to correct a subluxation, as required 
by HCFA.  Additionally, one MCO expanded its chiropractic benefit to include relief of axial 
skeletal muscle pain when authorized by a PCP. 
Six of the seven MCOs required X-rays to validate the medical necessity of chiropractic 
services.  The X-rays had to show subluxation of the spine to justify chiropractic service.  The 
six MCOs paid for the X-rays.  The remaining MCO did not require X-rays. 
CO-PAYMENTS 
Six MCOs required a co-payment to access chiropractic services.  The seventh MCO did not 
require a co-payment. 
The co-payments required by six of the MCOs, ranged from $3-$15.  Five of the six MCOs said 
their co-payment for chiropractic service was the same as that for other types of services offered 
in their plans.  The sixth MCO said its co-payment for chiropractic service was lower than what 
it required for other types of services.  Page 4 - Nancy-Ann Min DeParle 
POST PAYMENT REVIEWS 
Five of the seven MCOs conducted utilization or post payment reviews.  Some of the items 
reviewed were chiropractic billing, corroboration of medical necessity, patient satisfaction, 
communication between chiropractors and PCPs, and number of chiropractic visits per year. 
Based on such reviews, one of the five MCOs had denied payments to chiropractors.  Another 
MCO had referred 48 chiropractors to the FBI for investigation of fraudulent activities.  At the 
time we prepared this report, the 48 chiropractors were still under investigation.  None of the 
other MCOs had referred chiropractors for investigation. 
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We hope that you find this information responsive to your request.  Please do not hesitate to call 
me or George Grob, Deputy Inspector General for Evaluation and Inspections, or have your 
staff call Mary Beth Clarke at (202) 619-2481 with any comments or questions you wish to 
share. 
cc:  Robert Berenson 
Director, Center for 
Health Plans and Providers 
Kathy Buto 
Deputy Director, Center for 
Health Plans and Providers 
Tom Gustafson

Deputy Director

Office of Strategic Planning