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Department of Health and Human Services 


OFFICE OF 

INSPECTOR GENERAL 

CHIROPRACTIC SERVICES IN THE


MEDICARE PROGRAM: 
 PAYMENT VULNERABILITY ANALYSIS 

Inspector General 

June 2005 

OEI-09-02-00530 
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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 OIG's Office of Audit Services provides all 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 in order to reduce waste, abuse, and 

mismanagement and to promote economy and efficiency throughout the department. 

Office of Evaluation and Inspections 

The OIG's Office of Evaluation and Inspections (OEI) conducts management and 

program evaluations (called inspections) that focus on issues of concern to the 

department, the Congress, and the public. The findings and recommendations contained 

in the inspections reports generate rapid, accurate, and up-to-date information on the 

efficiency, vulnerability, and effectiveness of departmental programs. The OEI also 

oversees State Medicaid fraud control units, which investigate and prosecute fraud and 

patient abuse in the Medicaid program. 

Office of Investiga ions t

The OIG's Office of Investigations (OI) conducts criminal, civil, and administrative 

investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries 

and of unjust enrichment by providers. The investigative efforts of OI lead to criminal 

convictions, administrative sanctions, 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 in OIG's internal operations. The OCIG imposes program exclusions and 

civil monetary penalties on health care providers and litigates those actions within the 

department. The OCIG also represents OIG in the global settlement of cases arising 

under the Civil False Claims Act, develops and monitors corporate integrity agreements, 

develops compliance program guidances, renders advisory opinions on OIG sanctions to 

the health care community, and issues fraud alerts and other industry guidance. 
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∆ E X E C U T I V E S U M M A R Y 

OBJECTIVE 

To determine the underlying causes of, and potential ways to reduce, 

vulnerabilities associated with Medicare payments for chiropractic 

services. 

BACKGROUND 

In 1972, Congress passed Public Law 92-603, which amended section 

1861(r) of the Social Security Act (the Act) to define chiropractors as 

physicians who are eligible for Medicare reimbursement, but only for 

manual manipulation of the spine to correct a subluxation, or 

malfunction of the spine. Federal regulations (42 CFR § 410.21(b)) 

further limit Medicare payment to treatment of subluxations that result 

in a neuromusculoskeletal condition for which manual manipulation is 

appropriate treatment. In addition to these specific provisions, sections 

1862(a)(1)(A) and 1833(e) of the Act require that all services billed to 

Medicare, including chiropractic manipulations, be medically necessary 

and supported by documentation. 

The Medicare Carriers Manual (the Manual) outlines additional 

coverage criteria for chiropractic services billed to Medicare.1 Pursuant 

to section 2251.2 of the Manual, the existence of a subluxation must be 

documented through an X-ray or physical examination and chiropractic 

services must be provided as part of a written plan of care that should 

include specific goals and measures to evaluate effectiveness. Section 

2251.3 of the Manual states that chiropractic treatment “. . . must 

provide a reasonable expectation of recovery or improvement of 

function.” The same Manual section states that “. . . ongoing 

maintenance therapy is not considered to be medically necessary under 

the Medicare program,” and is therefore noncovered. 

Chiropractic has experienced considerable growth in Medicare, from 

11.2 million services and $255 million allowed in 1994 to 21 million 

services and $683 million allowed in 2004. In previous studies, 

published in 1986, 1998, and 1999, the Inspector General found that a 

1 At the time of our study, the references to the Medicare Carriers Manual were accurate. 

The Centers for Medicare & Medicaid Services has since moved to web-based manuals. The 

Carriers Manual sections cited in this report are now found in the Medicare Benefit Policy 

Manual, Pub. 100-2, Chapter 15, sections 30.5 and 240. 

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EXECUTIVE SUMMARY 

significant vulnerability existed in connection with chiropractic services, 

particularly concerning maintenance care.2 

To gain a deeper understanding of the underlying causes of these 

vulnerabilities and ways to reduce them, we selected a simple random 

sample of 400 Medicare services (total allowed amount = $12,638.38) 

submitted by chiropractors and allowed in 2001. We contracted with 

practicing chiropractors who reviewed each service according to a 

standard protocol, which was based on Medicare coverage guidelines 

and requirements. The review instrument solicited information about 

the beneficiary’s chiropractic treatment as a whole and about the 

individual sampled service in particular. This enabled the reviewers to 

determine if the services billed to Medicare were covered, coded 

correctly, and properly documented. In particular, it enabled the 

reviewers to determine the extent to which payments were made for 

maintenance services, which are not covered under Medicare. Based on 

the results of this review, we also determined the likelihood of services 

being noncovered depending on the number of services billed per 

episode of care. Knowing this, Medicare carriers can make informed 

choices regarding the level of effort to expend in reviewing questionable 

billings based on billing patterns. 

Because we only reviewed services provided by chiropractors in 2001, 

our sample results cannot be extrapolated to other periods. Accordingly, 

we make no inferences to chiropractic error rates in subsequent years. 

FINDINGS 

Maintenance services were the most common type of noncovered 

chiropractic services that Medicare paid for in 2001. Medicare 

carriers routinely deny all chiropractic claims that do not carry a code 

for spinal manipulation, which is, by law, the only treatment for which 

chiropractors may be reimbursed. Our medical reviewers found that 

although billed with an allowable code, 57 percent of these services did 

not meet Medicare coverage criteria (i.e., were noncovered). In addition, 

16 percent were miscoded or billed at the wrong level of spinal 

manipulation, and 6 percent were undocumented. Twelve percent had 

a irop ts (OEI-04-97-00496), Chi opr ctic 2 Utilization Par meters for Ch ractic Treatmen r a

Care: Controls Used by Medicare, Medicaid, a d Ot n her Payers (OEI-04-97-00490), and

In ection of Chirop sp ractic Servi es under Medica c re (OAI-05-86-00002). 

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EXECUTIVE SUMMARY 

multiple errors, yielding an overall error rate of 67 percent, resulting in 

$285 million in improper payments. 

Medical reviewers determined that the majority of inappropriately paid 

services were maintenance treatments ($186 million in allowed 

payments), which Medicare defines as medically unnecessary, and are 

therefore not covered. Another 14 percent ($65 million) were found to 

be medically unnecessary for other reasons. Medicare also allowed 

$24 million for services billed with a spinal manipulation code that were 

actually extraspinal manipulations or non-manipulative treatment, 

such as massage. Apart from coverage issues, upcoding was also a 

significant problem, resulting in a $15 million overpayment. 

Supporting documentation for chiropractic services rarely met all 

Medicare Carriers Manual requirements. The Manual requires that 

specific supporting documentation be present in the chiropractic record. 

Nearly 94 percent of chiropractic services, though, lacked at least one of 

the supporting documentation elements listed in section 2251.2 of the 

Manual (including those that were completely undocumented). The lack 

of one or more of these elements did not automatically lead us to 

conclude a service was noncovered, although these determinations were 

often related. For instance, 34 percent of chiropractic services were not 

supported by an evaluation that met the Manual’s specific requirements 

for documenting a subluxation. Most, but not all, of these services were 

also determined to be noncovered. 

Lack of medical necessity is directly related to service volume. As 

chiropractic care extends beyond 12 treatments in a year, it becomes 

increasingly likely that individual services are medically unnecessary. 

The likelihood of a service being medically unnecessary increases even 

more significantly after 24 treatments. Accordingly, identifying and 

carefully scrutinizing services beyond a certain frequency threshold 

could result in significant savings. Although frequency-based controls 

are common among carriers and in the private sector, the Centers for 

Medicare & Medicaid Services (CMS) does not have a national policy 

addressing their use. 

Carrier controls to prevent overutilization are inconsistent. 

Although all carriers have some mechanisms to prevent and recoup 

improper payments for chiropractic services, a significant vulnerability 

surrounding this benefit persists. 

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EXECUTIVE SUMMARY

RECOMMENDATIONS 

Based on the volume of medically unnecessary, undocumented, and 

noncovered services allowed, chiropractic services represent a 

significant vulnerability for the Medicare program. Therefore, we 

recommend that CMS take the following actions: 

Ensure that chiropractic services comply with Medicare coverage 

criteria. CMS should require that its carriers or Program Safeguard 

Contractors conduct service-specific reviews of chiropractic services to 

identify improper payments. CMS should also implement national 

frequency-based controls to target high-volume services for review, since 

our medical review identified a strong correlation between high service 

volume and lack of medical necessity. When conducting reviews of 

individual providers, it is imperative that reviewers collect the entire 

records associated with services selected as part of a service-specific 

review. Several records we reviewed would have appeared legitimate 

for any one particular day of service; however, that day’s documentation 

was repeated verbatim for the entirety of the patient’s treatment. 

Require that its carriers educate chiropractors on Medicare Carriers 

Manual requirements for supporting documentation. Many 

chiropractors seem unaware of the specific documentation requirements 

outlined in the Manual. CMS should address this lack of knowledge by 

directing its carriers to issue provider bulletins reminding chiropractors 

of their responsibilities. 

In addition to these recommendations, we have forwarded information 

on the noncovered, miscoded, and undocumented services identified in 

our sample to CMS for appropriate action. 

AGENCY COMMENTS AND OIG RESPONSE 

In its comments on our draft report, CMS agreed with our findings and 

recommendations. The agency has clarified its chiropractic coverage 

criteria and indicated that most carriers are taking steps to reduce 

chiropractic error rates, including targeted educational efforts and 

service-specific medical reviews. In addition, as of October 1, 2004, 

CMS has required that chiropractors use the –AT modifier to indicate 

that a service is not maintenance; only claims to which this modifier is 

attached are payable. 

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EXECUTIVE SUMMARY 

We appreciate CMS’s response to our report, and support the steps the 

agency is currently undertaking to help prevent paying for noncovered, 

miscoded, and undocumented services. 

CMS noted in its comments that while this Office of Inspector General 

(OIG) study projected that 67 percent of the chiropractic services 

allowed by Medicare did not meet program requirements, CMS’s 

Comprehensive Error Rate Testing (CERT) program identified a claims 

paid error rate of approximately 16 percent for claims submitted by 

chiropractors in 2002. CMS further noted that differences in the 

methodological approaches accounted for the significantly different 

rates. CMS recognized that OIG’s review of a beneficiary’s entire course 

of treatment enabled us to determine that approximately 40 percent of 

all chiropractic services are attributable to maintenance care, and thus 

are not covered under Medicare. In contrast, the CERT paid claims 

error rate is based on a review of a single claim, which limits its ability 

to detect uncovered maintenance costs. 

We agree with CMS and would like to emphasize that the purpose of 

this inspection was to determine the underlying causes of, and potential 

ways to reduce, vulnerabilities associated with payments for 

chiropractic services. It was not designed to reproduce, or to review, the 

CERT paid claims error rate. In addition to the different 

methodological approaches that are noted above, the CERT used 2002 

data, whereas our data was drawn from 2001. Hence, our results 

cannot be compared directly to the CERT program results. 

Furthermore, chiropractic payment errors, while a significant 

vulnerability, contribute only minimally to the overall CERT national 

paid claims error rate. Medicare allowed approximately $191 billion for 

Medicare fee-for-service claims in 2001. Chiropractic services accounted 

for $500 million, or 0.26 percent of this amount. Therefore, the 

chiropractic-specific error rate has minimal influence on the overall 

CERT error rate for fee-for-service claims. 

Given that Medicare payments for chiropractic services have continued 

to increase since 2001, the need for a more effective way to eliminate 

inappropriate maintenance payments is crucial. We recognize that it 

may not be practical for the CERT program to expend its limited 

resources to collect the extensive documentation that we used in our 

review. Therefore, in the future, CMS may wish to conduct additional 

studies outside the scope of the CERT program to determine costefficient ways to address chiropractic payment errors. 

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∆ T A B L E O F C O N T E N T S 

EXECUTIVE SUMMARY ......................................... i

INTRODUCTION ................................................ 1

FINDINGS ....................................................... 8

Noncovered and miscoded services ............................ 8 

Supporting documentation deficient .......................... 10 

 Medical necessity linked to frequency ......................... 11 

Carrier controls inconsistent ................................. 15 

RECOMMENDATIONS ......................................... 16 

AGENCY COMMENTS ......................................... 19

APPENDIXES .................................................. 21 

A. Detailed Methodology .................................. 21 

B. Further Discussion of the Effects of Removing the X-ray 

Requirement .......................................... 24 

C. Confidence Intervals for Selected Statistics............... 27 

D. Significance Tests for Selected Comparisons.............. 30 

ACKNOWLEDGMENTS ......................................... 31
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∆ I N T R O D U C T I O N 

 OEI-09-02-00530 

OBJECTIVE 

To determine the underlying causes of, and potential ways to reduce, 

vulnerabilities associated with Medicare payments for chiropractic 

services. 

BACKGROUND 

Chiropractic: History and Practice 

According to the American Chiropractic Association, the profession’s 

largest association, chiropractic is “a form of health care aimed 

primarily at enhancing a patient's overall health and well-being without 

the use of drugs or surgery.”3 Central to chiropractic philosophy and 

practice is the use of manual manipulation to correct a subluxation of 

the spine. Etymologically, the term “subluxation” simply means a 

partial dislocation of a joint. Although a single standard definition of 

subluxation in the chiropractic context does not exist, the term is 

generally used by chiropractors to describe “a complex of functional 

and/or structural and/or pathological articular changes that compromise 

neural integrity and may influence organ system function and general 

health.”4 

Chiropractic has established itself and grown as a profession since it 

was founded in 1895. The practice is now licensed in all 50 States, and 

at least 16 accredited chiropractic colleges confer Doctor of Chiropractic 

degrees on their graduates. In 1970, there were approximately 

13,000 licensed chiropractors in the United States. According to the 

Bureau of Labor Statistics, that number grew to 50,000 in 2000. Both 

the Bureau and the American Chiropractic Association predict that the 

number of chiropractors will continue to increase in the future. 

Patients most often seek out chiropractors for treatment of back pain, 

especially low back pain. Low back pain is a pervasive American health 

3 “Chiropractic: A Rapidly Growing Profession.” Consumers/Media. American 

Chiropractic Association. Retrieved October 23, 2003, 

http://www.amerchiro.org/media/growing_profession.shtml. 4 “Chiropractic Paradigm.” Association of Chiropractic Colleges. Retrieved October 24, 

2003, http://www.chirocolleges.org/missiont.html. 

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INTROD UCTION 

problem, from which approximately 31 million citizens suffer at any 

given time.5

Medicare Coverage of and Requirements for Chiropractic Services 

General provisions of the Social Security Act (the Act) govern Medicare 

reimbursement of all services, including chiropractic services. Section 

1862(a)(1)(A) of the Act states that “. . . no payment may be made 

[under the Medicare title for services that] are not reasonable and 

necessary for the diagnosis or treatment of illness or injury or to 

improve the functioning of a malformed body member.” Section 1833(e) 

requires that providers furnish “such information as may be necessary 

in order to determine the amounts due” in order to receive Medicare 

payment. Related regulations at 42 CFR § 411.15(k) and 

42 CFR § 424.5(a)(6) implement these provisions of Federal law. 

On October 30, 1972, Congress passed the Social Security Amendments 

of 1972, extending Medicare reimbursement to chiropractors, but only 

for manual manipulation of the spine to correct a subluxation 

demonstrated by an X-ray.6,7 Federal regulations (42 CFR § 410.21(b)) 

further limit Medicare chiropractic coverage to treatment of 

subluxations that result in a neuromusculoskeletal condition for which 

manual manipulation is appropriate treatment. Restricting 

reimbursement to spinal manipulation means Medicare may pay 

chiropractors for only three Current Procedural Terminology (CPT) 

codes: 98940 (C iropractive Manip lative Treat ent; spinal, on o two h u m e t

regions), 98941 (three t r r gio s o fou e n ), and 98942 (five regions). In

2001, CPT code 98942 accounted for fewer than 10 percent of the 

chiropractic services allowed by Medicare, with each of the lower-level 

CPT codes accounting for approximately 45 percent of the total. 

The Balanced Budget Act of 1997 removed the X-ray requirement as of 

January 1, 2000, and instructed the Secretary of the Department of 

Health and Human Services to establish utilization guidelines for 

5 Jensen, M., M. Brant-Zawadzki, N. Obuchowski, et al. “Magnetic Resonance Imaging of 

the Lumbar Spine in People Without Back Pain.” New England Journal of Medicine 1994; 

vol. 331: 69-116. Cited in: “Back Pain Statistics.” American Chiropractic Association. 

Retrieved October 24, 2003, http://www.amerchiro.org/media/whatis/benefits.shtml. 

6 Note that no payment is provided to chiropractors for services other than manual 

manipulation of the spine; i.e., X-rays and other diagnostic tests are not covered services 

when performed by chiropractors. 

7 The chiropractic provisions (section 273) of the Social Security Amendments of 1972 

modified section 1861(r)(5) of the Act. 

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INTRODUCTION

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subluxations not evidenced by an X-ray. Guidelines for demonstrating a 

subluxation are found in section 2251.2 of the Medicare Carriers 

Manual (the Manual).8 The Manual defines a subluxation as “a motion 

segment, in which alignment, movement integrity, and/or physical 

function of the spine are altered although contact between joint surfaces 

remains intact.” If used, an X-ray generally must be taken between 

12 months before and 3 months after the start of treatment. A physical 

examination must identify at least two criteria for treatment, one of 

which must be asymmetry/misalignment or a range of motion 

abnormality. The other criterion can be pain/tenderness or changes in 

the associated soft tissue. 

No matter how the presence of a subluxation is established, section 

2251.3 of the Manual stipulates that beneficiaries also must present “a 

significant health problem in the form of a neuromusculoskeletal 

condition necessitating treatment, and the manipulative services 

rendered must have a direct therapeutic relationship to the patient’s 

condition and provide reasonable expectation of recovery or 

improvement of function.” Furthermore, section 2251.3 of the Manual 

states that “. . . [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 is not a Medicare benefit. Once the maximum therapeutic 

benefit has been achieved for a given condition, ongoing maintenance 

therapy is not considered to be medically necessary under the Medicare 

program.” In other words, Medicare covers only treatment of acute or 

chronic subluxations, not preventive or maintenance care.9 The 

Manual also lists eight absolute and five relative contraindications 

regarding manual manipulation of the spine, such as acute fractures of 

the spine or severe demineralization of the bones. Such conditions 

preclude the use of or impart significant risk to spinal manipulation. 

Section 2251.2 of the Manual requires that chiropractors document an 

initial history of the patient’s complaint and establish a treatment plan. 

8 At the time of our study, the references to the Medicare Carriers Manual were accurate. 

The Centers for Medicare & Medicaid Services has since moved to web-based manuals. The 

Carriers Manual sections cited in this report are now found in the Medicare Benefit Policy 

Manual, Pub. 100-2, Chapter 15, sections 30.5 and 240. 

9 Revisions to the Medicare Carriers Manual issued on May 28, 2004, further clarify the 

definition of maintenance care. Since our inspection focused on services provided in 2001, 

we cite here the definition effective during that year. 

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INTRODUCTION 

The treatment plan should include the expected duration and frequency 

of the patient’s treatment, specific treatment goals, and objective 

measures against which to evaluate effectiveness. Though supporting 

documentation must be kept in the medical record, it need not normally 

be submitted to the carrier for a claim to be processed and paid. 

Growth in Medicare Chiropractic Services 

Medicare reimbursement of chiropractic services has increased 

dramatically in recent years. In 1994, the program allowed $255 million 

for 11.2 million services for chiropractic manipulation. By 2004, those 

numbers had grown to $683 million and 21 million services allowed. As 

shown in Figure 1, the rate of growth in annual services and dollars 

allowed has accelerated since the X-ray requirement was lifted in 2000. 

For a detailed analysis on the effect of removing the X-ray requirement, 

see Appendix B. 

FIGURE 1 

Medicare 

reimbursement for 

chiropractic has 

grown more rapidly 

since 2000. 

$700 24.0 

$525 18.0 

$350 12.0 

$175 6.0 

$0 0.0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 

Allowed dollars llions (mi ) All i illions) owed serv ces (m

Source: National Claims History Part B 1 Percent Files, 1994 – 2002

and Medicare Part B Extract and Summary System, 2003 - 2004 

Prior Inspector General Work 

In November 1999, the Office of Inspector General (OIG) responded to a 

request from the Centers for Medicare & Medicaid Services (CMS) to 

analyze the potential impact of establishing chiropractic utilization 

review thresholds at either 18 or 12 treatments per year. In Utilization 

Parameters for Chiropra eatments ctic Tr (OEI-04-97-00496), OIG 

concluded that the proposed thresholds would have saved Medicare 

$19.4 million and $30.2 million, respectively, in 2000, and that 

relatively few beneficiaries would be affected by either parameter. 

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INTRODUCTION

 OEI-09-02-00530 

Therefore, OIG recommended that CMS institute a national utilization 

review threshold of 12 services per year. CMS ultimately did not adopt 

a national frequency threshold and continues to leave the matter to 

individual carriers’ discretion. 

In September 1998, OIG released a report entitled Chiropractic Care: 

Controls Used by Medic re, M dicaid, and Other Payers a e

(OEI-04-97-00490). Based on an analysis of the National Claims 

History Data File, the OIG estimated that $68 million of the 

$294 million Medicare spent on chiropractic treatments in 1996 was for 

chiropractic maintenance treatments. 

In 1986, OIG released a report entitled Insp h ractic ection of C irop

Services under Medicare (OAI-05-86-00002). OIG found that because of 

disagreement about the ability of an X-ray to reveal a subluxation, the 

existing X-ray requirement was not well enforced, might actually have 

been unenforceable, and was highly conducive to abuse. In addition, the 

report described a lack of standards within the chiropractic profession 

and a number of questionable practices. For these reasons, OIG 

concluded that chiropractic constituted a serious vulnerability to the 

Medicare program. 

METHODOLOGY 

We used multiple methodologies to accomplish our objectives. The 

primary method was medical review of chiropractic records. We also 

interviewed carriers, analyzed historical claims data, and accessed 

external Government data sources. Point estimates with confidence 

intervals for selected statistics and the results of statistical tests for 

selected comparisons from the findings are contained in Appendixes 

C and D, respectively. 

Medical Review10 

We defined our universe as 91 percent of services provided by 

chiropractors in 2001 and allowed by Medicare.11 This universe 

10 For a more detailed discussion of the medical review methodology, refer to Appendix A. 

11 A data processing error prevented us from using 100 percent of claims. The original 

data was contained in five compressed files. We decompressed these files and merged them 

into a single population data set. However, one of the smaller files failed to read into our 

population data set correctly, and therefore, contributed far fewer claims than expected to 

the population. Most of the omitted claims were for beneficiaries with Medicare numbers 

associated with the Railroad Retirement Board or the State of Massachusetts. 

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INTROD UCTION 

contained 14,497,406 claims with a total allowed amount of 

$457,444,574.32. To make statistically valid projections of the dollar 

value of all noncovered, miscoded, or undocumented chiropractic 

services allowed in 2001, we selected a simple random sample of 

400 Medicare services from this universe. The total allowed amount in 

our sample was $12,638.38. We then identified and contacted the 

chiropractor listed on each claim for service to request records for the 

beneficiary’s entire course of treatment.12 

We contracted with practicing chiropractors to review each service 

according to a standard protocol, which was based on Medicare coverage 

guidelines and requirements. The review instrument solicited 

information about the beneficiary’s chiropractic treatment as a whole 

and about the individual sampled service in particular. This enabled 

the reviewers to determine if the services billed to Medicare were 

covered, coded correctly, and properly documented. In particular, it 

enabled the reviewers to determine the extent to which payments were 

made for maintenance services, which are not covered under Medicare. 

The results of our review of the 400 sampled services were not shared 

with the Medicare carriers who paid the chiropractors for these services. 

Further, the level of information that we collected would not generally 

be available to those carriers unless they were to conduct a 

comprehensive medical review of a particular chiropractor or patient. 

After completing their review, the contractors returned the completed 

instruments to us for data entry. We analyzed the medical reviews 

using the statistical software packages SAS and SUDAAN. For a more 

detailed discussion of this methodology, see Appendix A. 

Based on the results of this review, we also determined the likelihood of 

services being uncovered depending on the number of services billed per 

episode of care. Knowing this, Medicare carriers can make informed 

choices regarding the level of effort to expend in reviewing questionable 

billings based on billing patterns. 

12 We were unable to contact two chiropractors and removed the two claims associated 

with these chiropractors from consideration. In addition, the chiropractors identified on 

four claims failed to respond to our repeated requests for records—these services were 

considered undocumented. 

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INTRODUCTION 

Because we only reviewed services provided by chiropractors in 2001, 

our sample results cannot be extrapolated to other periods. Accordingly, 

we make no inferences to chiropractic error rates in subsequent years. 

Additional Methods 

We conducted telephone interviews with all Medicare carriers using a 

standardized interview guide. We also collected policy guidance that 

had been issued by each carrier to its provider community. We 

researched carriers’ Local Medical Review Policies, as well as laws, 

regulations, and policy, concerning the chiropractic benefit. 

We reviewed literature from chiropractic organizations and other 

sources to gather background on chiropractic and help refine our 

medical review instrument. Information from Government sources, 

such as the Agency for Healthcare Research and Quality and the 

Bureau of Labor Statistics, provided background and comparative trend 

data. Lastly, we collected and tabulated information gleaned from 

online brochures for Federal Employee Health Benefits Plans. 

This inspection was conducted in accordance with the Quality 

Standar s for Inspecti d ons issued by the President’s Council on Integrity 

and Efficiency. 

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∆ FINDINGS 

Maintenance services were the most common In 2001, Medicare allowed 

type of noncovered chiropractic services that 

Medicare paid for in 2001 

approximately $457 million for the 

14.5 million chiropractic services in 

our universe. Based on our medical 

review, although billed with allowable spinal manipulation codes, 57 

percent of these services did not meet Medicare coverage criteria (i.e., 

were noncovered). An additional 16 percent were miscoded or billed at 

the wrong level of spinal manipulation, and 6 percent were 

undocumented. Twelve percent had multiple errors, yielding an overall 

error rate of 67 percent. Figure 2 groups the improperly paid services in 

our sample by the type of error and gives statistical projections of these 

errors to the population. 

Sample 

(Proportion) 

Noncovered: 

161 $5,144.85 0.40 $186 

other 57 $1,790.59 0.14 $65 

spine 21 $668.89 0.05 $24 

(13) ($396.95) (0.03) ($14) 

226 $7,207.38 0.57 $261 

) 64 $410.31 0.16 $15 

Undocumented: 

3 $89.63 * * 

- Mi 21 $661.78 0.05 $24 

24 $751.41 0.06 $27 

(49) ($504.17) (0.12) ($18) 

265 0.67 $285 

Figure 2: Noncovered and Miscoded Chiropractic Services 

(400 Total Services) Projected 

Type of error Services 

Allowed 

Amount 

Services Allowed Amount 

(Millions) 

- Not medically necessary: 

maintenance 

- Not medically necessary: 

- Not manual manipulation of the 

- (Both medically unnecessary 

and not manipulation of the spine) 

Total noncovered 

Total coded at wrong level (net

- Non-response 

ssing documentation 

Total undocumented 

(Overlapping errors) 

Total $7,864.93

Source: Medical Review of Year 2001 Services by Practicing Chiropractors. The * indicates the n for that cell is too 

small to reliably project. Totals may not be equal to the sum of individual rows due to rounding. 

Noncovered: Not medically necessary. Section 1862(a)(1)(A) of the Act 

excludes services that are not reasonable and necessary from Medicare 

coverage. However, 55 percent of the chiropractic services allowed in 

2001, totaling $251 million, did not meet Medicare criteria for medical 

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FINDING S 

necessity. Most of these services (74 percent of medically unnecessary 

services—40 percent overall) were correctly billed as spinal 

manipulations but met Medicare’s definition of maintenance care— 

which section 2251.3 of the Manual defines as not medically necessary, 

and is therefore not covered. In general, the remainder were not 

medically necessary because they did not bear a therapeutic 

relationship to the patient’s condition, did not provide a reasonable 

expectation of recovery or functional improvement, or were provided 

with excessive frequency or duration. 

Noncovered: Not manual manipulation of the spine. Section 1861(r)(5) of 

the Act clearly states that Medicare may reimburse chiropractors only 

for manual manipulation of the spine. Chiropractors, though, received 

approximately $24 million from the Medicare program and its 

beneficiaries in 2001 for services other than manual manipulation of the 

spine. These chiropractors bypassed Medicare’s coverage limitations by 

submitting claims with a manipulation code that was allowable but did 

not match the service actually provided. Documentation for several 

services showed that the chiropractor actually performed an extraspinal 

adjustment (e.g., shoulder or knee adjustment) rather than spinal work. 

Other chiropractors billed non-manipulative treatment, such as muscle 

work or network spinal analysis, as spinal manipulation. Our medical 

reviewers, who are practicing chiropractors, noted that some of this 

treatment was acceptable from a chiropractic standpoint, and may have 

been beneficial to the patient. 

Coded at wrong level. Medicare allowed $85 million for spinal 

manipulations billed for the incorrect number of regions according to 

the documentation. The net cost to the program, i.e., the amount 

actually allowed for these services less the amount that would have 

been allowed if the services had been billed correctly, was $15 million. 

Coding errors generally involved upcoding, which is billing a more 

complex and higher-paying service than the one documented in the 

medical record. Approximately 69 percent of services billed for spinal 

manipulation on five regions (CPT code 98942) were upcoded, compared 

to 21 percent of services billed for manipulation on three to four regions 

(CPT code 98941). 

Undocumented. Chiropractors did not provide substantiating 

documentation for approximately 6 percent of the services billed to 

Medicare. Despite repeated requests, we did not receive the medical 

records related to three of the chiropractic services in our sample. The 

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FINDINGS 

chiropractors who rendered an additional 21 of the services provided us 

with records that did not substantiate that any service was rendered on 

the date claimed. Based on these findings, we estimate that Medicare 

may have allowed approximately $27 million in 2001 for undocumented 

chiropractic services. Although some cases of missing documentation 

may be attributable to billing errors (e.g., putting the wrong date on the 

claim form), others may represent services not rendered. In any case, 

claims for services that lack sufficient documentation to show that care 

was provided do not meet the requirements of section 1833(e) of the Act. 

Supporting documentation for chiropractic Separate from the completely

undocumented services previously services rarely met all Medicare Carriers 

discussed, nearly 94 percent of chiropractic Manual requirements services lacked some or all of the 

supporting documentation that section 2251.2 of the Manual requires. 

The lack of one or more of these elements did not automatically lead us 

to conclude that a service was noncovered, although these 

determinations were often related. For example, even if each visit did 

not include a history and physical, which is required by 

section 2251.2 of the Manual, the service rendered on that day was not 

automatically deemed to be medically unnecessary by the chiropractic 

reviewers. Therefore, we did not include lack of supporting 

documentation as a subcategory of “noncovered” in the first finding, and 

we do not project an improperly allowed amount merely related to 

deficiencies in supporting documentation. 

FIGURE 3 

Many services do 

not meet Medicare 

requirements for 

documenting a Diagnosis not 

subluxation. subluxation 

4% 

29% 

67% 

26% 

8% 

Proper 

evaluations 

No diagnosis 

Subluxation 

diagnosis 

No evaluation 

Improper 

evaluation 

Source: Medical Review of Year 2001 Claims by Practicing Chiropractors 

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FINDINGS 

Approximately 34 percent of services were not supported by an 

evaluation of the patient that met the Manual’s requirements for 

documenting a subluxation. In fact, there was no evaluation at all in 

the medical record for 26 percent of services; the remaining 8 percent 

were supported by tests that did not meet the requirements established 

in the Manual. Furthermore, more than one-third of “proper” 

evaluations—those meeting Medicare rules for demonstrating the 

presence of a subluxation—resulted in no diagnosis (29 percent) or a 

diagnosis other than subluxation of the spine (4 percent). 

Though a documentation requirement, chiropractors infrequently 

developed treatment plans for their Medicare patients. Just 28 percent 

of chiropractic services were provided as part of a written plan of care, 

and only 23 percent of those plans included specific treatment goals and 

objective measures to evaluate progress towards those goals. The 

absence of specific goals was a strong indicator of unnecessary care; only 

14 percent of services associated with specific, written goals were 

medically unnecessary compared to 61 percent of those without written 

goals. 

Though infrequently evaluated for them, Medicare beneficiaries rarely 

present contraindications to chiropractic treatment. 

Chiropractors do not routinely evaluate patients for conditions 

mentioned in the Manual, such as severe demineralization of the bones 

or spinal malignancies, which could contraindicate spinal manipulation. 

We found that 66 percent of all chiropractic services were not preceded 

by an evaluation sufficient to detect such contraindications. Although 

potentially compromising quality of care, we found no cases where this 

omission led to complications, and only 21 percent of the evaluations 

that were conducted revealed the presence of even a relative 

contraindication. In 18 percent of these cases (1 percent overall), our 

reviewers believed that the dangers presented by the beneficiary’s 

condition outweighed the potential benefits of chiropractic treatment. 

When chiropractic care extends beyond Lack of medical necessity is directly 

12 treatments in a year, it becomes related to service volume 

increasingly likely that individual 

services are medically unnecessary. As shown in Figure 4 (next page), 

services provided among the first 12 in a course of treatment to a 

particular beneficiary by the same chiropractor were approximately 

50 percent likely to be medically unnecessary. That likelihood increased 

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0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

FINDINGS 

to approximately 67 percent for services between the 13th and 24th and 

to 100 percent for services beyond the 24th. In addition, these medically 

unnecessary services are more likely to be maintenance in nature at 

higher service volumes. 

FIGURE 4 1 

Higher-volume services 

are more likely to be 

Proportion medically

unnecessary

0.75 

medically unnecessary, 

particularly 

maintenance. 0.5 

0.25 

0 

1 - 12 13 - 24 25 or higher 

Service number (in course of treatment) 

Maintenance Other medical y unnecessary l

Source: Medical Review of Year 2001 Claims by Practicing Chiropractors 

Given the link between medical necessity and service volume, reviewing 

services that exceed a certain volume threshold could result in 

significant savings. Figure 5 shows the proportion of all services beyond 

specific thresholds that were medically unnecessary and the projected 

savings if carriers had identified and disallowed these services. See 

Appendix A for further explanation of Figures 4 and 5. $78 $64 $52 $48 $47 $43 $43 $35 $31 $29

$26$26 

$59 

85% 

77% 75% 78% 

85% 87% 

90% 90% 

94% 93% 

96% 

100% 100% FIGURE 5 

Lower frequency 

thresholds would 

have resulted in 

greater savings, but 

captured more 

covered care. 

12 13 14 15 16 17 18 19 20 21 22 23 24 

Threshold 

i i i is l i illi ) 

i i i

Projected savngs f frequency edt had been set at th evel ( n m ons

Proporton of servces above threshold that were medcally unnecessary 

Source: Medical Review of Year 2001 Claims by Practicing Chiropractors 

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FINDING S 

Carriers and private plans commonly use frequency edits to limit utilization 

and limit improper payments. 

Medicare carriers and private Federal Employee Health Benefits 

(FEHB) plans often manage chiropractic utilization through frequency 

controls, which are based on the number of adjustments provided. 

These frequency-based controls generally fall into one of two categories: 

soft caps (also called frequency edits) and hard caps. With either type of 

cap, the payer determines the number of services it will routinely allow 

during a specified time period, usually 1 year. The payer tracks the 

number of services each patient receives and generally pays all claims 

up to this frequency threshold without question. Payers that use soft 

caps suspend payment for any services that are billed beyond the 

threshold and request additional documentation from the chiropractor. 

If the documentation demonstrates that continued treatment is 

medically necessary, the claims are paid. Payers that use hard caps do 

not pay for services beyond the established frequency threshold, even if 

they are medically necessary. 

Fourteen of nineteen carriers (74 percent) currently use soft caps as 

their primary means of limiting inappropriate payments, and none use 

hard caps. Individual carriers decide if they want to use the caps and 

also establish their own frequency thresholds. Historically, most 

carriers imposed a frequency threshold of 12 visits on chiropractic 

services. Due, at least in part, to complaints from chiropractors who 

believed the 12-visit limit had become a de facto hard cap, many 

carriers have raised their thresholds or eliminated them altogether. 

Figure 6 shows the frequency thresholds currently employed by carriers 

and the distribution of these controls among the States.13 

Figure 6: Frequency Edits Used by Medicare Carriers 

Frequency 12 or fewer 13 to 24 More than 24 No frequency 

threshold services services services edit 

Number of carriers 

using threshold 3 8 6 6 

Number of States 

with threshold 4 18 12 22 

Source: Carrier Interviews Conducted by Office of Evaluation and Inspections Analysts in 2003 

13 Some carriers serve more than one State and use different thresholds in each. 

Similarly, some States are served by multiple carriers, each with its own limit. In such 

instances, the carrier or State is counted once in each category into which one of its edits 

falls. “States” include the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. 

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FINDING S 

In contrast to Medicare carriers, all but one of the FEHB plans that use 

frequency-based controls to limit chiropractic utilization impose hard 

caps. Instead of capping the number of services, some FEHB plans limit 

the total dollar amount they will pay for chiropractic services or the 

duration of care. In addition, many FEHB plans do not offer any 

chiropractic coverage, and others require prior authorization or a 

referral from a medical physician before they will pay for care. Others 

have no controls other than a member co-payment. Figure 7 shows the 

controls used by the 132 FEHB plans listed on the Office of Personnel 

Management’s Web site. 

Figure 7: Controls on Chiropractic Services Used by FEHB Plans 

Type of 

control 

No 

coverage 

Co-pay 

only 

Prior 

auth. or 

referral 

Freq. cap Financial 

cap 

Duration 

cap 

Number 

of plans 20 36 26 36 8 6 

Source: Year 2003 FEHB Brochures Accessed through http://www.opm.gov/insure/03/html/blinks.asp 

Carriers support a national policy on frequency limits. 

At least six carriers would like CMS to develop and enforce a national 

frequency edit or a hard cap on chiropractic services.14 One carrier 

noted that when the 12-visit thresholds were nearly ubiquitous, 

chiropractors generally accepted them; however, when some carriers 

changed or eliminated their thresholds, other carriers were pressured 

by chiropractors in their jurisdictions to follow suit. 

Although generally opposed to frequency-based controls, the provider 

community has previously accepted the idea of a national frequency cap. 

The American Chiropractic Association expressed support for a national 

cap in an October 21, 1999, letter to the Director of the Office of Clinical 

Standards and Quality at the Health Care Financing Administration 

(currently CMS). Based on the recommendations of a representative 

panel of chiropractors, the letter states that “[a threshold of 18 services] 

reflects the consensus of the chiropractic profession” and is clinically 

relevant.15 

14 We did not ask carrier staff their opinions on a national frequency edit; these six 

volunteered this opinion when asked for their general comments about the Medicare 

chiropractic benefit. 

15 Specifically, the panel supported an “18 + 6” utilization review parameter where a 

threshold of 18 services would be used as a soft cap and 24 as a hard cap. 

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FINDINGS FINDINGS 

All 19 carriers have mechanisms in 

place to prevent and recoup improper 

Carrier controls to prevent overutilization are 

inconsistent 

chiropractic payments. Controls may 

include pre-payment edits that suspend or deny claims based on 

information from the submission, as well as pre- or post-payment 

medical review. Every carrier denies claims from chiropractors for 

noncovered CPT codes and claims for chiropractic CPT codes from nonchiropractors. In addition, every carrier except one uses computer edits 

that suspend or deny claims with improper diagnosis codes. As 

previously discussed, 15 carriers use frequency edits to control 

utilization. Some carriers use chiropractors, medical physicians, or, 

more commonly, nurses to conduct medical review before they pay 

claims that have been flagged through frequency edits. Other carriers 

conduct a non-medical claims audit of flagged claims. A number of 

carriers indicated they automatically deny claims that exceed their 

frequency threshold unless the claim meets certain criteria, such as 

having a particular diagnosis code. 

Carriers vary widely in the resources they devote to monitoring 

chiropractic utilization. For example, the number of pre-payment 

claims reviews conducted by carriers averaged from zero at some 

carriers to approximately 85,000 per year at one large carrier. Some of 

the less active carriers depend entirely on diagnosis-based edits to 

identify improper claims, meaning that as long as a claim is submitted 

with a covered diagnosis code, it will be paid. The use of post-payment 

reviews is equally inconsistent. Although most carriers indicated they 

might conduct post-payment reviews of chiropractic services, only three 

provided evidence that any were conducted recently, and one of those 

had done only two. One large carrier noted that post-payment reviews 

are now the province of the Program Safeguard Contractors. The 

variation observed among the carriers may be due, in part, to different 

philosophies regarding controlling chiropractic claims. For example, 

some carriers believe that oversight of chiropractic services is not a 

priority for CMS, given limited budgets and the relatively small amount 

of money associated with chiropractic services. 

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∆ R E C O M M E N D A T I O N S 


Based on the volume of noncovered, miscoded, and undocumented 

services that were paid, we conclude that chiropractic services represent 

a significant vulnerability for the Medicare program. As more 

beneficiaries avail themselves of chiropractic care, the amount of money 

lost to medically unnecessary, non-manipulation, and undocumented 

services is likely to increase unless appropriate controls are instituted. 

Therefore, we recommend that CMS: 

Ensure that chiropractic services comply with Medicare coverage criteria. 

Given the strong correlation between the number of services a 

beneficiary receives and the likelihood a service is not medically 

necessary, CMS should implement a national frequency edit to target 

high-volume services—which are especially likely to be medically 

unnecessary—for medical review. Carriers or Program Safeguard 

Contractors should then obtain and review the records of beneficiaries 

targeted by the frequency edit in order to identify and collect 

overpayments. 

Many services that would not exceed even a very low frequency 

threshold were medically unnecessary, undocumented, not spinal 

manipulation, or miscoded. Therefore, in addition to whatever 

frequency control is chosen, CMS should require that its carriers or 

Program Safeguard Contractors conduct routine service-specific reviews 

of chiropractic services. When conducting reviews of individual 

providers, it is imperative that reviewers collect the entire records 

associated with services selected as part of a service-specific review. 

Several records we reviewed would have appeared legitimate for any 

one particular day of service; however, that day’s documentation was 

repeated verbatim for the entirety of the patient’s treatment. 

Require that carriers educate chiropractors on Medicare Carriers Manual 

requirements for supporting documentation. 

Many chiropractors seem unaware of the specific documentation 

requirements outlined in section 2251.2 of the Manual. CMS should 

address this lack of knowledge by directing its carriers to issue provider 

bulletins reminding chiropractors of their responsibilities. Due to the 

relationship we found between the lack of treatment plans and 

medically unnecessary services, the bulletins should especially 

emphasize this requirement. 

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RECOMMENDATIONS RECOMMENDATIONS 

In addition to these recommendations, we have forwarded information 

on the noncovered, miscoded, and undocumented services identified in 

our sample to CMS for appropriate action. As mentioned in the 

methodology, the results of our review of the 400 sampled services were 

not shared with the Medicare carriers who paid the chiropractors for 

these services. 

AGENCY COMMENTS 

In its comments on our draft report, CMS agreed with our findings and 

recommendations. The agency has clarified its chiropractic coverage 

criteria and indicated that most carriers are taking steps to reduce 

chiropractic error rates, including targeted educational efforts and 

service-specific medical reviews. In addition, as of October 1, 2004, 

CMS has required that chiropractors use the –AT modifier to indicate 

that a service is not maintenance. Only claims to which this modifier is 

attached are payable. The full text of CMS’s comments begins on 

page 19. 

OIG RESPONSE 

We appreciate CMS’s response to our report, and support the steps the 

agency is currently undertaking to help prevent paying for noncovered, 

miscoded, and undocumented services. 

CMS noted in its comments that while this OIG study projected that 

67 percent of the chiropractic services allowed by Medicare did not meet 

program requirements, CMS’s Comprehensive Error Rate Testing 

(CERT) program identified a claims paid error rate of approximately 

16 percent for claims submitted by chiropractors in 2002. CMS further 

noted that differences in the methodological approaches accounted for 

the significantly different rates. In particular, CMS recognized that 

OIG’s review of a beneficiary’s claims during their entire course of 

treatment enabled us to determine that approximately 40 percent of all 

chiropractic services are attributable to maintenance care, and thus are 

not covered under Medicare. In contrast, the CERT paid claims error 

rate is based on a review of a single claim, which limits its ability to 

detect uncovered maintenance costs.

 We agree with CMS and would like to emphasize that the purpose of 

this inspection was to determine the underlying causes of, and potential 

ways to reduce, vulnerabilities associated with payments for 

chiropractic services. It was not designed to reproduce, or to review, the 

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RECOMMENDATIONS 

CERT paid claims error rate. In addition to the different 

methodological approaches that are noted above, the CERT used 2002 

data, whereas our data was drawn from 2001. Hence, our results 

cannot be compared directly to the CERT program results. 

Furthermore, chiropractic payment errors, while a significant 

vulnerability, contribute only minimally to the overall CERT national 

paid claims error rate. Medicare allowed approximately $191 billion for 

Medicare fee-for-service claims in 2001. Chiropractic services accounted 

for $500 million, or 0.26 percent of this amount. Therefore, the 

chiropractic-specific error rate has little influence on the overall CERT 

error rate for fee-for-service claims. 

Given that Medicare payments for chiropractic services have continued 

to increase since 2001, the need for a more effective way to eliminate 

inappropriate maintenance payments is crucial. However, we recognize 

that it may be impractical for the CERT program to expend its limited 

resources to collect the extent of documentation used in our review. 

Therefore, in the future, CMS may wish to conduct additional studies 

outside the scope of the CERT program to determine cost-efficient ways 

to address chiropractic payment errors. 

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∆ AGENCY COMMENTS 

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AGENCY COMMENTS

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∆ APPENDIX ~ A 

Detailed Methodology 

We defined our universe for the review as allowed services provided in 

2001 by chiropractors (specialty code 35). Due to an internal processing 

error that was only discovered during the analysis phase, our actual 

universe was limited to 91 percent of such services.16 From this 

universe of 14,497,406 services (with a total allowed amount of 

$457,444,574.32), we selected a simple random sample of 400. 

Next, we matched the Unique Physician Identification Number (UPIN) 

and carrier-assigned provider identification number of the chiropractor 

who submitted the claim to the national UPIN registry in order to 

obtain the chiropractor’s name and mailing address. A significant 

number of claims failed this match. We first attempted a manual 

Internet search for these unmatched UPINs; if unsuccessful, we 

telephoned carrier staff in order to obtain a valid name and address. 

After obtaining mailing addresses, we sent letters to each chiropractor, 

requesting medical and billing records for each beneficiary associated 

with that doctor. The letter requested that the chiropractor include all 

records for the beneficiary, not just those for services rendered in 2001. 

A significant number of these initial letters were returned as 

undeliverable. We used Internet searches or called carriers to obtain 

correct addresses. Ultimately, we were unable to contact two 

chiropractors, representing one sample service each; we removed these 

two from consideration. 

If we did not receive a response within approximately 5 weeks, we sent 

a second letter to the initial address. The second mailing also revealed 

a significant number of incorrect addresses, which we resolved in the 

manner described above. If we received no response after the second 

mailing, we obtained phone and/or fax numbers from the Internet or the 

carriers and telephoned or faxed the nonrespondents. Although we 

managed to contact every chiropractor except the two mentioned above, 

three did not provide records, and one sent records after the study 

period had been closed for more than a month. 

 OEI-09-02-00530 

16 The original data was contained in five compressed files. We decompressed these files 

and merged them into a single population data set. However, one of the smaller files failed 

to read into our population data set correctly, and therefore, contributed far fewer claims 

than expected to the population. Most of the omitted claims were for beneficiaries with 

Medicare numbers associated with the Railroad Retirement Board or the State of 

Massachusetts. 

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APPENDIX ~ A 

We organized each record and placed it into a folder to which the 

beneficiary’s 2001 claims history was appended. We sent these folders 

to our medical review contractor, who forwarded them to chiropractic 

consultants for review. Each consultant/reviewer is a currently 

practicing chiropractor with experience in reviewing Medicare claims. 

We had previously developed a review instrument based on Medicare 

coverage criteria with the assistance of the medical review contractor. 

Before beginning the review, we met with the chiropractors to finalize 

the review protocol and to orient the reviewers to its use. The review 

instrument solicited information about the beneficiary’s chiropractic 

treatment as a whole and about the individual sampled service in 

particular; the majority of the findings are based on the individual 

service questions. 

After reviewing the records, the chiropractors returned the completed 

instruments to the contractor for quality control, who then forwarded 

them to us for entry into a data set. All analysis of the medical reviews, 

which included merging our data with census and other outside sources 

of information, was conducted using the statistical software packages 

SAS and SUDAAN. 

Note on factors associated with medical necessity. We tested medical 

necessity as the response variable in a logistic regression with the 

following factors: the number of previous services allowed for the 

chiropractor-beneficiary combination in 2001, the absence of a 

treatment plan with stated goals, the presence of CPT code 98941 on the 

claim, the service being in the first month of treatment, and the 

urban/rural characteristics of the county where the service was billed. 

The number of prior services, the presence of CPT code 98941, and 

being in the first month of treatment were significant at the 95 percent 

confidence level. 

Note on Figures 4 and 5. To obtain the estimates for the proportions of 

chiropractic services that were not medically necessary for Figures 

4 and 5, we first determined the position of the sample service in the 

beneficiary’s series of treatments. That is, we determined, for each 

claim, the number of services that had been previously allowed for that 

chiropractor-beneficiary combination in 2001. For Figure 4, we then 

grouped the sample services into the categories shown in Figure 4 

(1 to 12 services, 13 to 24 services, 25 or more services) depending on 

the number of prior services allowed and determined the proportion of 

services in each category that were medically unnecessary. For Figure 

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APPENDIX ~ A 

5, on the other hand, we determined the proportion of all services 

exceeding each threshold analyzed that were medically unnecessary. 

Hence, the numerator (medically unnecessary services) for each 

estimate in Figure 5 includes all services from the “25 or more” group 

from Figure 4, since the highest threshold analyzed was 24 services. 

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∆ APPENDIX ~ B 


Further Discussion of the Effects of Removing the X-ray 

Requirement 

National Claims History data strongly suggest that removing the X-ray 

requirement spurred an increase in the number of beneficiaries 

receiving chiropractic care. As shown in Figure A-1, the proportion of 

Medicare beneficiaries using chiropractic services grew fairly steadily 

from 4.6 percent in 1994 to 4.8 percent in 1999, at a rate that 

approximately mirrored that in Americans less than 65 years old.17 In 

2000, the Medicare proportion jumped to 5.5 percent, roughly 2.5 times 

the combined increase from the previous 5 years, with no evidence that 

this change was reflected in the under-65 population. Medicare did not 

issue any policy changes other than removal of the X-ray requirement, 

or experience any shifts in its population (such as changes in the 

proportion of beneficiaries in rural areas) that would account for this 

increase. 

FIGURE A-1 

Medicare chiropractic utilization grew 

more rapidly after 1999 compared to the 

general population. 

0% 

1% 

2% 

3% 

4% 

5% 

6% 

7% 

Percent using chiropractic 

1994 1995 1996 1997 1998 1999 2000 2001 2002 

Medicare beneficiaries 

Under-65 population (with standard errors) 

Medicare trend (as established 1994 - 1999) 

Source: National Claims History Part B 1 Percent Files, 1994 to 2002 and 

Agency for Healthcare Research and Quality Medical Expenditure Panel 

Survey, 1996 to 2001 

17 The under-65 population data from the Medical Expenditure Panel Survey is only 

available for the years displayed. 

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APPENDIX ~ B 

We used a commercial time series program called ITSM 2000 to develop 

an auto-regressive moving average model of the proportion of 

beneficiaries who received chiropractic services in each month from 

January 1994 to December 1999. Using this model, we forecast this 

proportion and produced the upper bound of a 90 percent confidence 

interval for each month from January 2000 to December 2002. As 

shown in Figure A-2, the actual proportion of beneficiaries who received 

chiropractic services surpasses the 90 percent confidence upper bound of 

our projection in nearly every month since the removal of the X-ray 

requirement. 

FIGURE A-2 

Elimination of the X-ray requirement coincides 

with greater-than-expected growth in the 

proportion of beneficiaries who receive 

chiropractic services. 

0.02 

0.025 

0.03 

0.035 

0.04 

Proportion 

Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 

Actual Predicted 90% Conf dence Upper Bound i

Source: National Claims History Part B 1 Percent Files, 1994 to 2002 

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APPENDIX ~ B 

As shown in Figure A-3, the number of “new” chiropractic beneficiaries 

(those who had never previously received a chiropractic service in 

Medicare), increased dramatically after the removal of the X-ray 

requirement, from approximately 441,000 beneficiaries in 1999 to 

565,000 beneficiaries in 2000.18 One possible explanation stems from 

Medicare’s inability to pay for diagnostic tests ordered or performed by 

a chiropractor. Although a radiologist or medical physician may order 

and be reimbursed for tests on a patient referred by a chiropractor, the 

cost for X-rays may be assumed by the chiropractor or passed on to the 

beneficiary in many cases. Prior to January 2000, many chiropractors 

and beneficiaries may have been unwilling to shoulder the cost for 

X-rays, and hence the requirement may have served as a cost barrier to 

covered chiropractic care. 

FIGURE A-3 

The number of “new” chiropractic 

beneficiaries increased dramatically after 

removal of the X-ray requirement. "New" Chiropractic Beneficiaries (in thousands) 

700 

600 

500 

400 

300 

200 

100 

0 

1996 1997 1998 1999 2000 2001 2002 

Source: National Claims History Part B 1 Percent Files, 1994 to 2002 

18 We used the 1 percent National Claims History files from 1994 to 2002 to formulate 

the numbers of “new” beneficiaries. Therefore, it is possible that some of the “new” 

chiropractic beneficiaries in each year shown had actually received chiropractic services 

sometime prior to 1994. 

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∆ APPENDIX ~ D 

Significance Tests for Selected Comparisons 

-2.45 

-17.87 pairwise t-tests 

i

-5.17 

chi-square test 

24.91 

Comparison Test Result P-value 

12 or fewer services versus 13 to 24 services 0.0146 

12 or fewer services versus more than 

24 services 

0.0000 

Medically unnecessary services by number of 

services, 

(Bonferron threshold = 0.016667) 

13 to 24 services versus more than 

24 services 

0.0000 

Medically unnecessary services by presence of a treatment plan with specific goals, 0.0000 

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∆ ACKNOWLEDGMENTS 


This report was prepared under the direction of Paul Gottlober, 

Regional Inspector General for Evaluation and Inspections in 

the San Francisco regional office, and Deborah Harvey, Assistant 

Regional Inspector General. Other principal Office of Evaluation and 

Inspections staff that contributed include: 

Scott Hutchison, Team Leader 

Michael Henry, Program Analyst 

Cindy Lemesh, Program Analyst 

Cheryl Dotts, Program Assistant 

Stephanie London, Program Specialist 

Tricia Davis, Director, Medicare and Medicaid Branch 

Technical Assistance 

Rob Gibbons, Program Analyst 

Scott Horning, Program Analyst 

Linda Moscoe, Program Analyst 

Barbara Tedesco, Mathematical Statistician 

We would like to thank our medical review contractor and the 

individual chiropractors who performed the review, as well as the 

carrier staff who participated in our interviews and assisted us in 

obtaining contact information for the chiropractors whose services were 

selected for review. 

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