DATE: Jan 13, 1999 

FROM: June Gibbs Brown 

Inspector General 

SUBJECT: Chiropractic Services Covered by Medicare Managed Care Organizations (OEI04-97-00494) 

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 HCFA’s Part B Extract and Summary 

System data base and a 1 percent sample of HCFA’s National Claims History File. Additionally, 

we identified the number of Medicare beneficiaries enrolled in FFS programs from HCFA’s 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 

chiropractic services 

3,181 1,424,700 4,378 1,391,600 

% of beneficiaries receiving 

chiropractic services 

1.23% 4.16% 1.55% 4.15% 

Number of treatments 

received 

30,605 12,345,001 50,981 12,269,909 

Number of treatments per 

beneficiary 

9.62 8.67 11.64 8.82 
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. 
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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. 

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