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Medicare Pilot Shakes Out as $50-Million High Stakes Game for Chiropractors PDF Print E-mail
Written by John Weeks   

Medicare Pilot Shakes Out as Disputed $50-Million High Stakes Game for Chiropractors

Summary: In 2003, the American Chiropractic Association (ACA) took a bet with Medicare that expanded coverage of chiropractic services would be at least cost neutral for the agency. HHS Secretary Sibelius has submitted her final report to Congress on the 2005-2007 demonstration project. Patients rated the pilot highly across the board, but the cost results are conflicting from the 4 separate sites. On the all-important question of cost neutrality, findings range from cost saving to quite costly. Now Medicare is looking to recoup $50-million through a lowering of reimbursement rates for chiropractors. An ACA team including health services expert Christine Goertz, DC, PhD and Susan McClelland has been formed to explore the huge variances between sites, and especially why the Chicago area showed as a costly outlier. The lessons and process here may be of interest to any integrative practice interests who believe all they need is a demonstration project to guarantee rapid adoption into the healthcare payment and delivery system.
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Engages 2005-2007 chiropractic project
Where one sits geographically appears to matter, big time, when it comes to evaluating the critical cost dimensions of the recently reported pilot project "Demonstration of (Expanded) Coverage of Chiropractic Services under Medicare." At least $50-million and the future of chiropractic in Medicare are on the line.

In 2003, the American Chiropractic Association (ACA) took a bet that expanded coverage of chiropractic under Medicare would be, at worst, cost neutral. Via an act of Congress, Medicare engaged a 2005-2007 pilot, to most accounts begrudgingly. A condition was that if the pilot cost the system, Medicare could put chiropractors on the hook to cover the losses via downward adjustment of their fee schedule.

The potential upside for the ACA and the chiropractic profession of this bet was huge. If this 2-year pilot showed patient satisfaction, cost savings or at least cost-neutrality via cost offsets, chiropractors would be loaded for bear in lobbying for expanded coverage nationwide. Because private coverage often follows Medicare's lead, the impact could be fruitful for chiropractors throughout the payment system.

 In these 3 sites,
the chiropractic pilot was

either effectively cost neutral
or actually saved money relative
 to control sites.

A January 14, 2010 report to Congress from US Secretary of Health and Human Services Kathleen Sibelius suggests that chiropractic made a great bet. But this requires one caveat. The outcomes under would have to be limited to 3 of the pilot's 4 sites: 17 counties in central Virginia, and the entire states of New Mexico and Maine. Here, expanded chiropractic coverage was either cost neutral or actually saved Medicare money relative to control sites.

Yet if the pilot is evaluated based on outcomes in the 4th site, the Chicago-area of Northern Illinois, the cost picture gets ugly for chiropractic bet according to the report. Medicare's contractors on the study found significant costs to Medicare in this zone. And because 2/3 of the total dollars involved in the pilot were in the Illinois site, the overall project also ran well into the red.

In short, Medicare is presently in a collections mode. The agency is seeking $50-million from the profession through lowering the chiropractic fee schedule nationwide.
The ACA appears to have made a bad bet.

  Right now, the pilot looks a bad bet
for the chiropractic profession.
Medicare is in a collections mode,
seeking $50-million from chiropractors
through lowering fees nationwide.

The ACA is questioning the findings and protesting the fee adjustment. They view the Chicago data as an "outlier" when compared to the rest of the data and believe that this "raises significant questions." In a release, the professional association states that "further research into the reasons why the results in Chicago differ from the rest of the demonstration project sites is needed to better understand these findings."

The ACA has appointed a 6-person team to examine the study's methodology.
Health services research specialist Christine Goertz, DC, PhD, part of the ACA team and an Integrator adviser, told the Integrator that from initial analysis, she believes that there may be a number of reasons for the surprising results in Chicago.

In many integrative practice fields, from integrative medicine doctors to acupuncturists, naturopathic physicians and directors of integrative centers, the idea of a major Medicare pilot project has been suggested by those seeking greater access to their services. Here is a closer look at the pilot and the current controversy surrounding the findings. 


Typical chiropractic inclusion and the pilot's expanded coverage

Chiropractic, as "manual manipulation of the spine to correct a subluxation," is a covered service for those Medicare beneficiaries covered under Part B Medicare beneficiaries and has been since 1972. (Interestingly, some Part C HMOs provide this service only through medical doctors and osteopaths, rather than through chiropractors.) In addition, treatment is limited to almost any neuromusculoskeletal (NMS) complaint related to the spine. No evaluation and management (E&M) time is compensated by Medicare, though it is typically paid by the patient. X-rays and other diagnostic imaging and laboratory analysis ordered by chiropractors are not covered.

The resulting care creates challenges for both patients and practitioners. Patients must rely on additional insurance or pay out of pocket for clinical services Medicare doesn't cover. Patients are likely to be sent to another facility for diagnostic services that the chiropractor could offer. Practitioners may need to bill multiple carriers. Care is system-centered care rather than patient-centered.

The expanded chiropractic coverage under the pilot addressed these inefficiencies in a variety of ways:

  • Participating chiropractors had their imaging, diagnostic and other tests covered.
  • Coverage was no longer limited to treatment of the spine but also included extremities and other modalities besides manipulation. 

The analysis of the pilot explored the impacts on the patient as well as cost impacts to the system relative to total neuromusculoskeletal (NMS) costs. NMS-related costs in each pilot area were compared to those in a matched site with customary chiropractic coverage. One angle of inquiry into the unusual array of outcomes is to examine the sites selected as a match.

Chiropractic association take key roles
ACA press release focuses on high patient-satisfaction

The January 26, 2010 press release from the ACA that followed Sibelius' report was headlined "Patients in Medicare Demonstration Project Give Chiropractors High Marks." The second paragraph reads:
"When asked to rate their satisfaction on a 10-point scale, 87 percent of patients in the study gave their doctor of chiropractic a level of 8 or higher. What’s more, 56 percent of those patients rated their chiropractor with a perfect 10."
The cover letter to Congress from Sibelius noted that "surveyed beneficiaries in the demonstration areas reported positive reactions to their chiropractic care." The report, from a team at the Brandeis University Schneider Institutes for Health Policy led by William Stason, MD, MS Sci, offers additional detail.  For 2/3 of these patients, the symptoms that brought they in were 'severe" or "very severe." Some 60% said they had "complete" or "a lot" of relief. Over 90% said their chiropractors spent adequate time with them, said the chiropractors listened to them, and have positive experience relative to scheduling. Interestingly, most had no idea that they were part of a pilot.

Notably, however, and despite the ACA's positioning and the value to patients, the Brandeis team's list of the "main policy questions addressed by the demonstration" did not include patient satisfaction. Rather, these were questions relative to cost.

Framing the pilot's cost questions and outcomes

The demonstration project framed the cost issues around 3 questions.

  • Did expanded coverage increase Medicare expenditures for chiropractic, and if so, by how much?
  • Were increases in expenditures from chiropractic services offset by reductions in the costs of non-chiropractic ambulatory (Part B) services or institutional care (Part A)?
  • Was expanded coverage for chiropractic services budget neutral for Medicare?

Clearly, cost and not patient experience were the betting points as understood by the Brandeis team. Sibelius cover letter summed up the findings this way:
"Overall, the demonstration led to higher total Medicare reimbursements for services provided for NMS diagnoses indicating that expenditures for expanded chiropractic services were not offset by Part A or Part B savings ... Analysis of the chiropractic users subgroup found an increased effect of the demonstration of $50-million."
The ACA release turned to cost near the bottom, placing the accent on the affirmative: "(The report) indicates that in all but one of the demonstration sites, patients’ health care costs were not significantly changed by expanding coverage of chiropractic services." The ACA would "explore the underlying causes" for why NMS costs were much higher in the Chicago area.

Notably, however, one of the charges given to the ACA team was to explore how these outcomes - both high patient satisfaction and cost neutrality or better were found in 75% of the sites - could be used to expand coverage of chiropractic services under Medicare. Meantime, a separate ACA team would fight the proposed Medicare action to lower rates on chiropractic to re-coup the $50-million.

Christine Goertz, DC, PhD: Health services research expert is part of ACA team
What happened in Chicago #1: What were the match sites and were they fair?

ACA team has not yet had an opportunity to examine details of the research methods that were not included in the Brandeis Report. Key methodological questions that could influence the outcomes are impossible yet to gauge. Integrator interviews with a half-dozen individuals, most of whom preferred not to have their comments for attribution, indicated an array of questions.

Goertz, a former program officer for health services research at the NIH National Center for Complementary and Alternative Medicine and vice chancellor for research and health policy at Palmer College, believes that "the Chicago findings raise questions because they are not consistent with the data from the other demonstration sites." 

A number of individuals interviewed stated simply that we need more information before being able to conclude that these data are "real findings" that can be generalizable.
ACA team member Susan McClelland notes that scopes of practice, which can differ significantly from state-to-state for chiropractors, and practice patterns in comparison states also need to be examined "to see if areas are a good match."

Susan McClelland: Medicare expert is part of ACA's team
What happened in Chicago #2: The training issue

McClelland is viewed by Goertz as "the most knowledgeable person in the chiropractic field on Medicare." She has worked on Medicare issues for 25 years. She sits on 3 ACA standing committees and is typically one of the individuals sent to Medicare/Centers for Medicare and Medicaid (CMS) as an emissary by the ACA if ever a problem arises.

The ACA contracted with McClelland to provide education of practitioners in the various demonstration sites around the complicated Medicare billing processes relative to the new services. She did so in all but the Illinois site. There, the state chiropractic association association had its own consultant they preferred to use.

Jim Winterstein, DC, president of Lombard, Illinois-based National University of Health Sciences (NUHS) apparently thought McClelland's services could be useful. He brought her in for a program sponsored by NUHS. McClelland estimates that there were roughly 50 attendants.

In the search for understanding why the northern Illinois appears to be an outlier, the issue of disparate training came up.  

What happened in Chicago #3: "Gold rush mentality ..."

Ultimately, as one more than one individual interviewed wondered, one question is whether the expansion of coverage created "a kind of gold rush mentality" among the Illinois chiropractors. Maybe, as another said, the Illinois chiropractors "went hog wild."

I shared with a couple of those interviewed an experience in Washington State in 1994-1995 when the Blue Cross plan initiated a time-limited pilot called "AlternaPath." That initial coverage
of a set of acupuncturists and naturopathic doctors allowed up to $1000 per patient. Some practitioners clearly maximized their gain.

One person interviewed suggesting that neither the state nor national associations adequately controlled and prepared the practitioners for this pilot "in which the spotlight was on and they had a real chance to show what they could do." Instead,
by the 2005-2007 time of the pilot, chiropractors "were already getting squeezed" due to changes in schedules from from various payers. They had "already begun to see some hits to their incomes." With the Medicare pilot, "the flood-gates opened." The interviewee clarifies that he hopes the analysis will find a valid justification. He fears the doctors were "feeding at the trough."

McClelland notes that she thought that if anything providers would make less money, if the number of modalities and services provided didn't change.
Instead of getting rich, the chiropractors would experience cost-shifting, and in many cases the shift would be from a higher cash payment or 3rd party reimbursement to a lower Medicare schedule.

However, if a provider typically treated a Medicare patient with chiropractic manipulative treatment (CMT) and occasionally one modality but then, during the demonstration project, provided CMT, 3 modalities, and rehab on every visit, their income under the demonstration project would be higher. In this scenario, income to chiropractors could increase, even with the lower Medicare fees. 

The Brandeis report offers some support for McClelland's view. The report states that participating "chiropractors indicate that ... the pilot had little or no effects on practice volumes, patterns of services provided, or net practice incomes." This is not a portrait of milking the demonstration.

What happened #4: Medicare doesn't like chiropractic

The legislation that mandated the pilot did not flow from curiosity inside of Medicare. Rather, according to the Brandeis team, the ACA "advocated for expanded coverage ... asserted that expanded coverage would reduce out of pocket costs to beneficiaries, attract additional patients to chiropractors, and, potentially, could reduce the total costs of care for Medicare beneficiaries by reducing the costs of pain medications and other medical and surgical treatments for these conditions."

The argument is that Congress forced the Centers for Medicare and Medicaid services to undertake the study, and that Medicare did it begrudgingly. Such a negative context is not likely to produce a research methodology that is mostly likely to frame questions for a cost-neutral or better outcome.

The report notes that Medicare did not seek to drive patients into the pilot or inform beneficiaries of the pilot.
The pilot was slow to get up and running.

Those looking for evidence for why Medicare may not like chiropractors don't have to look far. In May 2009, the Office of the Inspector General published a report entitled Inappropriate Medicare Payments for Chiropractic Services. The OIG found that what it believes are $178-million in over-billing by chiropractors under Medicare, typically for "maintenance care" which Medicare does not cover. That report was also contested by the ACA. In fact, in a June 9, 2009 response from a three person ACA team that included Goertz and McClelland, the issue of methodology was once again among the significant issues raised. They concliude that "it is probable that the methods used resulted in an overestimate of inappropriate claims paid."

One interviewee who preferred anonymity due to ongoing Medicare relationships, and without reference to whether the judgment was just, stated simply: "Medicare hates chiropractors."

Still, this doesn't explain why the Chicago experience was at such variance with the rest. Yet negative results are certainly more likely to arise from hostile environments.

Jim Winterstein, DC: NUHS president offers perspective
A perspective from president of Lombard, Illinois-based NUHS, Jim Winterstein, DC

Jim Winterstein, DC, as noted above, was instrumental in ensuring that chiropractors in his home state of Illinois have the opportunity to be trained in Medicare processes by the ACA's McClelland. Winterstein, a sometimes Integrator contributor, is unusual among chiropractic educators in the long interest and involvement he has had in methods for integrating chiropractic services into the payment and delivery system. He has served on the board of Alternative Medicine Integration (AMI) Group, the firm which has mounted the widely-reported pilot with chiropractors as primary care providers in a Blue Cross HMO. Asked for his perspective, Winterstein replied in an e-mail message:
"As we all know, our experience with AMI shows marked DECREASE in costs. I think this Medicare demonstration project is a different animal altogether. I don’t know the percentage of chiropractic physicians and patients as compared to other parts of the country. I don’t know if DCs in other parts of the country were encouraged to control costs. I don’t know which diagnostic and therapeutic procedures were allowed by the demonstration project, so the reality is that at the present time, without further information I cannot explain the cost differential. Hopefully the subsequent study being undertaken by the ACA will shed some light on the question."
Conclusion and Comments

Winterstein is not alone in his curiosity about any additional light that the ACA's team might cast from further review of the methods. Interviews for this article suggest that what light may be shed will not likely be shed soon.

Goertz provides a useful, sober perspective in a September 2009 article published in Dynamic Chiropractic. Referencing
a preliminary release of the Medicare demonstration project data, the OIG study and Medicare's move to reduce fees to chiropractors, she urges members of her profession to acknowledge that "healthcare reform" is already happening to them.

As with any "objective" research, outcomes
are likely to be best when one's friends pose
the questions; worse, if framed by antagonists.

The corollary is that such bias is likely to be
more pronounced the more money is on
the table. Back care is a high stakes game.

Yet while the impact of such reform would seem to be negative, the ACA is operating with a positive spin. An ACA spokesperson notes, for instance, that HHS Secretary Sibelius, in her cover letter when presenting the report to Congress, made no recommendation thumbs up or thumbs down on expanded chiropractic benefits. Despite the overall finding of a failure to achieve cost neutrality, Sibelius did not weigh in negatively.

For the chiropractors, this is an improvement from their previous demonstration project. The Department of Defense argued against expanded chiropractic in a report a decade ago. Yet, ironically, the uptake of chiropractic into the VA and other defense establishments is under way throughout the United States.

We do not know yet whether the bet the ACA made in 2003 will pay off, or will be haunting them in 2010 and beyond.
One may comfortably conclude that, as with any "objective" research, the outcomes are likely to be best when one's friends are posing the questions. Conversely, they're likely to be worse if framed by an antagonist. I would add the corollary that such bias is likely to be more pronounced the more money is on the table. Back care is a high stakes game.

What we do know for sure from the story of this pilot is that the business of proving assertions of system-wide cost savings, from any integrative practice, is likely to require a journey of many unforeseen challenges before data are widely accepted as conclusive, one way or the other.

Meantime, keep a game face, build relationships, and lobby, lobby, lobby.

Note: The ACA maintains a resource page on the project with numerous useful links for those seeking more information.

Send your comments to
for inclusion in a future Integrator.

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