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Health Care Blog

Chiropractic Service Overpayment for Lack of Medical Necessity

Authored by John H. Fisher, II
Posted on February 27, 2017
Filed under Health Care

Recent OIG Release Emphasizes Need for Compliance Policies Specific to Provider Risks

The Office of Inspector General recently published results of its audit of Medicare claims for chiropractic services made by a chiropractic group in Kansas.  The review concluded the groups received over $725,000.00 in overpayments in calendar years 2011 and 2012.

In its report, the OIG made a comment that should resonate with providers of all types:

These overpayments occurred because [the provider] did not have adequate policies and procedures to ensure that the medical necessity of chiropractic services billed to Medicare was adequately documented in the medical records.

The OIG recommended the provider refund $369,335.00 to the Federal Government.  The provider objected to the OIG’s recommendation to refund the overpayment that was identified by the OIG.  The provider argued the services billed were all medically necessary and were adequately documented as such.  The OIG issued detailed findings which upheld its initial recommendations, including the recommendation the provider repay amounts identified as overpayments.

The OIG’s findings detail the documentation requirements applicable to substantiate the medical necessity to support billing for manual manipulation of the spine.  This analysis provides a useful review that can be integrated into chiropractic billing policies.

The OIG stresses the absence of adequate policies and procedures describing the required medical record documentation to support billing the Medicare program for manual manipulation of the spine.  It is worthy of note that the OIG stresses the need for policies to address specific billing issues relevant to the provider’s practice and operations.  General billing policies will not suffice.  Providers should identify the areas of risk that are specific to their practices and detail applicable requirements in policies and in staff training.

Providers should identify areas of billing applicable to the nature of their proposed services.  In the OIG report at issue, chiropractic services were specifically involved.  In my experience, providers generally know what billing issues pertain to their practices and where their most significant compliance risk lies.  Policies specific to these areas should be created based on published CMS billing requirements.  Employees should be trained on these policies.

It is never enough to simply adopt policies.  The policies must be put into active operation to identify and reduce errors and associated fraud and abuse liability.  The policies can form the center of staff and provider training, auditing and monitoring, and corrective action based upon detected deficiencies.  The policy should be periodically reviewed and updated based on changes in legal requirements or billing standards, and detected errors in provider compliance or operation.  These activities are central to the operation of an effective compliance program.  If there are errors in the system, they will be detected before they become more difficult and costly to solve.  If errors somehow “get through” the system, the provider will have a great deal more credibility with the government when attempting to work out a solution.  In most cases, systematic compliance efforts will reduce or eliminate potential exposure for civil monetary penalties and/or False Claims Act liability if the provider is forthright in their disclosure to the Federal Government.

It is also worth noting the OIG did not, and theoretically could not, make a determination as to whether the claimed services were in fact “medically necessary.”  Upon review of a claim, the only available evidence of medical necessity is what the provider documents in the medical record at the point of service.  The OIG could only analyze what was in the medical record and compare that information to the specific documentation requirement laid out in Medicare regulations.

The OIG concluded the “medical review contractor found…that the medical records did not indicate that the services provided a direct therapeutic relationship to…the beneficiary’s symptoms.”  Specifically, the OIG concluded the services did not provide a reasonable expectation of recovery or improvement.  This is specifically required under the applicable provider manual sections (in this case Manual Chapter 15, section 240.1.3).