CHAPTER VI
INSURANCE COVERAGE OF CHIROPRACTIC SERVICES Gail A. Jensen, PhD; Robert D. Mootz, DC;
Paul G. Shekelle, MD, PhD; Daniel C. Cherkin, PhD
A. Sources of Reimbursement for Chiropractic Services
Although many patients still pay out-of-pocket for chiropractic services, most now have insurance that pays part of the cost. The two best sources of information about payment for chiropractic services are the annual survey of the members of the American Chiropractic Association (who comprise roughly 25 percent of all the licensed chiropractors in the U.S.)4 and a recent study of chiropractic utilization in five geographic areas of the U.S. (Goertz, 1996; Hurwitz, in press). The 1995 ACA data describe the percentage of total revenues chiropractors received from specific sources. The Hurwitz study reports the percentages of chiropractic patients with specific types of insurance coverage around 1990.
Despite differences in the nature and dates of the two studies, their results are similar (Table 13). The predominant sources of payment are private insurance and direct payments from the patient, together accounting for about 60 percent of gross practice revenue. Worker's Compensation and automobile insurance account for about 10 percent-15 percent each, and Medicare represents an additional 8 percent. Medicaid, prepaid or managed care, and all other forms of payment contribute relatively little, accounting in aggregate for about 10 percent of payments. However, because the market share of managed care coverage is increasing rapidly in many areas, these percentages seem likely to change (Coile, 1995).
B. State Mandates for Chiropractic Benefits
State-mandated benefits are State laws, which prescribe the terms of coverage for group health plans purchased from Blue-Cross Blue-Shield (BCBS) and commercial insurers. Mandates for chiropractic benefits are common. As of 1994, 45 States had them; only Hawaii, Idaho, Oregon, Vermont, and Wyoming did not (Health Benefits Letter, 1994).
Delaware enacted the very first mandate for chiropractic benefits in 1963. Legislative activity was minimal for the remainder of the decade, with only Nebraska (1967) and New Hampshire (1969) enacting such mandates. During the 1970s, 17 additional States enacted mandate laws. Another 24 States passed mandates during the 1980s, and the most recent State to act passed its chiropractic mandate in 1990 (Health Benefits Letter, 1994).
Table 13. Payment for Chiropractic Services, by Source
Payment Source ACA Survey1 (% of income)
RAND Study2 (% of patients)
Direct payments from patients (cash) 27.7 20.9
Private Insurance (Indemnity) 28.6 41.8
Auto Insurance 14.5 9.8
Worker’s Compensation 10.8 10.4
Medicare 8.4 7.3
Prepaid/Managed Care 8.6 3.7
Medicaid 1.2 1.5
Other 0.9 2.3
1 Source: Goertz C. Summary of 1995 ACA annual statistical survey on chiropractic practice. J Amer Chiropr Assoc 1996;33(6):35-41.There are two types of mandated benefits for chiropractic. The first, in effect in 44 States, consists of a minimum coverage standard for all group policies sold in a State. These laws, called "mandatory inclusion" mandates, require that group policies sold contain certain provisions specified by the State. For example, some mandates require that policies cover a specified number of chiropractic visits per year or that services performed by a chiropractor that are covered by other providers must also be covered when performed by chiropractors. The second type of mandate requires insurers to offer specified chiropractic coverage for sale; the decision of whether to buy it, however, is left to the purchaser. This type of law, present only in the State of Washington, is called an "available-for-sale" mandate (Health Benefits Letter, 1994).
2 Source: Hurwitz EL, Coulter ID, Adams AH, Genovese BJ, Shekelle PG. Utilization of chiropractic services in the United States and Canada: 1985-1991. Am J Publ Hlth (In press).
The extent to which State-mandated benefits have influenced private health insurance for chiropractic care is unclear. Mandates typically apply only to conventional fee-for-service (FFS) group policies sold by health insurers. Most States exempt health maintenance organizations (HMOs) from compliance, and some also exempt preferred provider organizations (PPOs) (Mandated Benefits Manual, 1992). Group insurance plans that are "self-insured" are also unaffected, because the 1974 Employee Retirement and Income Security Act (ERISA) preempts States from regulating these plans (Jensen, 1993). Thus, it is only one segment of the market, non-self-insured fee-for-service plans, also referred to as "purchased conventional plans," that are typically affected by the laws.
At the time most States enacted mandates for chiropractic coverage, between 1975 and 1985, the majority of workers with employer-sponsored coverage should have been affected because most belonged to a purchased conventional plan. Although managed care and self-insured plans existed during that period, it was not until the late 1980s that they had a significant presence in the market (Jensen, 1987; Gabel, 1989). Today's group insurance market, however, is dominated by managed care and self-insurance. The consequence is that only a small segment of current coverage is actually subject to State chiropractic mandates. In 1995, for example, only 13 percent of all workers in employer-sponsored plans belonged to a non-self-insured conventional plan subject to State mandates (Jensen, 1997). The rest were either in managed care (73 percent) or conventional self-insured plans (14 percent). Thus, the vast majority of persons covered by employer-sponsored plans are now exempt from these laws.
Nevertheless, even though most plans are no longer required to cover chiropractic, Jensen (in press) found that, with the exception of health maintenance organizations, most employer plans still include chiropractic benefits. Even self-insured plans provide these benefits. Overall, 75 percent of workers receive chiropractic coverage under their plan. The fact that chiropractic coverage is still widespread suggests that by having made such coverage "standard" years ago, mandates may have brought chiropractic into the mainstream of today’s benefits.
C. Employer-Sponsored Insurance Benefits
Employer-sponsored health benefits, the source of health insurance for almost 70 million workers and their families, are a major source of insurance for chiropractic services. Much of what we know about these benefits comes from a recent study by Jensen, et al. (In press). This study drew on data from two sources: a 1993 survey of 1,953 private and public employers nationwide and a 1995 survey of 127 firms included in the former survey that indicated that their plan(s) covered chiropractic. In the second survey, benefit booklets for the health plans were obtained.
1. The Prevalence of Chiropractic Insurance Benefits
Table 14 reports the prevalence of coverage for chiropractic services among workers with employer-sponsored health benefits. Three out of four workers with direct employer coverage had coverage for chiropractic under their plan. Nineteen percent had a health plan that excluded coverage for chiropractic, and for the remaining 6 percent, coverage status was unclear.
Table 14. Percentage of Insured Workers with Benefits for Chiropractic Care Among All Workers with Health Insurance Through Their Employer, 1993
Source: Jensen G, et al., citing the 1993 KPMG Peat Marwick/Wayne State University Survey of 1,953 Employers.
Millions of Workers
Workers with Chiropractic Benefits
Workers without Chiropractic Benefits
Coverage Status Uncertain
Total 68.8 75%
19%
6%
Among Workers in: Conventional Plans
33.7 84
11
6
HMOs
15.1 44
45
10
PPO
13.8 83
13
5
Point-of-Service Plans
6.2 81
13
6
Chiropractic coverage varied notably by the type of policy. Enrollees in conventional, PPO, or point-of-service plans were almost twice as likely as HMO enrollees to have benefits for chiropractic (81-84 percent vs. 44 percent, respectively). The 44 percent of HMOs with chiropractic benefits reported in this study is consistent with the 46 percent reported by the Group Health Association of America (GHAA, 1994). It should be noted that these benefits are not among those required for an HMO to be "federally qualified" under the 1973 Health Maintenance Organization Act.
Jensen (in press) also examined whether the workers in conventional non-self-insured plans, i.e., those clearly subject to State mandates, in fact had chiropractic benefits when their State laws required it.5 In 1993, such plans covered 13.5 million workers in the United States, or 19 percent of all employees who received health insurance from their employer (Gabel, 1994). Looking only at States that had a mandate for chiropractic, they found that 77 percent of enrollees in non-self-insured conventional plans had coverage. Seventeen percent of enrollees in these plans lacked chiropractic coverage, and for 6 percent of enrollees, coverage status was unknown. Thus, the rate of noncompliance with State mandates for chiropractic was between 17 and 23 percent in 1993.
Although self-insured plans were exempt, most chose to cover chiropractic. Among workers in self-insured conventional plans in these same States, 88 percent had chiropractic coverage within their benefit package, 8 percent lacked coverage, and for the remaining 4 percent it was unclear. This high rate of chiropractic coverage in plans exempt from mandates was even higher than that for plans that were required by law to have such coverage. Thus, by 1993—the time of their survey—it was clearly not the case that employers systematically avoided coverage for chiropractic when allowed to do so.
2. Benefit Provisions in Plans Covering Chiropractic Care
The Jensen study (Jensen, in press) also provides information from plan benefit booklets describing how employers covered chiropractic services. Table 15 summarizes several aspects of such coverage. When chiropractic was covered, the benefits were usually less generous than those governing physician care. This more restrictive coverage for chiropractic was characteristic of conventional insurance, HMOs, and PPOs. Only a third of the plans treated chiropractic and physicians' visits the same, i.e., the exact same deductible and coinsurance provisions. Conventional plans were most likely to have congruence of this sort, while PPOs were least likely.
About a fifth of plans had chiropractic benefits that were less generous than physician benefits but the same as those governing physical therapy. Typically, when this occurred, the benefits for both were integrated into a set of provisions governing "other health care providers," which might include chiropractors, physical and speech therapists, and possibly some other nonphysician providers. Where benefits for chiropractic visits and physical therapy differed, some plans covered chiropractic more liberally than they did physical therapy, while other plans did the opposite.
Most of the plans covering chiropractic explicitly limited the use of such services, separate from the limits placed on physician care. While plans used a variety of limits, the most common were ceiling-type limits, such as limits on the number of chiropractic visits. About 30 percent of the booklets imposed a specific visit limit (Table 15). Plans varied in terms of the period to which the limit applied. Some applied it per week, others, per year, and still others, per "benefit period." An example of the last would be "no more than 20 visits during the 60 days following the initiation of chiropractic treatment."
Dollar limits on reimbursements for services were another common type of ceiling placed on benefits. These also varied in terms of their period of application. Some plans established a dollar limit per visit, others imposed a dollar limit per year, and as with visit limits, some applied it per benefit period. Further, in some plans these limits were integrated with dollar maximums for other treatments, such as physical therapy. Aside from these ceiling-type limits, some plans stipulated chiropractic-specific deductibles and/or a special coinsurance rate for chiropractic expenses. Finally, some plans specified that chiropractic benefits applied only to spinal manipulation, and not to other services sometimes provided by chiropractors such as x-rays, body massage, heat treatment (e.g., prior to adjustments), or nutritional counseling.
Table 15. Benefit Provisions in Employer-Sponsored Plans That Cover Chiropractic Services, 1995
Percent with Trait Among:
Conventional
HMOs
PPOs
Benefit provisions for chiropractic care are . . . identical to those applying to physician visits.
44%
36%
23%
identical to those applying to physical therapy.
15
36
13
different from both those applying to physician visits and those that apply to physical therapy.
38
14
56
unclear, although booklet asserts that chiropractic is covered.
3
14
8
At least one of the following limits imposed for chiropractic services: 53%
50%
69%
Visits to a chiropractor limite
30
34
27
Special dollar limit applies to chiropractic benefits
29
7
42
Separate deductible applies for chiropractic services
6
35
21
Separate chiropractic coinsurance rate
24
34
13
Coverage only for spinal manipulation
24
7
33
Two or more of above limits imposed for chiropractic services 38
14
64
Prior authorization required for any use of chiropractic 6
88
13
Number of plan booklets examined 45
34
45
*Chiropractic benefits less generous than benefits for medical physician visits.
Source: Jensen G, et al., based on the 1995 Wayne State University Survey of 127 Employer Health Plans with Chiropractic Benefits.
Note: Data for POS plans are not reported due to an insufficient number of booklets (3).
Among all the plans that covered chiropractic, over half had at least one explicit limit placed on their benefits (out of the five possible limits described above), and many imposed a combination of these provisions. For example, one conventional plan allowed a maximum of 40 visits per year, limited reimbursement to $25 per visit, and restricted the covered service to spinal manipulation only. Another plan, a PPO, required 50 percent coinsurance toward chiropractic care, and limited the plan’s total reimbursements to $700 per year. There was a tremendous amount of heterogeneity in terms of "how" plans limited chiropractic benefits.
The nature and number of limits imposed varied by type of plan. PPO plans were most likely to impose multiple limits, and HMOs least likely. HMOs generally limited coverage through separate deductibles or coinsurance rates for chiropractic or by limiting the number of chiropractic visits. Unlike PPOs and conventional plans, HMOs rarely imposed dollar limits or restricted chiropractic coverage to spinal manipulation. The Jensen study also found that conventional or PPO plans rarely required prior authorization for chiropractic services, while in HMOs, prior authorization was almost always required. These requirements are consistent with the policies of most HMOs requiring that services not provided by a patient’s primary care physician be authorized by that physician in order to be covered by the plan. Additional discussion of how managed care has impacted chiropractic can be found in Chapter VII, section C: Accountable Delivery Settings and Chiropractic.
D. Chiropractic in Workers’ Compensation Systems
Most workers' compensation statutes and regulations are based on long-standing compromises between the employer and labor communities. In exchange for providing 100 percent coverage for injuries and illnesses incurred on the job, employers frequently receive liability protection through regulations that provide explicit finite remedies for disabilities and loss of life. In return, employees have frequently been allowed to seek the care and providers they prefer. Some States require an injured worker to seek care from a company-approved physician or clinic, but most delineate specific appeals processes if the worker is dissatisfied or feels care is ineffective.
Chiropractic physicians are explicitly recognized by regulation or statute as "attending providers" (i.e., providers whom workers may access directly and who can oversee management of the case) in the workers' compensation systems of 39 States and the District of Columbia (Eccleston, 1995). One State (Oregon) allows chiropractors to be treating physicians for only the first 30 days, requiring medical referral thereafter. The 10 remaining states (Illinois, Indiana, Maine, Maryland, Minnesota, Missouri, New Hampshire, New Jersey, Pennsylvania, Vermont) do not delineate which provider types can or cannot be attending providers for injured workers. The benefits allowed under each State's workers' compensation system vary considerably and no inventory of detailed chiropractic benefits is readily accessible. Workers' compensation laws tend to be liberally construed in the workers’ favor in most States by statute or administrative rule.
In recent years, there has been an increasing trend to closely manage care in "State-fund" benefits systems and by private sector insurers. A variety of cost-containment strategies, including utilization review, practice guidelines, and reporting requirements that have been used to control medical costs, have also been used to control costs of chiropractors. An increasing number of States are allowing benefits to be delivered entirely through managed care plans at the employer’s discretion (Hughes, 1995). Patient access to chiropractic services in this situation then becomes subject to provider access protocols of each individual HMO, PPO, or other provider network. A more detailed discussion of issues surrounding chiropractic access and participation in managed care settings can be found in Chapter VII.
E. Other Insurance Coverage
1. Personal Injury Protection
Personal injury protection (PIP) insurance is a form of insurance that covers immediate medical needs of the policyholder, freeing them from the burden of recovering costs from any responsible third party. Automobile insurance and some types of homeowners' insurance typically incorporate such PIP coverage. This is the only form of insurance where insurance equality laws in most States serve to permit chiropractors access to reimbursement on par with all other providers. Hence, personal injury care has been an integral part of chiropractic practice representing the third largest source of income (Table 13) for chiropractors nationally (Goertz, 1996).
2. Medicare and Medicaid
The Federal Medicare program, overseen by the Health Care Financing Administration (HCFA) of the United States Department of Health and Human Services, first incorporated a chiropractic benefit in 1972 (Wardwell, 1992). The Medicare chiropractic benefit allows for 12 visits annually and covers only one service, manipulation of the spine by a chiropractor. Further, Medicare policy mandates (but does not reimburse patients for) spinal x-rays to justify the need for chiropractic care, however, by recent congressional mandate, that requirement is scheduled to expire in the year 2000. Because of the economic importance of HCFA's programs, benefits and reimbursement policies set for Medicare coverage can become benchmarks for programs nationwide. As a result, chiropractic trade associations and professional organizations have placed a high priority on influencing Medicare coverage for chiropractic services, even though Medicare payments account for only about 8 percent of chiropractors' income (Goertz, 1996). Congressional lobbying for Medicare reform has been an important and regular focus of political efforts of chiropractic trade associations.
The Medicaid program, also overseen by the Department of Health and Human Services, provides some basic medical coverage, at highly reduced rates, to individuals under the poverty level. Although chiropractic services are allowable in this program, health and human service agencies at the State level regulate specific benefits. Hence, Medicaid coverage for chiropractic services is highly variable from State to State. Data from the American Chiropractic Association's national membership survey indicates that less than 2 percent of chiropractic income is derived from Medicaid reimbursement (Goertz, 1996).
3. Other Federal Programs
There are three other Federal health care programs of interest in terms of their coverage of chiropractic services. The military currently does not cover chiropractic services either through its CHAMPUS coverage or as part of Veterans’ Administration benefits. However, the Department of Defense is currently studying the issue and has implemented demonstration projects at several bases around the country to study the usefulness and feasibility of making chiropractic services available. The Longshore Harbor Workers' Act permits chiropractic benefits for longshoremen injured on the job along the lines of Medicare coverage. Like Medicare, treatment is limited only to care of spinal subluxations demonstrated on x-ray. Although injured patients may directly access a chiropractor, patients may only select the first physician following an injury. Variability exists regionally, and often chiropractic subluxation must be verified by a medical radiologist for care to be allowed. Chiropractic care is also covered under the Federal workers’ compensation system. This too follows the Medicare benefits package but is subject to substantial variability according to policies of the regional carrier medical director for each plan. Some plans cover radiology services, some limit total visits to 12 or 20 per year, and some require referral from a medical physician gatekeeper.
F. General Coverage Issues for Chiropractic Services
Specific coverage decisions on chiropractic services are typically up to individual insurers within the constraints of State and/or Federal laws under which they are chartered. As a result, there is a great deal of variation in types of insurance products and interpretation of coverage requirements across plans and jurisdictions. The evolution of managed care programs, typically regulated separately from the rest of the insurance industry, further complicates matters. The relatively few chiropractors that provide input on specific coverage decisions have found it very difficult to provide advice on coverage that varies greatly from State to State and plan to plan.
Coverage decisions usually reflect specific issues and concerns (as well as experience and expertise) of the respective insurers: Medicare policies are driven by considerations of geriatric populations; workers' compensation emphasizes injury and care and occupational exposures; managed care and employer health programs are directed towards general family health issues. Therefore coverage decisions on chiropractic services may be based on economic and other nonclinical issues, as exemplified in the previous discussion on Medicare coverage. This situation is not unique to chiropractic care, and efforts at technology assessment (synthesizing relevant scientific literature, expert and clinical opinion) and guideline development is increasingly being relied upon to help fill the void (see Chapter VIII).
Typically, coverage decisions are made on a procedure-by-procedure basis, and rarely restrict services by patient demographics (e.g., age or gender). If a plan covers chiropractic, all patient populations are subject to the limitations of the particular policy. For example, in addition to older patients, Medicare covers Social Security disability cases. Hence a 15-year-old with a Social Security pension is subject to the same coverage restrictions as the elderly Medicare recipient. Similarly, limitations of a policy and the particulars of a treatment or diagnosis, rather than the age, usually govern chiropractic coverage for pediatric patients in employer-sponsored health plans.
G. Effect of Cost Sharing on Chiropractic Services
Cost sharing, capitation, and other mechanisms of insurance payment are increasingly being used to control health care use. An analysis of data from the 1974-82 RAND Health Insurance Experiment assessed the effect of cost sharing on the use of chiropractic services (Shekelle, 1996). This study reported that any level of cost sharing equal to or greater than 25 percent (which was the smallest level of cost sharing tested in the experiment) decreased chiropractic use by half, compared to free care. This made chiropractic care more sensitive to cost sharing than general medical care, outpatient medical care, or dental care, and about as sensitive as outpatient mental health care. Additionally, a likely cross price effect (the substitution of one service for another depending on price) between chiropractic care and medical care was shown. Persons with access to free medical (but not chiropractic) care used less than half as many chiropractic services as persons who had to pay equally for medical and chiropractic care. In view of the substantial changes in the nature of health insurance coverage for medical and chiropractic services in the past 15 years, it is not clear if these findings would still hold true.
Little is known about the effect of capitation on chiropractic care. Although anecdotal reports suggest that the number of visits per episode of care is reduced substantially when chiropractors enter capitated contracts, published reports could not be identified.
4. The ACA had 12,252 members (excluding students) as of November 1, 1996 (Personal communication from Dr. Christine Goertz, Vice President; Research Policy and Information Services, American Chiropractic Association, November 25, 1996). This represents roughly 25 percent of the 50,000 chiropractors believed to be licensed in the United States (Cooper, 1996).
5. The data set contained too few observations to examine the provision of chiropractic benefits in the five non-mondate states.
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