Printer Friendly

Utilization management applied to chiropractic area.

Utilization Management Applied to Chiropractic Area

Christopher Rodriguez, 33, drives a delivery truck for a large food products distributor in San Jose, CA. In July 1988 he injured his back while lifting boxes onto a grocery store delivery platform. For the next 13 months he received more than 100 chiropractic treatments without any discernable improvement. In September 1989 he was diagnosed as having suffered from a herniated disk due to the original injury. The herniated disk required surgery, a treatment that would have been appropriate earlier and would have save more than $5,000 in unnecessary chiropractic care.

This story is immediately recognizable to those familiar with chiropractic overutilization. When used judiciously, this discipline can be a cost-effective form of treatment. Unfortunately, many chiropractors treat patients beyond the period necessary for acute symptom relief. Moreover, some practitioners have been known to falsify an entire course of treatment as recently revealed by an undercover investigation by the Oregon State Workers Compensation Fund which resulted in the arrest of six chiropractors.

Nationally, chiropractic care costs Americans $8 billion to $9 billion per year, an expense primarily associated with workers' compensation, auto liability and group health coverages. Today there are about 35,000 practicing chiropractors in the United States, double the number in 1975.

A simple, low-cost method of concurrent review is now available that can reduce chiropractic costs by 25 percent. It has been tested in the first randomized controlled study of outpatient review in the nation. The study was conducted by Gregory Johnson, an associate, and Alex Swedlow, medical utilization analyst, of National Medical Audit Inc., a subsidiary of William M. Mercer Inc. Industrial Indemnity Insurance Co., a client, provided the data and implemented the program which is expected to reduce the insurer's $12 million per year chiropractic bill by $3 million.

The chiropractic review program is based on four principles: early intervention, peer review of care, the curbing of "coding creep" and prospective guidance rather than retrospective disputes. Early intervention by a chiropractic reviewer can avert an ineffective course of treatment without unnecessarily burdening busy claims adjusters. Mr. Johnson says chiropractic treatment often builds in small increments until the provider attains a large total bill. This pattern, he says, sometimes occurs without close scrutiny by claims adjusters, who devote their attention to more dramatic and costly cases.

In terms of peer review, chiropractors are more likely to respond positively to review by other chiropractors rather than physicians, nurses or claims adjusters. Once the diagnosis is known, the reviewer can indicate to the treating chiropractor the appropriate length of care based on established treatment protocols. Moreover, unnecessary x-rays can be eliminated by prescribing the appropriate part of the body to be viewed.

Aside from extending the length of treatment, Mr. Johnson maintains, "The practice of `upcoding' their billings to higher than appropriate values makes chiropractic care appear costly." A "limited" office visit might be billed, for example, as a "comprehensive" visit, generating an extra $40 in payment. Thus, Mr. Johnson continues, "The chiropractic reviewer is responsible for outlining to the treating chiropractor the permissible billing levels at the outset of the case."

Finally, the program is based on precertification because it is more efficient to reduce medical costs prior to treatment rather than after. As is the case with the most effective hospital utilization review systems, the certified length of treatment is provided to the agency responsible for processing bills so future payments can be denied if excessive treatment persists.

In January 1989 Industrial Indemnity began to transmit information on chiropractic cases to a review company, Preferred Utilization Management Inc. PUMI contacts the treating chiropractors by mail, outlining the appropriate length of treatment and permissible billing levels. This information is also sent to the claims office and a bill review vendor which process the subsequent billings from treating chiropractors. All subsequent billings are compared to PUMI's recommendation to ensure appropriate payment by Industrial Indemnity. Approximately 10 percent of the cases are disputed. PUMI handles these over the telephone with the treating chiropractor.

During a one-year period, 300 chiropractic cases from throughout California were randomly assigned to one of two groups: group one, an experimental group, consisted of chiropractic cases receiving PUMI reviews using the method above; and group two, a control group, received no chiropractic review, but was handled according to standard claims practices. According to Mr. Johnson, because the range of work-related chiropractic problems is narrow and assignment was random, differences in severity, age, sex and diagnosis are unlikely to influence these findings.

Each case was tracked by monitoring total medical and temporary disability costs. After one year, Mr. Johnson and Mr. Swedlow analyzed the 300 closed cases and discovered that total medical costs per case were 25 percent less for the experimental group. Those in the control group spent $1,027 on average per case, while those in the utilization management group spent $771.

When these figures were more closely examined, it was concluded that while temporary disability payments were approximately equal for the two groups, the 25 percent difference was almost completely attributable to a reduction in medical costs for the reviewed utilization management group. In addition, the average net medical cost per visit for those in the control group was $62, while those in the experimental group spent $54 per visit, a savings of 13 percent.

Finally, the average treatment visits per case for the control group was 17 vs. 14 for the experimental group, or 18 percent fewer. Mr. Johnson says the reduction in overall case costs for the experimental group occurred because of the combination of the 13 percent decrease in average cost per visit coupled with the 18 percent decrease in number of visits.
COPYRIGHT 1990 Risk Management Society Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Risk Management
Date:Aug 1, 1990
Words:950
Previous Article:What's more telling than a survey.
Next Article:ORIMS members chat with Wellington executives.
Topics:


Related Articles
ACN-HP RECEIVES CALIFORNIA'S FIRST CHIROPRACTIC HMO LICENSE
CHIROPRACTIC COSTS LESS THAN MEDICAL TREATMENT FOR NECK, BACK PAIN, NEW STUDIES CONCLUDE
Rural Areas More Likely to Offer Chiropractic Benefit.
HCFA and Office of Inspector General to Obtain Data on 'Chiropractic Utilization' in Medicare Managed Care Organizations.
Pennsylvania, N.J. Chiropractors Sue Independence Blue Cross.
American Specialty Health Networks First in Nation to Receive National Accreditation for Massage Therapy, Dietetics and Naturopathy Programs.
Western States Chiropractic College Receives $84,000 Grant from United Way For its West Burnside Chiropractic Clinic.
Running workers' compensation utilization reviews: there is significant evidence that the increases in workers' comp medical costs are being driven...

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters