Billions of dollars are wasted on fraudulent or unnecessary medical care in this country, and chiropractic care has increasingly come under scrutiny for abusive care and billing practices. Dallas-based SmartLight Analytics dives deep into self-funded employers’ healthcare claims to identify and rectify fraud, waste, and abuse, and chiropractic care has increasingly been a source of fraudulent activity, says SmartLight CEO Asha George.
To aid its efforts in investigating fraudulent billing, SmartLight recently hired Bill Young to its team of experts as a head of clinical operations. He has 21 years of federal healthcare fraud investigative experience with the Health and Human Services Department, where he investigated fraud and abuse in Medicare and Medicaid programs. He described a case he worked on in St. Louis as an example of the type of fraud he sees in the chiropractic space.
A St. Louis chiropractor was bribing police officers for access to accident reports with identifying information of individuals who had been in a car accident. Then he would call the victims to solicit business, representing themselves as being from the insurance company or the state to set up appointments at his practice. Young says he sat on wiretaps and listened as the provider spoke on the phone about targeting Black communities because they were more likely to comply.
The chiropractor associated himself with lawyers who sued the insurance companies after accidents or pain management physicians and provided kickbacks to lawyers and doctors who sent patients their way. “The whole thing was just one big criminal conspiracy,” Young says. Though certainly an outlier, this is an extreme example of practices SmartLight sees regularly.
In 2021, a Houston chiropractor and his medical group were banned from billing federal payers for 10 years and settled with the federal government for $2.6 million after a fraudulent billing scheme involving neurostimulator electrodes that the practice was not authorized to administer.
An Office of Inspector General audit found that about $358.8 million, 82 percent, of the $438.1 million that Medicare paid for chiropractic services was unnecessary. George says that Chiropractic services cannot bill many services or high-priced procedures to Medicare, so bad actors are incentivized to increase the number of interactions or codes, especially for Medicare patients whose benefits reimburse fewer services. She says she sees providers who bill for every member of families and bill for procedures done to six-month-old babies.
“There are a lot of waste and medically unnecessary services in the space and people taking advantage of a patient population that is not fully aware what things are beneficial to them,” George says.
Finding fraud is more difficult for self-funded employers, who all have different benefits packages with each provider, whereas Medicare is more uniform. Around 70 percent of all healthcare costs in the country originate with self-funded employers, so there is plenty of places to look for this type of fraud. “Our mission is to bring transparency to employers. Employers are paying hundreds of millions of dollars each year, depending on the size of the employer and healthcare plan, with little visibility into the details of what’s being paid,” Asha says.
Abusive chiropractors and other providers often focus on target-rich environments like nursing homes or substance abuse rehabilitation centers to find new patients who may or may not need chiropractic services, Young says. “It’s creating its own cottage industry when you have these concentrated members at these facilities,” he says. “You have a rich environment and providers who descend upon these facilities because you have folks that are there and all of a sudden, it becomes serious dollars.”
Investigations into commercial insurance fraud rarely result in criminal prosecution. George says her mission is to identify the bad actors, remove them from networks to prevent future fraudulent spending, and get refunds for abusive or fraudulent billing. George says their work often helps payers rework their benefits plans to put in age limits and deny chiropractic work to those under the age of 7, for instance.
These issues are not limited to chiropractors by any means and are often widespread across multiple specialties, but chiropractors are certainly a hot spot for investigation. With a limited number of lower-cost codes to bill for, these practitioners need more patients, especially if they want to make as much money as many physicians. Though the service may only be $25 or $50, if that can be applied to every patient on every visit, it adds up quickly. Large employers usually don’t have the resources or expertise to review healthcare claims with such detail to root out the bad actors, and minor charges slip through the cracks.
“It’s become consistent in my 20 years in the industry that chiropractic care has been an issue,” George says. “Unless you’re looking at it claim by claim, the transparency isn’t there to understand what’s being paid for under your plan.”
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