A short, mostly first-hand history on insurance reimbursement for CAM
In litigating criminal and civil CAM (Complementary and Alternative Medicine) cases for three plus decades, I’ve seen a lot, and I have the medals and battle scars to prove it (meaning good and bad court opinions, jury verdicts and prosecutorial decisions). The decades have also given me a perspective on how things have changed, and haven’t.
For CAM insurance reimbursement (including chiropractic), I see one constant dynamic: Insurance carriers don’t like to pay for CAM services, so (some in) the CAM community come up with workarounds to get insurance companies to open-up their wallets. These workarounds work for a while, then they don’t, then there are new workarounds which work until they don’t, and so the dynamic goes.
Let me flush this out, largely based on my experience working on some of the big CAM insurance civil and criminal cases, investigations and medical board actions. Many of these matters were characterized by the government and/or carriers as “insurance fraud.” Fortunately, more often than not, the judge or fact finders didn’t agree, or at least didn’t think the government or carrier met its burden of proof.
CAM doesn’t get insurance reimbursement
In the 80’s, when CAM really started to take off, the carriers had short and vague exclusions in their policies about not paying for experimental or unconventional treatments/services. Even without specific definitions, those general policy exclusions were usually enough to stop most practitioners from filing claims or receiving reimbursement. Since most CAM treatments do not involve big money, individual patients and clinics did not litigate denials of claims for CAM treatments.
CAM figures out how to open the carriers’ wallets
A couple things happened in mid to late 80’s up until the early to mid-90’s which changed the CAM insurance payment landscape.
First, a few creative billing companies developed coding techniques to create some confusion about the nature of the services provided by CAM practitioners. One highly successful company made tens of millions of dollars for CAM clinics, and even obtained insurance payments for patients treated at Mexican CAM cancer clinics. They did this by creating chemo sounding acronyms for the treatments, and established a California based foundation for billing purposes which disguised the fact that the treatments were given in Mexico.
On the chiropractic front, a few chiropractor-turned consultants popularized the MD/DC business model, whereby chiropractic services were magically transformed into medical care. This regulatory alchemy was based on an obscure Medicare concept called “incident to” billing, the effect of which was to circumvent the severe limitations which most carriers placed of chiropractic care. These rules were also used to bill services of unlicensed people giving advice about “activities of daily living” as incident to services rendered by or under the MD’s provider number. Because of the efforts of these billing companies and consultants, tens of thousands of patients received care paid for by carriers which would have otherwise been denied by the greedy and heartless insurers. (I might not be unbiased.)
From the government’s and carriers’ point of view, it was all insurance fraud. It was relatively hard to prosecute insurance fraud back then, federally at least. Most of the victims were private carriers. There wasn’t much of a federal budget for these prosecutions, except for the most high profile or unlucky cases. (I worked on one of the big cases involving an unlucky and high profile doc.)
In addition, there were some impressive legal victories wherein carriers were forced to pay-out big judgments (including punitive damage awards) for denying expensive investigational or CAM cancer treatments. These judgement caused some shock waves in the health insurance industry and led to some very significant changes in the legal/regulatory/enforcement landscape.
The carriers and feds fight back hard
The carriers figured out that they were not paying for reimbursable conventional care, but rather, excluded CAM care. They were not happy and some started filing lawsuits against the practitioners and even the consultants and billing companies. The carriers also got the feds involved.
Federal prosecutions of insurance fraud became easier and more frequent because of a provision in the 1996 HIPAA law which made health care fraud against a private carrier a federal crime. (18 USC 1347, for those who care). The new law even made medically unnecessary testing and services prosecutable under the federal insurance fraud statute. With the change in the law came some significant federal money to fund federal insurance fraud prosecutions.
I worked on some of the major health insurance civil and criminal health care fraud cases in the 90’s. Mostly the results for my clients were good, but even so, as they say in criminal defense, “You can beat the rap, but you can’t beat the ride.” These cases were brutal and draining for the docs. And when the doc loses, he loses big; his/her medical license and freedom for a time. So the stakes in these cases are huge.
Civil lawsuits against health insurance carriers for non-payment of arguably experimental or unapproved care virtually ended in the 90’s once the carriers figured out that they could use ERISA (employment law) to make these cases unattractive and almost unwinnable by plaintiffs’ attorneys. (In short, ERISA law makes the carriers’ payment decision judicially reviewed under an extremely high abuse of discretion standard. Also, there are no punitive damages in ERISA, thereby removing a big incentive for the plaintiffs’ bar to file these cases.)
On the MD/DC front, the carriers and the feds fought back hard. Aetna went after one of the main MD/DC consultants and the MD/rubber stamp of 50 of the MD/DC clinics in the northeast.
The feds started prosecuting many of the chiropractor owners of the MD/DC clinics and their MD and DC employees. In the early 2000’s, the feds went after the most visible MD/DC consultant and one of his client-clinics in northern West Virginia. The chiro clinic owner got wind of the investigation and fled the country, but the MD, the two employee chiropractors, the office manager and the consultant who set the operation and told them how to bill the carriers were all indicted for insurance fraud.
The MD and office manager plead-out and did some time. The two chiros and the consultant went to trial, but all were convicted. The consultant was also convicted on money laundering charges, which is a very nasty crime because it imposes an unusually harsh sentence, far greater than mere insurance fraud. Despite three appeals, the consultant received a very lengthy prison sentence, and there’s no parole in federal time. This was the worst result I ever received in a case. The government would say that this person was responsible for many millions of dollars of insurance fraud and that he was fairly punished. (The chiro clinic owner who fled the country beat the government’s extradition efforts and continues to live in Ireland.)
This and the other prosecutions reduced the popularity of that MD/DC clinic model. One of the big CAM billing companies was eventually indicted, but the case was ultimately settled and charges dropped. A few docs were eventually indicted and there were some convictions, but nothing like in the MD/DC field.
In the mid 2000’s, there were still some MD/DC clinics but most were operating below the radar screen, and didn’t engaged in the most controversial forms of billing that the prior chiropractic consultants advocated.
Some CAM physicians continued to engage in the obfuscation techniques taught by the CAM billing consultants, but for whatever reason, there wasn’t much activity on the federal criminal front. I worked on an investigation of an autism clinic which used a billing technique to circumvent the carriers’ pathway edits for unconventional autism treatment. Eventually, the carries figured it out and contacted the feds which opened up a grand jury investigation. All I’ll say is that it’s a case you’ve never heard of because there was no indictment. But the clinic did close its doors once the carriers figured out what it was up to.
Also, starting in the mid- 2000’s there began to be a movement in the CAM community to produce specific codes for CAM services. It was called ABC billing (Alternative Billing Concepts). The idea was to create HCPCS type codes which could be used in billing insurance companies for CAM services. My take is that it’s had some success, but not for the primary therapy types of CAM like chelation therapy, environmental therapy treatments, and such.
The problem with the ABC endeavor is that it misunderstands the main reason why CAM practitioners aren’t getting paid for the CAM primary therapy. It’s not because, there is not a specific enough CPT or HCPCS code which is what the ABC codes try to solve. Rather, it’s because most carriers have a policy against paying for treatments not generally accepted by the conventional medical community.
To be fair, carriers do pay for some CAM therapies like acupuncture, chiropractic and even nutrition counseling (given by a properly credentialed provider), but 1. The reimbursement rates for these services are low and 2. That doesn’t help the integrative practitioner who uses a wide variety of primary therapeutic CAM modalities which are not payable under the plans.
So however laudable the ABC coding effort is, it won’t solve the CAM practitioners’ main problem, which is insurance policy exclusion of most or all primary CAM treatment modalities.
What comes around and goes, comes around again
In the last few years, a new billing and coding model has been promoted to the CAM community by various CAM coding companies. It involves use of an arcane Medicare concept, the “incident to” rules, which turn services of NPP (non physician practitioners) and chiropractors into physician services in order to 1. Obtain 100% physician reimbursement rates, rather than the 85% rate of NPP’s, 2. To circumvent the limitations of chiropratic in Medicare and third party pay plans, and 3. To bill people without any health care license or certification under as services of the MD provider. What a novel approach!
In the old days, Medicare had more rigorous and restrictive payment practices than all private carriers, so following Medicare’s rules was in effect, a safe-harbor or guaranty of compliance with the rules of the private pay carriers. However, those days are gone. Some private health insurance have stricter rules than Medicare and/or don’t follow all of Medicare’s rules. So the Medicare safe harbor concept doesn’t necessarily work anymore.
These new CAM billing companies also have some novel interpretations of various other codes, which, it is claimed, obtains insurance reimbursement for primary CAM therapies such as chelation therapy for heart conditions and even detox. You can probably guess some of the ways they achieve these results.
If you are following the advice of one these billing companies, keep this in mind; just because the carriers’ payment computer programs are spitting-out checks to you for CAM treatments doesn’t mean the carriers actually know what they are paying for, or that they won’t ask for their money back, if and when they ever figure out what’s going on.
And on it goes.
Rick Jaffe, Esq.