Notice to all Patients of Chiropractic: Don’t let the Insurance Co. Control your healthcare.
Ariz. chiropractors fear tougher scrutiny may hurt industry
87 commentsby Ken Alltucker – Apr. 6, 2011 12:00 AM
The Arizona Republic
Chiropractors say that changes in payment policies by two major private health-insurance companies could slash their income, reduce patient visits and even force some practitioners out of business.
One industry group has funded a lawsuit against the director of the Arizona Department of Insurance that seeks to force the agency to halt what chiropractors describe as insurers’ unfair payment practices and different standards for chiropractors compared with medical and osteopathic physicians.
The issue involves an arcane change in how health-insurance companies manage benefits for chiropractic services. But the dispute demonstrates how increasingly cost-conscious insurers and alternative-health providers can clash over issues of payment and what care is medically necessary for patients.
Blue Cross Blue Shield of Arizona and Cigna HealthCare of Arizona Inc. have outsourced management of chiropractic benefits for some customers to a San Diego-based company, American Specialty Health Inc.
Chiropractors, whose numbers and pay have been declining in Arizona, worry that American Specialty Health’s scrutiny will limit insurer-paid visits to a handful per year. Consumers who require as many as 25 visits per year may have to pay for most of those visits with their own money, chiropractors say. They also worry that the company will drastically slash their reimbursement rates.
The insurers and American Specialty Health say that customers’ insurance policies won’t change and that medically necessary visits still will be covered.
The dispute is just one example of the tightening financial picture for many health-care practitioners.
Insurers are seeking to rein in spiraling medical expenses, from scrutinizing doctors’ payments to introducing high-deductible plans that make consumers pay more of their health-care bills. Employers, also seeking to beat back rising health costs, are offering less generous benefit plans to employees that may include higher deductibles and co-payments.
Arizona chiropractors worry that scrutiny from companies such as American Specialty Health will create another economic problem for the industry. Some chiropractors have closed shop, and others are asking more customers to pay cash.
“I have never seen a cash-flow crisis like this in my entire career,” said Alan Immerman, president of the Arizona Chiropractic Society, which funded the lawsuit against the Department of Insurance’s director. “It is just desperate. I can’t see how doctors stay in business.”
Chiropractors practice an alternative health care that involves treating, manipulating and adjusting backs, necks, arms, legs and joints. Practitioners do not have the authority under state law to prescribe drugs, relying on natural remedies instead.
They are fighting back aggressively against the insurers at a time when the profession is already stressed by recession.
The number of licensed Arizona chiropractors has dropped more than 4 percent over the past two years, according to the Arizona Board of Chiropractic Examiners. There are 2,288 chiropractors with active licenses; 357 licenses are suspended due to lack of renewal, are inactive, retired or on probation.
Chiroprators’ average pay in metropolitan Phoenix plummeted 32 percent from 2006 to 2008, according to Bureau of Labor Statistics data. The typical Phoenix-area chiropractor earned $60,360 in 2008, down nearly $29,000 from just two years earlier.
The drop in practicing chiropractors mainly stems from the poor economy, according to Patrice Pritzl, the board’s executive director.
Fewer students are pursuing careers in the field. There are no chiropractic schools in Arizona, and a Los Angeles school, the Cleveland Chiropractic College, announced last month that it would close, citing challenging economics and declining student enrollment as factors.
Arizona chiropractors say they see the economic struggles every day.
“A lot of chiropractors will say, ‘I’m tired or I’m burned out,’ ” said Aaron Wiegand, a Phoenix chiropractor. “What that means is they can’t meet overhead.”
Wiegand cited a recent example of a colleague who drove his car to Wiegand’s parking lot, popped the vehicle’s trunk and offered to sell Wiegand about $1,000 in chiropractic equipment.
“He said, ‘I can’t do this anymore. I’m going to go teach anatomy’ ” at a community college, Wiegand said.
Other chiropractors are relying less on private-insurance companies and instead are offering discounted care for customers who are willing to pay cash.
Rich Felsing of Flagstaff said he and his fellow chiropractors are feeling the pinch. They had enjoyed a steady stream of customers from Northern Arizona University, but health benefits for those university employees have become less generous.
Many of the NAU employees have Blue Cross Blue Shield-administered health-insurance plans.
“I know a number of chiropractors have seen a significant drop in patients from the first of the year,” Felsing said.
Health insurers seek to rein in rising medical costs though several methods. They sign agreements with doctors and other practitioners, negotiate rates for health-care services, and review claims to ensure the services are necessary and meet contractual terms.
The idea is to keep medical costs lower and pass along the savings to employers and individuals who purchase insurance policies.
Blue Cross Blue Shield of Arizona, Cigna and other insurers have used American Specialty Health to manage chiropractic benefits for their health-maintenance organization plans.
Blue Cross Blue Shield, which is Arizona’s largest health-insurance provider as measured by premiums, switched to American Specialty Health for all of its insurance products that cover chiropractic care effective Jan. 1. On April 1, Cigna began using American Specialty Health for two additional types of insurance plans.
Contractors such as American Specialty Health have a higher level of expertise for alternative-medical fields such as chiropractors. That allows these contractors to better manage such health care, insurers say.
“The purpose was to improve the quality of chiropractic-service levels for our members as well as contain costs,” said Regena Frieden, Blue Cross Blue Shield of Arizona spokeswoman.
American Specialty Health manages claims on behalf of insurance companies for specialty and alternative fields such as chiropractic, acupuncture, massage therapy, naturopathy and other fields.
American Specialty Health President and Chief Operating Officer Bob White said the company helps insurance companies evaluate whether claims are medically necessary.
Chiropractors can generally submit payment claims for five office visits per patient. After that, they must submit detailed medical information to prove that additional visits are medically necessary.
In some cases, American Specialty Health does not require such medical proof until the eighth or 12th visit, according to the company.
Chiropractors fear that their patients will face more red tape and scrutiny as they seek treatment for chronic pain or other medical conditions that require more than five visits.
“The profession and patients are all panicking,” said Thomas Blankenbaker, a Phoenix chiropractor.
Blankenbaker, with the backing of the Arizona Chiropractic Society, sued Christina Urias, director of the Arizona Department of Insurance. The lawsuit seeks to force Urias and her agency to enforce a state law that requires equal treatment among medical doctors, osteopathic doctors and chiropractors.
A Department of Insurance spokeswoman declined to comment on the pending lawsuit, which was filed March 14 in Maricopa County Superior Court.
The lawsuit alleges that chiropractors are allowed to treat a patient for five office visits, but after that, American Specialty Health requires the chiropractor and patient to get authorization for future visits.
Medical and osteopathic physicians are not held to the same limits even if they are providing similar treatments for patients, the lawsuit alleges.
The lawsuit says that the American Specialty Health typically limits a patient to 6.5 office visits per year, even though some patients require 25 visits or more.
White would not say whether the average figure of 6.5 visits per year was correct. The company, however, said that it has authorized a range of five to 115 visits for patients in Arizona.
“I think statistics can be used inappropriately,” White said.
“An average is an average. It doesn’t define a maximum threshold or limitation at all.”
The lawsuit also alleges that American Specialty Health limits payments to $44 for a typical chiropractic visit, and patients pay most of that with a $40 co-payment required by many Blue Cross Blue Shield plans. That means the insurer pays the chiropractor $4 per visit, according to the lawsuit.
Neither Blue Cross Blue Shield nor Cigna are listed as defendants in the lawsuit.
The lawsuit alleges that Urias “knows about the coverage discrimination described in this claim for relief, or should know about it, but has done nothing substantive to end it.”