Chiropractors Pained by Cuts to State Plan’s Out-of-Network Payments

Andrew Kitchenman | September 16, 2015 | Health Care
Service providers go to court to appeal changes in state health benefits limiting out-of-network reimbursements to $35

New Jersey chiropractors feel singled out by an upcoming change in the main health plan for public workers — and they’ve gone to court to appeal it.

Under a revision to the State Health Benefits Program, chiropractors who are outside of a worker’s insurance network would be limited to payments of $35 per visit or 75 percent of the in-network payment — whichever is less. The State Health Benefits Program’s Plan Design Committee approved the change in July.

Arguing that no similar healthcare services were singled out for payment limits — although acupuncturists are being held to $60 a visit — the Association of New Jersey Chiropractors announced that it would appeal the change in state courts.

The case pits a healthcare profession that has had to lobby to be treated equally with other fields against a state body that’s looking to trim costs across a wide range of benefits. But while state officials have put the change — which is estimated to save $2 million annually — in the context of a larger effort to slow the growth of health spending, that doesn’t mollify those chiropractors who’ve chosen to remain out-of-network.

The debate is occurring against the backdrop of a broader discussion of out-of-network costs. Legislators have proposed a bill that aims to limit out-of-network costs.

Doctor of chiropractic Steven Clarke, who’s pursuing the appeal along with the ANJC, said that while there are always discussions among insurers about changes that would contain the cost of chiropractic benefits, he was not expecting such a major move. Until now, the state health plan didn’t specify a limit on out-of-network chiropractic payments, which are generally based on a chiropractor’s usual and customary charges.

“We had no idea what they were doing, to this extent,” Clarke said of the state action.

The design committee resolution making the change also includes a requirement that state plan’s insurers (currently Horizon Blue Cross Blue Shield of New Jersey and Aetna) raise their in-network rates in order to attract more chiropractors and acupuncturists to their networks. The $35 rate would only apply to providers who remain out of network.

Their success in doing so may determine whether the state plan takes a similar cost-cutting approach to other out-of-network healthcare services in the future, according to the resolution.

Clarke, whose practice is in Nutley, is the chairman of the legislative committee for the ANJC. The association’s members include about 1,900 of state’s 2,300 licensed chiropractors.

“We don’t know why they took this action; of course they’re going to put it under” the banner of cost containment, Clarke said.

But Clarke said the savings would amount to roughly 12 cents per month for each state plan member.

Association lawyer Jeffrey Randolph said that chiropractors are being unfairly penalized, particularly given that physical therapists have not had the same state out-of-network restrictions applied to them. He added that physical therapy costs frequently exceed those for chiropractic services.

State Department of Treasury spokesman Christopher Santarelli defended the change, noting that the state would continue to cover chiropractic services. He added that the new limits were part of a broader series of plan design changes aimed at saving $100 million in costs.

On the same day that it approved the change to chiropractic and acupuncture, the plan design committee also approved five other changes designed to lower health costs. First, they adopted resolutions that restricted use of certain compound drugs (medications that are mixed or altered at specialized pharmacies). Second, they required that a less-expensive Hepatitis C drug be tried before using more costly medications. Third, they created a tiered health plan. Fourth, they approved a patient-centered medical home pilot. Finally, they gave the nod to a patient-centered medical home for Rutgers University employees.

[related]“We were gratified with the design committee’s July 6 actions that focused on improving health outcomes and finding savings for the health benefits program,” Santarelli said.

Clarke countered that chiropractors save insurers and patients money by treating problems before they develop into more costly health issues. He noted a study of Blue Cross Blue Shield of Tennessee patients that found 40 percent cost savings when patients went to chiropractors for lower back pain compared with those who went to medical doctors.

“This is something we’re just totally perplexed by,” he said. “How did they come up with this $35 per visit?”

Clarke said he’s not sure if the new out-of-network maximum payment would apply only to chiropractic examinations, or would it also include taking x-rays and other services that chiropractors frequently perform.

“It is so unclear and so left dangling out there,” he said.

Clarke expressed a concern for patients who may face higher out-of-pocket costs if they want to keep their out-of-network chiropractor.

“They’re getting less and they weren’t even told” about the change before the July meeting, Clarke said.

As an example of how the payments currently work, an out-of-network chiropractor that charges $90 for a visit could expect to receive 80 percent ($72) from the insurer, and $18 from a patient if the chiropractor doesn’t waive the coinsurance fee. Under the new plan, the same chiropractor would receive $35 from the state and could seek as much as $55 in out-of-pocket costs from a patient to offset the amount if the chiropractor charged the same amount.

Clarke said he provides services to police officers from at least 30 towns.

“These (officers) are the fabric of our state that hold us together here, and they’re being asked to pay more and more,” he said.

Clarke noted that plan design committee members spent more time discussing potential cuts to physical therapy than they did on chiropractic services, according to his review of committee meeting minutes.

“We’re not saying they should be reduced — people need that care,” Clarke said of physical therapy. “But the state worker is getting screwed.”

Clarke said he took his own practice out of insurance networks roughly seven years ago because he wanted to focus only on the needs of his patients, and not be “beholden” to insurance company rules. The state plan limits the chiropractic benefit to 30 visits per year.

“I’m certainly going to do what’s legal and proper, but I’m beholden (only) to my patients,” he said.

Clarke also questioned how he could pay his staff when he’s being paid a rate similar to that of the 1970s.

“The bottom line: They took it out on the chiropractic profession and our patients and they didn’t do it to anybody else,” he said.

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