🇺🇸United States

Risk of Perceived Upcoding or Medically Unnecessary Care When Verification Is Weak

3 verified sources

Definition

Improper coordination between verification, authorization, and clinical documentation can create patterns that auditors interpret as abuse (e.g., billing covered active‑treatment codes when verification would show only limited or no benefit). While explicit fraud cases tied purely to verification in chiropractic are not well documented publicly, audit and compliance guidance indicates that misaligned verification and billing patterns are a known risk vector.

Key Findings

  • Financial Impact: Potential losses include payer recoupments of months of claims and termination from insurance panels, which can remove a large share of a clinic’s insured revenue; a clinic deriving 60% of revenue from one payer could lose tens of thousands per year if deselected.
  • Frequency: Occasional but systemic when patterns go unchecked
  • Root Cause: Clinics do not use verification results to constrain billing to covered, authorized services; they may continue billing active‑treatment codes after visit limits or medical‑necessity thresholds are exceeded, exposing them to audits and accusations of abuse.[1][6] Poor documentation of verification findings and patient responsibility agreements further blurs the line between covered and non‑covered services.[7]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Chiropractors.

Affected Stakeholders

Chiropractor/Owner, Billing manager, Compliance officer (if present)

Deep Analysis (Premium)

Financial Impact

$10,000–$25,000/month in recoupments from auto payers; deselection from auto panel = $50,000–$150,000/year revenue loss (auto PIP often 20–30% of revenue) • $100,000–$300,000 per audit cycle (recoupment of claims based on incomplete verification; potential panel termination) • $100,000–$300,000 per RAC audit (recoupment of disallowed maintenance-coded services)

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Current Workarounds

Assistant codes based on clinical work; no real-time access to authorization scope; relies on billing team to catch errors • Assistant codes based on clinical work; no real-time access to current Medicare medical necessity rules; relies on billing team verification • Assistant codes based on treatment provided; no real-time access to PIP/Med-Pay exclusion list; relies on billing team catch-up

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Unpaid or Written‑Off Visits from Skipped/Bad Eligibility & Authorization Checks

For a 2‑DC clinic seeing 80 insured visits/week at $70 allowed per visit, a conservative 5–10% of claims lost or written off from eligibility/authorization issues equates to ~$1,100–$2,200 per week, or ~$4,800–$9,600 per month.

Regulatory and Payer Compliance Exposure from Improper Medicare & Pre‑Auth Handling

While specific dollar amounts vary by audit, even a small post‑payment review clawing back 6–12 months of improperly billed chiropractic services can easily reach tens of thousands of dollars in recouped payments plus administrative and legal costs.

Excessive Labor Cost from Manual Insurance Verification and Pre‑Auth Chasing

A single FTE spending 3 hours per day on manual calls and follow‑ups at $20/hour costs ~$1,200 per month; replacing even half of that effort with automation yields ~$600+/month in avoidable labor cost, not including opportunity cost of staff not performing revenue‑generating tasks.

Rework and Resubmissions from Inaccurate or Incomplete Verification Data

If 10–15% of claims require rework at 10–15 minutes each of billing staff time at $20/hour, a clinic submitting 400 claims/month can easily incur $260–$600/month in avoidable rework labor, excluding the cash‑flow cost of delayed payments.

Payment Delays from Eligibility- and Authorization‑Related Claim Denials

For a practice averaging $60,000/month in insurance receivables, if 30% of denials stem from coverage/eligibility issues and remain unresolved for an extra 30–60 days, this can tie up $6,000–$12,000+ in working capital at any given time, effectively a hidden financing cost.

Lost Provider and Staff Capacity from Phone‑Based Verification Bottlenecks

If front‑desk staff lose even 1 hour/day to payer calls that could be automated, that is ~21 hours/month; at $20/hour this is ~$420/month in wasted capacity, plus the revenue lost from patients who could have been scheduled or checked in during that time.

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