Physical Medicine Benefit Management

Maximizing the Value of Physical Medicine Benefits

Back pain is a prevalent and costly problem

8 out of 10 people are affected by back pain at some point in their lives.1 Direct costs for treating back and neck problems in the United States total $86 billion annually.2 For employers, back pain is the second most expensive chronic health condition in medical costs, and the fourth most expensive in total health and productivity costs.3

Data from the Gallup-Healthways Well-Being Index® indicates that individuals with back pain have lower than average levels of overall well-being and lower scores on 6 out of 6 areas of well-being. As such, back pain is connected to physical health, emotional health, healthy behavior, work environment, and more.

Most health plans recognize chiropractic care as a clinically accepted mode of treatment for the management of musculoskeletal conditions, but few have analyzed member use of the chiropractic benefit, the value it delivers, and how it contributes to overall costs.

The current medical approach to treatment of back pain typically involves some combination of extensive diagnostic work-up that includes various imaging studies, medications, injections, physical therapy, and spinal surgery. In select cases, this approach is clinically indicated, appropriate, and delivers successful outcomes; however, in many cases, the outcomes are poor and costs are high.

Chiropractic care has demonstrated clinically effective outcomes while reducing costs compared to other treatments

The American College of Physicians and the American Pain Society published Diagnosis and Treatment of Low Back Pain: A Joint Clinical Practice Guideline in 2007 that concluded spi-nal manipulation was effective for both acute and chronic low back pain.4 A recent evidence-based assessment of the cost-effectiveness of chiropractic care found it highly cost-effective compared to medical physician care for the treatment of neck and low back pain.5

Misguided and ineffective treatment can lead to significant, ex-cessive claims costs. One study found Fortune 500 companies wasted more than $500 million annually on avoidable back sur-gery, leading to $1.5 billion in missed work and lost productivity.

More than 8% of American adults and three percent of children received chiropractic or osteopathic manipulation in a recent one-year period.6 Among people who use chiropractic services for low back pain, 66% perceive “great benefit.”7

Evidence indicates a sizable opportunity for health plans to influence the appropriate use of chiropractic services while raising care quality, member satisfaction, well-being, and re-ducing overall costs of care.

Based on external research and customer experience, Health-ways has identified five key strategies for health plans to max-imize the value of chiropractic benefits.

1. Address the high cost of back pain through early identifi-cation that drives proactive member outreach, interven-tion, and appropriate referral to chiropractic care as clini-cally indicated.

90

0

80

70

60

50

40

30

20

10

Well-Being & Back Pain: Domain Summary

Composite Well-Being

Score

Life Evaluation

Emotional Health

Physical Health

Healthy Behaviors

Work Environment

Basic Access

70.4

58.7 56.0

36.1

82.9

71.4

83.8

61.765.6

60.8

49.743.8

84.378.0

No Back Pain

Back Pain

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2. Analyze current member utilization of chiropractic servic-es to identify opportunities for quality improvement, and assure clinically indicated and cost effective care.

3. Ensure the chiropractic benefit design reflects and sup-ports evidence-based standards of care.

4. Build collaborative relationships with providers.

5. Invest in efficient, effective utilization management to re-duce and eliminate medically unnecessary care.

Identify and intervene to address gaps in back pain care

Inflation-adjusted back and neck pain expenditures, driven by pharmaceutical and outpatient costs, grew at a compound annual rate of 6.4% from 1997 to 2005.8

Only routine exams, hypertension, and diabetes are responsible for more physician office visits than back pain.9 An assessment of the value of treatment for back pain, considering both cost and clinical outcomes, found chiropractic manipulation outperformed both physician care and physical therapy.10

Each day, U.S. hospitals see about 9,400 emergency room vis-its and 1,820 hospital inpatient admissions, primarily for back problems. Overall costs for inpatient stays exceed $9.5 billion annually, making it the 9th most expensive condition treated in U.S. hospitals.11

Simply offering a chiropractic benefit to members may have little effect on patterns of health care use. Back pain programs that address key gaps in member care can help health plans avoid unnecessary surgeries and spending on ineffective treat-ments. Gaps in member care to be considered may include:

• Ineffective pain management approaches

• Inadequate screening for behavioral health conditions

• Suboptimal physician adherence to, or understanding of, evidence-based care guidelines

• Inappropriate utilization of surgery and imaging

• Inadequate use and/or understanding of self-care strategies by patients

• Under-referral to non-surgical spine therapy professionals

An effective approach to managing back pain within plan or employer populations should include:

• Mechanism for referral by PCPs or from other health plan programs such as case management

• Claims analysis to identify and prioritize members for outreach

• Comprehensive clinical intake and assessment of iden-tified members

• Personalized support based on individual need—pain management, care coordination, behavioral coach-ing, and/or direct referrals to qualified chiropractic providers and other alternative medicine providers such as acupuncturists and massage therapists when appropriate.

In addition, health plans that cap chiropractic benefits with-out managing the back pain problem will likely escalate over-all claim costs.

• Average lumbar surgery: $35,000.

• Average annual physical therapy for chronic/recurrent low back pain patients under Medicare: $1,750.

Care CostsOutcomes

30 to 40%

Improved Pain and Disability

Outcomes

Effect of Choosing Chiropractic Care Over Medical Care for Chronic Low-back Pain12–15

20051997

23.719.0

19.8

30.8

9.0

17.8

7.3

6.2

85.9

52.1

Other

Emergency

Pharmacy

Outpatient

Inpatient

2.6

1.8

Estimated Healthcare Expenditures for Spine Problems Among US AdultsInflation Adjusted for 2005 Dollars$ Billions

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• Average annual pain/sleep medications for chronic/recurrent low back pain patients: $1,100.

• Additional costs in ER visits, hospital admissions, radi-ology and high-tech imaging, along with primary care and specialist visits.

Understand physical medicine benefit use and opportunities for improvement

Large health plans may view physical medicine expenditures as relatively insignificant, but plans without controls or man-agement programs for these services typically lack a more complete understanding around the impact of this benefit on total costs. Working with health plans on a consultative basis, Healthways has found that most clients are surprised by the results of a detailed analysis of their claims and related cost drivers.

Historical trends in utilization, average member visits, pro-vider patterns of service, and provider costs can all shed light on opportunities to improve the value and cost-effectiveness of physical medicine services. Every health plan will have different issues and opportunities, based on the member population, provider community, and other factors. Physical medicine expertise is essential to effective data analysis and responsive action planning.

Health plans should seek a partner with both the necessary technology to integrate and analyze data as well as the clini-cal expertise to identify patterns of service inconsistent with evidence-based practices.

Healthways analyses of chiropractic and physical therapy costs for multiple health plan customers have found annual spending beyond $100 million and members with more than 100 annual visits.

Ensure benefit design reflects standards of care

Variable provider practices, both in determining an appro-priate care plan and in billing for that plan, can lead to sig-nificant and unnecessary chiropractic and physical therapy costs. Health plans should ensure that the design of their physical medicine benefit clearly defines medically necessary care and supports evidence-based practices.

Provider fee schedules along with billing and coding guide-lines establish the ground rules for providers. These resources improve quality while containing costs when based on ac-cepted standards of care. They should:

• Identify specific services, procedures, and frequency for optimal clinical outcomes.

• Differentiate medically necessary (covered) care from non-covered services.

• Clearly define how and what to bill within the range of covered services.

Healthways helped a Blue Cross Blue Shield health plan achieve substantial, ongoing savings by implementing mar-ket-appropriate fee schedules, updated billing and coding guidelines, and a Utilization Management Program to ensure the medical necessity of paid claims.

Strengthen provider networks and relationships

A strong provider network marked by effective communica-tion plays an essential role in delivering high-value services to members.

On an ongoing basis, health plans or partners should verify in-network provider credentials, using an NCQA-certified Credentialing Verification Organization. Provider license, li-cense restrictions or complaints, liability coverage, malprac-tice claims, and Medicare/Medicaid sanctions are important considerations.

To enhance provider receptivity to change and performance improvement, health plans or partners must bring clinical expertise to the table. Benchmark data and patient-centered outcome instruments, such as the Functional Rating Index (FRI), are valuable resources to drive provider engagement. Rather than penalizing providers with less than optimum re-sults, a peer-to-peer counseling approach improves service delivery and minimizes member disruption.

As part of a cost containment and quality initiative in partner-ship with Healthways, a large national health plan implement-ed the Healthways Physical Medicine Benefit Management program in multiple markets.

• Through proactive provider outreach and education in multiple markets, Healthways recruited on average 90% +/- of each plan’s existing providers by the tran-sition date, minimizing member disruption of service and significantly expanding access.

• Focused outreach to a mobile workforce for a priority employer customer supported a seamless transition for members.

• Practitioner quality benchmark reports, issued and reviewed annually, help providers view individual per-formance as compared to their network peers.

Plans to improve delivery of the physical medicine benefit will achieve the greatest success with advance provider commu-nication and opportunity for input. Strategies may include:

• Meetings with local professional society leaders

• Provider participation in design/implementation committees

• Local orientation and training meetings

• Provider-specific website with access to online educa-tional materials and resources

• Provider education webinars

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A Northeast health plan sought help reversing years of spend-ing increases for chiropractic care. The state chiropractic so-ciety had a record of proactive litigation. The plan sought to enhance provider relations and minimize member disrup-tion. The collaborative relationship that Healthways helped reinforce with the plan’s own chiropractic network enabled implementation of several quality and cost control measures, including a utilization management process that receives re-markably few appeals.

Invest in effective utilization management

Utilization management helps ensure provider compliance with evidence-based treatment guidelines. Because it in-volves oversight of provider care, implementation can be met with some level of practitioner resistance. Beyond involving providers in discussions of criteria and process before imple-mentation, health plans should seek a utilization manage-ment approach that minimizes provider effort and wait time.

A highly successful and efficient utilization management system:

• Maintains URAC accreditation, the gold standard for uti-lization management.

• Offers easy methods of interface for providers.

• Continuously integrates health plan data, enabling real-time pre-screening and approval of proposed care plans.

• Supports secure, streamlined submission of clinical re-cords as needed.

• Authorizes/responds to provider care plan requests within 24 to 48 hours.

• Monitors program performance standards and decision consistency.

• Supports health plan and state requirements—any or-ganization making determinations of medical necessity for member benefits must be authorized to do so in each respective state.

For a health plan in the Southeast, Healthways network man-agement and utilization management services increased the provider network by 50% and produced an ROI of more than 4 to 1 for the health plan.

For another health plan, Healthways utilization management services, initiated at a relatively high annual threshold num-ber of visits per member, produced an ROI of 7 to 1. Fewer provider requests for approvals over time indicate increasing understanding and acceptance of medically necessary treat-ment levels and threshold review.

Healthways has found benefit in facilitating provider commu-nication when treatment plans are not approved or approved with modifications. If providers can request a peer-to-peer discussion before members make a formal appeal, most cas-es can be resolved without further action. This step fosters the sharing of clinical expertise and acknowledges unique patient circumstances one member at a time.

The peer-to-peer discussion option that Healthways offers as part of the utilization management process results in a formal appeals rate at 1% or less.

On a consistent basis, most health plans will experience some member and provider patterns of use that fall significantly outside the norm, particularly for out-of-network utilization. Utilization management systems can help identify signs of fraud and abuse. Clinical expertise is required to investigate these issues, conduct a detailed retrospective review of medi-cal necessity, and support appropriate legal action.

Healthways performed special investigation reviews of chiro-practic services for one Blue Cross Blue Shield client over five years. In connection with a subset of 100 reviewed cases, the client pursued legal action against three particular providers and recovered in excess of $700,000 in paid claims, with the help of Healthways expert testimony.

Summary Perspective

Inappropriate use of physical medicine benefits cost many health plans more than they may realize. The opportunity to improve care quality and value by influencing the delivery of these services is significant, particularly in light of the preva-lence and cost of back pain across the U.S. Integrated benefit and condition management that delivers better outcomes at lower overall costs, combined with clinically indicated, high quality care delivery that results in an enhanced member ex-perience, are essential to a successful program.

Health plans should consider improvement strategies that:

• Identify and intervene to improve outcomes for mem-bers with back pain

• Prioritize and strengthen provider networks and rela-tionships

• Ensure the delivery of covered services is clinically indi-cated, therapeutically directed, and medically necessary

• Reduce and eliminate unnecessary care, including inva-sive and costly surgery

• Guide members to more conservative, evidence-based care as clinically indicated

Solutions with the potential for significant ROI include:

• Chiropractic Benefit Management,

• Physical and Occupational Therapy Benefit Manage-ment, and

• Comprehensive Back Pain Management comprised of lifestyle management, decision support, evidenced-based care, guidelines and treatment delivery, utiliza-tion and procedural management, and provider net-work management.

Clinical expertise and efficient, integrated technology sup-port solution success.

Every health plan and employer is unique and should begin with an analysis of existing patterns of use. Contact Health-ways for more information on identifying opportunities to maximize the value of physical medicine benefits.

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References1NIH: National Institute of Arthritis and Musculoskeletal and Skin Diseases, Back Pain Fact Sheet, http://www.nlm.nih.gov/medlineplus/backpain.html.

2Martin, B.I., Deyo, R.A., Mirza, S.K., et al., “Expenditures and Health Status Among Adults With Back and Neck Problems,” JAMA, 2008;299(6):656-664.

3Loeppke R., Taitel, M., Haufle V., Parry, T., et. al., “Health and Productivity as a Business Strategy: A Multiemployer Study,” JOEM, 2009;51:411-428.

4Chou, R., et al., “Diagnosis and Treatment of Low Back Pain: A Joint Clinical Practice Guideline from the American College of Physicians and the Ameri-can Pain Society,” Ann Intern Med, 2007 Oct 2;147(7):478-91

5Choudhry, N., Milstein, A., “Do Chiropractic Physician Services for Treat-ment of Low Back and Neck Pain Improve the Value of Health Benefit Plans?” Mercer Health & Benefits, LLC, 2009.

6NIH: Chiropractic Backgrounder, http://nccam.nih.gov/health/chiropractic/introduction.htm#history.

7Kanodia, A.K., Legedza, A.T.R., Davis, R.B., et al., “Perceived benefit of complementary and alternative medicine (CAM) for back pain: a national survey,” Journal of the American Board of Family Medicine, 2010;23(3):354–362.

8Martin, B.I., Deyo, R.A., Mirza, S.K., et al., “Expenditures and Health Status Among Adults With Back and Neck Problems,” JAMA, 2008;299(6):656-664.

9Choudhry, N., Milstein, A., “Do Chiropractic Physician Services for Treat-ment of Low Back and Neck Pain Improve the Value of Health Benefit Plans?” Mercer Health & Benefits, LLC, 2009.

10The Center for Health Value Innovation, Outcomes-Based Contracting™: The Value-Based Approach for Optimal Health, 2010.

11Agency for Healthcare Research and Quality, U.S. Department of Health & Human Services, based on data in Emergency Department Visits and Inpa-tient Stays Related to Back Problems, 2008. Available at http://www.hcup-us.ahrq.gov/reports/statbriefs/sb105.jsp.

12Richard L. Liliedahl, MD, Michael D. Finch, PhD, David V. Axene, FSA, FCA, MAAA, and Christine M. Goertz, DC, PhD, Cost Of Care For Common Back Pain Conditions Initiated With Chiropractic Doctor Vs Medical Doctor/Doc-tor Of Osteopathy As First Physician: Experience Of One Tennessee-Based General Health Insurer, Journal of Manipulative and Physiological Therapeu-tics, Dec, 2010.

13Carrie D. Mosley, Ilana G. Cohen, DC; and Roy M. Arnold, MD, MHA, Cost-Effectiveness of Chiropractic Care in a Managed Care Setting, The American Journal of Managed Care, Vol II, No. 3, March 1996 P280-282

14Bonnie K. Lind, MS, Phc; William E. Lafferty, MD; Patrick T. Tyree AA; Karen J. Sherman, Ph.D; Richard A. Deyo, MD, MPH, and Daniel C. Cherkin, PhD.The Role of Alternative Medical Providers for the Outpatient Treatment of Insured Patients With Back Pain, Spine, Vol 30, No. 12 P1454-1459

15Brain Grieves, DC, MPH, J. Michael Menke, MA, DC, and Kevin J. Pursel, DC, Cost Minimization Analysis of Low Back Pain Claims Data for Chiropractic Vs Medicine in a Managed Care Organization, Journal of Manipulative and Physiological Therapeutics, Nov/Dec 2009

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Physical Medicine Benefit Management

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