Effects of Expanded Coverage for Chiropractic Services on Medicare Costs in a CMS Demonstration

Background: Moderately convincing evidence supports the benefits of chiropractic manipulations for low back pain. Its effectiveness in other applications is less well documented, and its cost-effectiveness is not known. These questions led the Centers for Medicaid and Medicare Services (CMS) to conduct a two-year demonstration of expanded Medicare coverage for chiropractic services in the treatment of beneficiaries with neuromusculoskeletal (NMS) conditions affecting the back, limbs, neck, or head. Methods: The demonstration was conducted in 2005–2007 in selected counties of Illinois, Iowa, and Virginia and the entire states of Maine and New Mexico. Medicare claims were compiled for the preceding year and two demonstration years for the demonstration areas and matched comparison areas. The impact of the demonstration was analyzed through multivariate regression analysis with a difference-in-difference framework. Results: Expanded coverage increased Medicare expenditures by $50 million or 28.5% in users of chiropractic services and by $114 million or 10.4% in all patients treated for NMS conditions in demonstration areas during the two-year period. Results varied widely among demonstration areas ranging from increased costs per user of $485 in Northern Illinois and Chicago counties to decreases in costs per user of $59 in New Mexico and $178 in Scott County, Iowa. Conclusion: The demonstration did not assess possible decreases in costs to other insurers, out-of-pocket payments by patients, the need for and costs of pain medications, or longer term clinical benefits such as avoidance of orthopedic surgical procedures beyond the two-year period of the demonstration. It is possible that other payers or beneficiaries saved money during the demonstration while costs to Medicare were increased.