Re-analysis of budget neutrality of the Medicare Chiropractic Services Demonstration

The Medicare Chiropractic Services Demonstration was conducted from 2005 to 2007 in the states of Maine and New Mexico and in selected parts of Illinois, Iowa, and Virginia. The purpose of the demonstration was to evaluate the feasibility and advisability of expanding coverage for chiropractic services under Medicare. Under the demonstration, coverage was expanded to include chiropractic care for neuromusculoskeletal conditions other than vertebral subluxation, and for diagnostic and treatment procedures that fell within chiropractic scope of practice as defined by state laws. The demonstration was analyzed for budget neutrality. A budget neutral demonstration is associated with a level of Medicare payments that do not exceed the amount that would have been paid if the demonstration project had not been conducted. The analysis for budget neutrality compared payments in cohorts of beneficiaries in demonstration sites that were matched to beneficiaries in control sites. An analysis of chiropractic users found a $50 million increase in Medicare payments, and it was therefore reported to Congress that the chiropractic demonstration was not budget neutral. We hypothesize that the design of the budget neutrality study may have been flawed by site selection bias that rendered invalid certain aspects of the analysis. To evaluate for bias, we will re-analyze the study design with regard to selection and matching of demonstration and control sites. To these ends, we will analyze Medicare claims data, utilizing techniques of small area analysis to evaluate chiropractic resource inputs and utilization rates in the demonstration and control sites.