Over the past couple years, a “triple threat” has been slowly, subversively gaining steam and, in the process, formulating an explosive bomb that could easily destroy your practice.  Unfortunately, too many chiropractors have contacted me after facing even one arm of this threat and very unfortunately, there is little ability to protect your practice once this thing detonates. Worse still, as an audit tactic, it is gaining more popularity and, in the process, costing you a lot of money.  And perhaps the very worst news of all, this tactic also has potential to not only cost you thousands of dollars (or tens or hundreds of thousands of dollars), but it can jeopardize your license as well.

This tactic is primarily used by Auto Carriers (ex: Geico, State Farm, Allstate, etc) for Personal Injury Cases, but I have also seen it waged by commercial carriers (ex: Blue Cross, Blue Shield, Aetna, etc) – albeit on a less frequent basis…for now

What exactly is the target or source of trouble? Who or what is this attacker threatening your practice and profits? What kind of danger at hand? 

Good questions.  Here are the answers:


The format may vary but the target is the same: your bottom line and your ability to make a living.   Most specifically, the target is typically aimed at the battle between your Cash/Time of Service discount and your billed or “regular” fees and the war is waged in the name of chiropractic compliance.


Part of the challenge is that their are two aggressors here: one external, one internal.

a) The External Attacker — works for the payers and calls your office posing as a prospective new patient.  They ask a lot of typical questions, including how much it costs to get an adjustment, a massage or perhaps an exam. Since nothing was mentioned about insurance coverage, your staff member presumes that the caller is a cost-conscious cash patient.  And depending on the level of training your staff member has, your office fee policies (and their compliance with state laws & payer contracts), any number of answers can be given that can potentially get you in some major hot water. Once the phony patient has gathered enough evidence against you, they report back to their superiors. A few weeks later a letter from the Special Investigations Unit arrives and the bomb goes off in your hand.  (See DANGER below for specifics).

b) The Internal Attacker — is generally a disgruntled staff member or spouse who is convinced that you are doing something wrong (i.e. not compliant, not ethical, not legal or all the above) and decides to report you to whichever authority they see fit. Typically, they call your state board, but depending on their level of savvy, they may also report you to the payer, the patient or even a federal entity program such as Medicare (who rewards “whistleblowers” for providing evidence of fraud).

THE DANGERS (in no special order)

a) You and Your Money Rapidly Part Ways – when the post-snooping letter arrives, it is generally clear cut.  We called your office, you are charging us a fee higher than everyone else.  We would like to pay the lower fee.  Based on what you have been charging us, our math shows that you owe us $X for this patient.  You can repay that now or we will take it out of your next check.  Oh, and don’t forget the implied threat of it all — we can just do a full-scale investigation, if necessary. You don’t need to be Albert E. to do the math and figure out that if you were charging $60 TOS for a massage and $120 to the payer and you did 10 massages, that equals $600 the payer wants back.  And if they find 10 others like that, there goes $6000.  A virtual gold mine exists if they find more example patients and/or more offensive dates of service.  So, unless you can figure out how to put on your Chiropractic Audit Armor, you can easily see how the zeroes start piling up quickly.

b) Your License is in Jeopardy — unfortunately, both the payer and an internal aggressor are fond of placing your license in danger.  Most state boards are required to investigate every complaint filed against a licensee.  More payers are deciding to simultaneously investigate your case for their own accounting purposes and to conveniently notify your board of your alleged wrongdoings at the same time.  This leads to a whole new level of trouble if the board decides to take your license (how will you repay the insurance now?) or add to your misery with a fine, a program of clinical monitoring and a disciplinary sanction against you.

c)  Your Patients are Notified — To take the disturbing nature of this danger up a notch, there is also the possibility that your patients will be informed of your investigation by the payer or your bad behavior from your staff.   Ask any chiropractor who has had the privilege of their patients contacted by a payer: even if you are 100% innocent, it does not look good to have your patients contacted and put through the American inquisition by XYZ payer’s special investigations unit. Similarly, a “FYI” call from your staff member to the patient warning them of your supposed shenanigans obviously does nothing to build confidence in you and your business practices.

THE PROBLEMS (yes, there are multiple)

1. Time of Service Ambiguity — One major problem that contributes to the dangerous scenarios described above is the fact that the vast majority of states have NO written regulations on the common practice of extending a discount for paying a the time of service.  As a result, there is a massive ambiguity and many differences of opinion on exactly what constitutes a legitimate time of service discount.  In other words, if you extend a discount of 10%, 20% or 30% for those paying at the time of service, is that acceptable? For that matter, how about 50% or 80%?  While many may balk at extremely high discounts, the fact remains that there is also nothing in writing that specifically prohibits it.  On the lower end, nothing is defined as perfectly legal or acceptable either.

2. Improper Billing Practices ARE Clearly Defined — While there may be an absence of guidelines in for fee discounts, most states and/or most payer contracts DO have rules about “improper billing practices.” For example, the Washington State code 246-808-545 on states that: Submitting to any third-party payor a claim for a service or treatment at a greater or an inflated fee or charge than the usual fee the licensee charges for that service or treatment when rendered without third-party reimbursement.” And many states have similar such laws on their books as well.

3. A Gap Still Exists — Notice how this regulation on improper billing does not explicitly mention or forbid a time or service, administrative or bookkeeping discount. Unfortunately, as mentioned above, such a statute also does not set any parameters for the common practice either.  As a result, payers have seen this gap or “grey area” and are attacking the TOS discount by alleging that you are in violation of your state statutes.  And they may be correct — or not.  And so, most chiropractors are left to either attempt to prove their innocence after the fact or to continue on in dangerously ignorant bliss, assuming they are doing everything right.


If this situation is unsettling to you, it should be.  The fact that we can be a phone call away from major, business and life altering disaster is unsettling even for those with nerves of steel, a subscription to High Times magazine or a passport and plane ticket to the Cayman Islands.  If you have already been through such battles (or even some close calls), you have already experienced the definition of “exposed.” So what do we do?

In a nutshell, there is no one magic bullet that will solve all our chiropractic compliance and audit problems, although the Chiropractic Audit Armor service comes close.

But stay tuned — in Part 2, we will discuss some concrete strategies to minimize our risk in face of this Triple Threat.