Are chiropractic maintenance plans acceptable?

[Guest mmclees]

I have a few employees that are seeking reimbursement for a monthly fee they are paying to their chiropractor for on-going service. I believe it should be reimburseable, they do have a medical condition (chronic back pain) and the chiropractor is treating it as needed. However, when are the services incurred? They may have an adjustment one or thirty times in one month. Would their reimbursement only be eligible at the end of the monthly service period? Or, could it be reimbursed if the documentation attached indicates the monthly fee is billed out on the first serivce of the month? The plan document is not specific to this type of expense. Has anyone else run into one of these? Any advice is greatly appreciated.

thanks!

[GBurns]

Shouldn't your concern be more with when the expense is incurred rather than with "when are the services incurred"? You are reimbursing for the incurred expense not for the srevices.

[Lori Friedman]

mmclees, The general rule is that medical expenses must be "incurred" before they are eligible for reimbursement. In the situation that you've described, however, it may be impossible, or at least extremely impractical, to match health care costs with the actual provision of services.

You've described a payment arrangement that's very common for orthodontic expenses. You might find it helpful to read Chief Counsel Information Letter, 02/17/97, which recognized and discussed the unique nature of this type of payment plan.

[Sandra Pearce]

I've had employees bring this type of arrangement to me for consideration as a medical expense in our health plan. Not with a Chiropractor but with the Internist. One was in Seattle, WA and the other in Houston, TX. The physician offers the patient a monthly fee arrangement which would allow the patient access to the physician's services any time during the period of the arrangement for no additional charge. The monthly fee cannot be associated with a specific treatment or service and therefore cannot be paid by either our health plan or our 125 plan.

[GBurns]

Why does the fee have to be related to a specific treatment or service? Isn't it by its very nature related to the expenses of medical care?

As an analogy, Do you pay a hospital bill by its line items or do you pay by its general nature? Do you reimburse the copay for a Drs visit where there was no diagnosis or treatment of any illness?

Do you allow the pretaxing of the FSA administrative fee? If so, what specific treatment or service is it related to ?

[Mary C]

I have to agree with Sarah and Lori. The comparison to paying a hospital bill by line item is not really valid. We're not looking at line items here but if any services were received and what the dates were. Fed regs do not allow a reimbursement if there are no services and state you can only reimburse based on date of service - not when paid, but when services were received. If I go to the emergency room on 12/28/04 but don't pay for it till billed in January '05, it's still an expense eligible for reimbursement during the '04 year, not '05, and then only those expenses related to medical care (i.e., no TV, phone or personal care item expenses if an inpatient stay).

As Sarah Pearce pointed out, if no services are received - i.e., such as the internist's monthly "retainer" fee, but the participant does not actually see that doc in the month - no reimbursment is allowed. The Chief Counsel Information Letter regarding ortho services warns against reimbursing for everything when initially paid or as paid, and instructs how to spread reimbursement out over the course of treatment as services are received or deemed to be received.

[Guest mmclees]

FYI: The employee will not be billed if there is no service for the month.

Just a note to GBurns:

We have always required the employees to give us the date of service on their claims. Since 99.9% of the time the date of service is the date the medical expense has been incurred. Our SPDs, & Plan Docs use this language: Expenses are treated as having been incurred when the Participant is provided with the medical care that gives rise to the medical expenses, not when the Participant is formally billed or charged for the services or pays for the medical care. The concern I have is they may actually be pre-paying for a service (medical expense) they have not incurred yet. Clearly that is not allowed. I am wondering if the chiropractor invoices with the first service date of the month and ties the monthly amount to it, what would be the consequences there?

[GBurns]

I guess that brings us back to the example regarding Orthodontic expenses.