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Part 5 of 9: The Hidden Cost of Fragmentation

Updated: 22 hours ago

How Disorganization, Intermediaries, and Outdated Technology Inflate Administrative Burden in Chiropractic and Physical Therapy


A System Built on Redundancy


The fragmentation of chiropractic and physical therapy practices is more than a barrier to reimbursement and profitability—it's a structural inefficiency that drains resources, burdens staff, and compromises patient care.


Thousands of independent clinics across the U.S. are forced to manage redundant administrative tasks because of:

  • Disjointed contracts with third-party intermediaries,

  • Closed or outdated EHR systems,

  • And a lack of shared infrastructure to manage revenue cycle management, prior authorizations, claim submission, and payer communication.


While the clinical outcomes for DCs and PTs are strong, the operational strain of fragmentation is a silent threat—amplifying costs and reducing capacity at scale.


1. Intermediary Networks: A Driver of Operational Chaos


Chiropractors and physical therapists are often contracted through third-party intermediaries, not directly with insurance companies. This introduces administrative complexity without adding clinical value. Providers must:

  • Navigate multiple networks with different requirements,

  • Complete non-standard prior authorization forms,

  • Submit documentation through manual or outdated portals, and

  • Operate without standardized support for core administrative transactions (270/271 eligibility, 835 ERA/EOB remittance).


These differences are not just inconvenient—they are structurally inefficient. Each variation in process must be learned, tracked, and executed independently, inflating overhead and exposing practices to errors and delays.


2. Technology Gaps and EHR Limitations


Most chiropractic and physical therapy clinics use lightweight EHRs. While user-friendly, these systems often:

  • Lack integrated authorization tools,

  • Do not support automated claims management,

  • Do not participate in health information exchanges or qualified health information networks, and thus not supporting automated referrals and feedback loops,

  • Block third-party tools due to closed architectures, and

  • Fail to offer open APIs for interoperability.


In contrast, more advanced platforms offer centralized workflows, payer integrations, interoperability between unaffiliated providers, and automation that drastically reduce manual workload. Without access to these tools, many DC and PT clinics remain trapped in labor-intensive operations.


3. Administrative Duplication Across Thousands of Clinics


In a fragmented environment, every clinic is its own billing department, authorization coordinator, and denial manager. What other sectors centralize, chiropractic and physical therapy clinics repeat thousands of times a week:

Consequence

Impact

Non-standard admin processes

Different requirements per intermediary

Manual workarounds

Increased staffing and human error

High overhead

Redundant labor costs

Delays in care

Authorizations slow treatment

Provider distraction

Time spent on admin over patients

Even within the same city, dozens of independent clinics may be duplicating identical tasks—each submitting the same forms, calling the same payers, and managing the same inefficiencies.


4. Patient Experience Takes the Hit


Administrative complexity doesn’t just affect staff—it impacts patients:

  • Delays in scheduling or treatment due to authorization backlogs

  • Reduced provider availability as staff handle paperwork instead of care

  • Billing errors and denials that disrupt care plans

  • Frustration and lost trust when systems seem inefficient or unfair


As copays and deductibles rise, patient expectations grow. When care is delayed or interrupted by administrative hurdles, satisfaction and outcomes suffer.


5. Systemic Cost: An Avoidable Burden


The financial impact of fragmentation is measurable:

Administrative Task

Time/Week per Clinic

Cost (@$22/hour)

Prior Authorization

2.5 – 5 hours

$55 – $110

Eligibility Verification

2.5 – 4 hours

$55 – $88

Remittance Management

3 – 5 hours

$66 – $110

Staff Coordination

1 – 2 hours

$22 – $44

Total (Weekly)

9 – 16 hours

$198 – $352

Annual Estimate

450 – 800 hours

$10,300 – $18,300

With an estimated 30,000–35,000 chiropractic and PT clinics in the U.S., the system-wide cost of administrative duplication likely exceeds $500 million annually—and that reflects only direct labor, not lost productivity, delayed care, or burnout.


6. Comparative Insight: What Other Sectors Get Right


In other healthcare sectors, large provider groups and clinically integrated networks (CINs) reduce administrative burden by:

  • Centralizing contract and claims management,

  • Standardizing prior authorization processes,

  • Investing in EHR systems with automation and payer integration.


A 2022 Health Affairs study found that U.S. healthcare administrative costs are the highest among developed countries, accounting for nearly 25% of all spending. Groups that adopt shared services and automation reduce administrative overhead by 25–40% per clinic.


7. Conclusion: Administrative Burden is a Structural Problem—And a Solvable One


The administrative challenges facing chiropractors and physical therapists are not inevitable. They are the result of:

  • Disorganized contracting,

  • Intermediary complexity,

  • Technological underinvestment, and

  • A lack of unified infrastructure.


The solution lies in:

  • Collective contracting that replaces fragmented intermediary relationships,

  • EHR modernization with open APIs and automation,

  • And centralized administrative services through clinically integrated networks like Arete.


Reducing administrative burden doesn’t just save time and money—it restores capacity for what matters most: clinical care, patient relationships, and long-term sustainability.

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