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Texas ZPIC Audits in Texas are Increasing – Is There a New Sheriff in Town?

Texas ZPIC audits of Medicare providers are increasing.

(March 16, 2010): Health care providers around the country are finding themselves the target of various audits from jurisdictionally overlapping Medicare contractors.  Notably, any of these audits have the potential to destroy a provider’s practice or clinic.  States where PSCs (Program Safeguard Contractors) have transitioned to ZPICs (Zone Program Integrity Contractors) are under extreme pressure. One of those states is Texas. Providers in the Lone Star state are being inundated with requests for documentation from Health Integrity, the ZPIC for Zone 4, which covers Texas, Colorado, New Mexico and Oklahoma. Texas ZPIC activities have steadily increased, both in terms of frequency and scope.  This article provides a brief overview of the program integrity activities that are currently being directed at Medicare providers and suppliers working in Zone 4.  A more detailed summary of the ZPIC’s functions can be found at the link below.

I.  What is the Role of Texas ZPIC Auditors?

Unlike Recovery Audit Contractors (RACS), whose primarily focus is to identify overpayments, or Medicare Comprehensive Error Rate Testing (CERT) audits, reviews aimed at measuring improper payments, ZPIC audits are subjecting providers to both pre–payment and post-payment Medicare audits.  Perhaps most importantly, ZPICs are expected to report suspected fraud to law enforcement.

ZPIC audits in Texas cover claims for everything from psychology E/M services to DME items. The Zone 4 contractor has said the audits are based on what it calls “atypical billing practices.”

II. What Should I Do if I Receive a Letter from a Texas ZPIC Auditor?

Some providers have found the audit response process so burdensome that they have been forced to suspend operations in order to fulfill the requests for documentation.

Generally, health care providers have 30 days from the date on the letter of notification to get the ZPIC the information it has requested. If documentation is insufficient or is not received, the ZPIC will deny the claims and issue and issue an overpayment letter demanding the repayment of funds.  Additionally, in most cases, ZPIC have been seeking extrapolated damages, applying the error rate identified to the universe of claims at issue during the time period audited.

While RACs and CERT auditors only conduct post-payment audits, PSCs and ZPICs are increasingly placing providers on pre-payment review, effectively delaying a provider’s cash flow up to six months (and in some cases even longer).  Although RACs have only been conducting  “automated” reviews to date, providers should expect the number of “complex” reviews to increase in 2010.

ZPICs, CERT reviews, PSCs, and RAC auditors are aggressively reviewing Medicare claims around the country. Should any of these contractors identify possible fraud, they will not hesitate to report’s the provider’s conduct to law enforcement.

Read more about ZPIC

Health care attorneyLiles Parker attorneys and staff have considerable experience representing Medicare providers in connection with an audit by a ZPIC, such as AdvanceMed or Health Integrity (now known as “Qlarent”).  Should you have any questions regarding these issues, don’t hesitate to contact us.  For a complementary consultation, you may call Robert W. Liles or one of our other attorneys at: 1 (800) 475-1906.

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