(July 14, 2010): Imagine a Zone Program Integrity Contractor (ZPIC) handing you a claim analysis rife with alleged errors, an indecipherable list of statistical formulae, and an extrapolated recovery demand that will cripple your practice or clinic. What steps should you take to analyze their work? Based on our experience, providers can and should carefully assess the contractor’s actions, use of formulas and application of the RAT-STAT program when selecting a statistical sample and extrapolating the alleged damages based on the sample pulled. Over the years, we have challenged the ZPIC extrapolation of damages conducted by these Medicare contractors, covering tens of thousands of claims. Regardless of whether you are providing Home Health, Physical Therapy, Surgical or other services, it is imperative that you work with experienced legal counsel and statistical experts to analyze the statistical sampling and extrapolation steps taken by the contractor. Should you succeed in invalidating the extrapolation, the whole games changes. The question is – "How can you go about fighting a ZPIC extrapolation calculation of alleged damages?"
One method is to show that the contractor’s auditor failed to identify a Statistically Valid Random Sample (SVRT). Among the first steps is you should take is to retain experienced legal counsel to review the Medicare contractor’s actions. Notably, there are a multitude of legal arguments which may be asserted (depending on the specific facts in your case). Our firm has worked with several outstanding statistical experts over the years, each of which has a proven track record of analyzing the contractor’s actions and identifying any flaws made by the ZPIC when extrapolating damages.
Notably, Section 18.104.22.168 of CMS’ Medicare Program Integrity Manual establishes that the contractor is obligated to fully document the statistical methods an auditor employs:
"The PSC or ZPIC BI [Benefit Integrity] unit or the contractor MR [Medical Review] unit shall identify the source of the random numbers used to select the individual sampling units. The PSC or ZPIC BI unit or the contractor MR unit shall also document the program and its algorithm or table that is used; this documentation becomes part of the record of the sampling and must be available for review." (emphasis added)
"The PSC or ZPIC BI units or the contractor MR units shall document all steps taken in the random selection process exactly as done to ensure that the necessary information is available for anyone attempting to replicate the sample selection." (emphasis added)
ZPIC statisticians must be able show their work to the extent that a reviewer can attempt to "replicate" their actions and determine whether or not the steps taken were consistent with accepted principles and practices of statistical sampling. The failure of a ZPIC statistician to fully and properly document his actions may serve as the basis for seeking to invalidate the extrapolation. The calculation of a valid statistical sample and the extrapolation of damages by ZPIC statistician is a highly complex process. After handling many extrapolated damages cases, we have found that few ZPIC statisticians fully meet their obligations to document the steps taken and / or conduct the process in a proper fashion, consistent with accepted statistical sampling procedures. Should your practice or clinic find that it is facing an extrapolated Medicare audit, it is strongly recommended that you engage qualified, experienced counsel to represent you in the process. Your legal counsel can then engage a qualified statistician to assess the contractor’s actions.
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