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High Cumulative Payment Providers are Under the ZPIC Audit Microscope

High Cumulative Payment providers are being targeted by ZPICs.

(December 27, 2013):  From 2008 through 2011, approximately 2% of clinicians were responsible for almost one quarter of all Medicare Part B payments, with annual payments of more than $500,000 per clinician. As the Department of Health and Human Services Office of Inspector General (OIG) has noted in a recent report, efforts by high cumulative payment providers to remain compliant can go a long way towards helping to improve Medicare’s program integrity efforts. Not surprisingly, this analytic measurement has been carefully evaluated by Zone Program Integrity Contractors (ZPICs), Recovery Audit Contractors (RACs), Medicare Administrative Contractors (MACs) and other “specialty” contractors (such as Strategic Health Solutions) working for the Centers for Medicare and Medicare Services.

I.  Reviewing “High Cumulative Payment” Providers:

The OIG recently conducted a review of clinicians generating high cumulative payments for Medicare Part B services from CY 2008 to CY 2011.  For this review, the agency defined the term “high cumulative payments” as total payments of more than $3 million for Part B services furnished by an individual physician.  Notably, in these years, both the number of Medicare Part B clinicians generating these high cumulative payments and the total dollar amount of those payments increased almost 78 percent.

The objectives of the review were twofold. First, OIG wanted to determine how many individual clinicians who were responsible for high cumulative payments were reviewed by ZPICs and MACs to identify potential improper claims submitted to Medicare for payment.  Second, the agency set out to determine the outcomes of these reviews; for instance, whether the Medicare contractors were performing audits of these clinicians and whether overpayments or underpayments had been identified in those audits.

II.  High Cumulative Payment Providers Deserve Greater Scrutiny:

As set out in OIG’s study, 303 clinicians provided more than $3 million in Medicare Part B services during CY 2009 and collected more than $1.3 billion in Medicare payments.  Of these physicians, one-third of them had already been selected for improper payment review audits by MACs and ZPICs.  These focused audits resulted in $34 million in total overpayments identified by the end of CY 2011.  Moreover, three of these clinicians had their medical licenses suspended and two were indicted.

The report also noted that just three medical specialties dominated the list of clinicians generating high cumulative payments.  Notably, the following specialties accounted for roughly 75% of all high cumulative payment providers:

  • Internal medicine — 55%.
  • Radiation oncology — 12%.
  • Ophthalmology — 11 %.

Notably, OIG also found that high cumulative payment providers were concentrated in a handful of states.  These states included:

  • Florida — 28%.
  • California — 8%.
  • New Jersey — 7%.
  • Texas — 7%.
  • New York — 6%.
  • Illinois — 6%.

III.  Recommendations from OIG:

Improper payments can result from numerous circumstances; for example, mistakes such as incorrectly coded claims (errors) as well as intentional deception such as billing for services not provided (fraud). The agency recognized that existing procedures were able to identify some of these clinicians for review; however, it also noted that the procedures were not designed to specifically identify all clinicians whose payments exceeded a certain threshold. Moreover, current procedures may not always identify those physicians responsible for high cumulative payments in a timely manner. In its report, HHS-OIG made two recommendations to CMS:

  1. Establish a cumulative payment threshold above which a provider’s claims would be selected for review.  For this threshold, CMS should consider both costs and potential program integrity benefits; and
  2. Implement a procedure for timely identification and review of provider’s claims that exceed the cumulative payment threshold.

Nevertheless, HHS-OIG acknowledged that the results of the study demonstrate that identifying clinicians generating high cumulative payments can be a useful as a targeting tool and can assist law enforcement, ZPICs and other CMS contractors in their efforts to identify improper payments.

IV.  CMS’s Responses to the OIG Study:

High cumulative payments are not necessarily indicative of improper payments or fraud. However, in CMS’s response to the report, CMS Administrator Marilyn Tavenner agreed that reviewing claims from providers with high cumulative payments can, in fact, serve as a valuable screening tool.  Moreover, she acknowledged that this measurement is one of many factors MACs currently consider when deciding to place a provider or supplier on manual medical review.

In response to the report, the agency partially concurred with both OIG recommendations.  Ms. Tavenner agreed that CMS would work with Medicare contractors to research and develop an appropriate cumulative payment threshold that considers costs and potential benefits when determining which claims and providers should be selected for review. CMS would also consider other factors, including service type and provider specialty, in developing any thresholds. Ms. Tavenner also stated that CMS would develop a process for the timely identification and review of clinicians’ claims that exceeded the cumulative payment threshold on the basis of the results of its research and the HHS-OIG review. She recognized that reviewing claims from providers with high cumulative payments could be a valuable screening tool and would ensure that it would be one of many factors MACs consider when deciding to place a provider or supplier on manual medical review.

V.  Final Remarks:

While physicians collecting more than $3 million a year from treating Medicare patients are not necessarily abusing the program, these clinicians are an object for targeted audits by Medicare providers. Because their proportion of total Medicare spending has been growing in recent years, these clinicians will continue to receive greater scrutiny.

While there is no clear-cut way to avoid being audited, providers associated with high cumulative payments can take concrete steps in your practice today to reduce the risk that a federal or state audit of your Medicare claims will find that you have been wrongfully overpaid for the Medicare services you and your staff have been providing (and are continuing to provide).  An effective compliance program is one such step. Call us to discuss how we can assist you with your compliance efforts.

Healthcare LawyerRobert W. Liles, Esq., serves as Managing Partner at the health law firm, Liles Parker, Attorneys & Counselors at Law.  With offices in Washington DC, Houston TX, McAllen TX and Baton Rouge LA, Liles Parker attorneys  represent health care providers around the country in connection with ZPIC audits, RAC audits, prepayment reviews, postpayment audits, suspension actions and Medicare revocation proceedings.  Is your practice being audited?  Call Robert for a free consultation.  1 (800) 475-1906. 

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