UPIC / ZPIC Referrals to State Boards, Societies, Surveyors and QIOs

ZPIC referrals

(November 29, 2017): The Medicare and Medicaid programs are managed by the Centers for Medicare and Medicaid Services (CMS). CMS has engaged Unified Program Integrity Contractors (UPICs) and Zone Program Integrity Contractors (ZPICs), among others, to provide program integrity support. In the course of their duties, UPICs and ZPICs may initiate a prepayment review, postpayment audit, suspension or revocation action. These CMS contractors are less known for their referrals to state licensing boards, professional medical societies, state survey agencies and quality improvement organizations. Nevertheless, in recent years, we have seen a significant increase in the number of UPIC / ZPIC referrals to state regulatory enforcement agencies.

This article examines the various directives governing UPIC / ZPICs that are currently generating a significant number of inter-agency referrals.[1]

I. ZPIC Referrals to State Licensing Authorities Due to Improper Conduct:

Over the years, a number of fundamental changes have been made by the Centers for Medicare and Medicaid Services (CMS) to Chapter 4 of the Medicare Program Integrity Manual (MPIM). Many of these changes were designed to facilitate the sharing of adverse case findings between federal and state regulatory agencies.

Pursuant to Chapter 4, Sec. 4.18.2 of the MPIM, ZPICs are required to make a referral to a provider’s state licensure board if it finds that the provider “engaged in unethical or improper practices or unprofessional conduct.” We have handled several cases that resulted from ZPIC referrals to state licensure boards. Situations we have seen where a ZPIC has made a referral to the responsible state licensing authority include:

  • Referral to State Medical Board: Failure to exercise proper level of supervision over a Nurse Practitioner.
  • Referral to State Nursing Board: Performing certain patient care services without the requisite level of physician supervision in place.
  • Referral to State Nursing Board: Inappropriately prescribing controlled substances to one or more patients.

II. ZPIC Referrals to State Licensing Boards Based on Data Mining:

It is important to keep in mind that ZPIC referrals to state licensure boards are not limited to merely those situations where the contractor has alleged that a provider has engaged in improper or unprofessional conduct. We have seen at least one referral based solely on conclusions reached through data mining, where no actual audit of the provider’s medical records had been conducted.

III. ZPIC Referrals to Professional Societies:

Historically, professional societies have only infrequently taken disciplinary actions against their members. When actions have been taken they have often been in response to adverse action taken by state licensure boards. That may no longer be the case in the future. ZPICs are required under Sec. 4.18.2 of the MPIM to refer instances of apparent unethical / improper practices or unprofessional conduct to professional societies for possible disciplinary action.

IV. ZPIC Referrals Based on Evidence of Potential Poor Quality Care or Potential Patient Harm:

Under Chapter 4, Sec., of the MPIM, ZPICs are required to maintain effective lines of communication with other entities. As this section provides:

“The ZPIC shall establish and maintain formal and informal communication with state survey agencies, the OIG, the DOJ, state Medicaid agency, other Medicare contractors, other ZPICs, and other organizations as applicable to determine information that is available and that should be exchanged to enhance program integrity activities.
If the ZPIC identifies a potential quality problem with a provider or practitioner in its area, it shall refer such cases to the appropriate entity, be it the QIO, state medical board, state licensing agency, etc. Any provider-specific information shall be handled as confidential information.”

(emphasis added).

Sec. 4.18.3 of the MPIM further requires that ZPICs make a referral to the Medicare Quality Improvement Organization (QIO) if a situation involves potential patient harm. As the regulations state:

"If potential patient harm is discovered during the course of screening a lead or through the investigation process, the ZPIC shall refer those instances to the QIO, state medical board, or state licensing agency. In addition to making the appropriate referrals, the ZPIC shall notify the COR and IAG BFL within two (2) business days once the potential patient harm issue is discovered.

(emphasis added).

If the ZPIC refers a provider to the State licensing agency or medical society (i.e., those referrals that need immediate response from the State licensing agency), the ZPIC shall also send a copy of the referral to the QIO.

(emphasis added)

V. NBI MEDIC Referrals to State Licensure Boards:

Since 2016, both state and federal authorities have been aggressively reviewing the care and treatment practices of physicians, nurse practitioners, physician assistants, dentists and others who are alleged to have engaged in improper opioid and high-risk drug prescription practices. To accomplish this task, CMS awarded a nationwide contract known as the “National Benefit Integrity Medicare Drug Integrity Contract” (NBI MEDIC) to “Health Integrity, LLC.” As you may recall, Health Integrity also serves as ZPIC for Zone 4.

In its role as NBI MEDIC, Health Integrity is responsible for monitoring and auditing the prescription of opioids under the Medicare Part D program. As in its ZPIC capacity, Health Integrity is required to employ predictive analytics and other investigative tools in order to identify physicians, nurse practitioners and others whose opioid prescriptive practices appear to be aberrant. When this occurs, two actions are normally taken: First, a referral is typically made to the prescriber’s state licensing authorities so that they may conduct a review of the provider’s practices. Second, the NBI MEDIC may make a referral to the responsible ZPIC so that an medical review of the provider’s Medicare claims can be conducted.

VI. ZPIC Referrals to OIG for "Exclusion" Consideration:

More than likely, most of you had no idea that CMS has tasked ZPICs with making referrals of unethical / improper practices or unprofessional conduct to state regulatory bodies and private, professional societies. If that's the case, you will likely find Paul Weidenfeld's article entitled "Is Your Practice Being Audited by a ZPIC? Did You Know it Can Lead to an OIG Exclusion?" fascinating. Believe it or not, CMS requires ZPICs to make appropriate referrals to the Office of Inspector General (OIG) if it believes that "exclusion" action is warranted. Check out Paul's article at www.exclusionscreening.com

VII. Conclusion:

Regrettably, the number of complaints filed with state licensure boards will likely continue to increase as long as CMS contractors are required under the terms of their contract to make referrals for the types of conduct outlined above. If you are facing a board complaint or potential disciplinary action by a professional society, it is essential that you understand the basis for the underlying referral by the UPIC or ZPIC. We have identified a number of instances where the ZPIC basis of referral was either factually incorrect or was based on a flawed interpretation of the data. Your ability to effectively respond to the basis for the referral can greatly impact the ultimate direction of a board action.

ZPIC referrals
Robert W. Liles, JD, MBA, MS, is Managing Partner at the law firm Liles Parker. He represents health care providers around the country in UPIC and ZPIC audits, and State Medical Board and State Nursing Board actions. For a complimentary consultation, please give him a call. He can be reached at: (202) 298-8750.
  • [1] As set out in Chapter 4, Sec. 4.1 of the Medicare Program Integrity Manual (MPIM), all references to ZPICs also apply to Unified Program Integrity Contractors (UPICs).