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ZPIC Audits / UPIC Audits: The Impact of Transmittal 768 on the Medicare Appeals Process Timeline.

Transmittal 768(April 12, 2018): A big concern with the Medicare appeals process is the ghastly backlog at the Office of Medicare Hearings and Appeals (OMHA) for an Administrative Law Judge (ALJ) hearing coupled with the government’s authority to recoup alleged overpayments after the second level of appeal (reconsideration). There is renewed buzz regarding the backlog and potential recourse given the Fifth Circuit’s decision on March 27, 2018 in Family Rehabilitation, Inc. v. Azar, No. 17-11337, which affirmed the possibility for providers to sue for an injunction to prevent Medicare Administrative Contractors (MACs) from recouping overpayments until administrative appeals are concluded under the collateral-claim exception. But what about the snail-like pace of postpayment reviews at the very beginning of this process?  As discussed below, Medicare’s Transmittal 768 may alleviate this continuing problem to some extent.

I.  Continuing Delays by ZPICs / UPICs in Completing an Initial Review – Overview of the Problem:

Before claims are appealable, they have to be denied on review. A major source of massive extrapolated alleged overpayments are postpayment reviews by Zone Program Integrity Contractors (ZPICs) and their successor Unified Program Integrity Contractors (UPICs). Our experience has been that these reviews usually take many months, even years. This is in spite of the fact that providers are required to turn over the requested records in somewhere between 15 and 30 days, maybe even 45 days if the provider requests an extension. The investigators typically remain tight-lipped throughout the review and investigation process. Inquiries about the status of a review are usually met with no response or cryptic feedback like “The review findings will be provided at the conclusion of the review.” In the meantime, providers are expected to sit on their hands. Then one day, a letter arrives which often reflects an unmanageable alleged overpayment figure for the provider and the provider is left to dispute the alleged overpayment through “Medicare’s Byzantine four-stage administrative appeals process” – in the words of Circuit Judge Jerry E. Smith in Family Rehabilitation, Inc. v. Azar.

II.  New Timelines Under Transmittal 768 for ZPICs / UPICs to Complete a Postpayment Review:

There has been a development that may effectuate speedier postpayment reviews by ZPICs and UPICs. The Centers for Medicare and Medicaid Services (CMS) issued guidance, which imposes a new timeline and requirements on these contractors effective March 1, 2018. Specifically, the transmittal adds the following requirements to Chapter 3 of the Medicare Program Integrity Manual:

the UPICs / ZPICs shall complete postpayment medical review and provide the lead investigator with a final summary of the medical review findings that includes reference to the allegations being substantiated/not substantiated by medical review, reasons for denials, and any observations or trends noted within 60 calendar days” and “[t]he counting for the 60-day time period begins when all of the documentation is received by the UPIC / ZPIC contractor.”

Please note, however, that this is an internal timeline for the contractors (as between the medical reviewer(s) and lead investigator), meaning that providers should not expect to receive the postpayment audit results within 60 days of having submitted the records to the UPIC / ZPIC. However, Transmittal 768 may be useful to put pressure on the contractors when reviews are pending for months or years on end.

For a detailed discussion of the ZPIC program and process, please see: ZPIC Audits.

Lorraine Rosado is Experienced Applying Transmittal 768 When Handling ZPIC Audits and UPIC Audits.Lorraine A. Rosado, J.D., is a Senior Associate at Liles Parker and has extensive experience representing Medicare providers and suppliers around the country in administrative claims audits, suspension and revocation cases.  She is also performed a number of IRO reviews in connection with annual CIA reviews by HHS-OIG.  Should you have any questions regarding an administrative enforcement action, please feel free to call Lorraine for a free consultation.  She can be reached at: (202) 298-8750.

Rise of the UPICs – Changes to the Medicare Program Integrity Contractor Landscape are on the Horizon.

UPICs are the newest Program Integrity Contractors.(August 16, 2013): In an effort to streamline the often-confusing audit structure of multiple Medicare and Medicaid contractors (many of which have overlapping responsibilities and jurisdictions), the Centers for Medicare and Medicaid Services (CMS) is reportedly preparing to establish a new consolidated program integrity contractor, to be known as a Unified Program Integrity Contractor (UPIC).  These changes are intended to combine the integrity duties currently undertaken by Zone Program Integrity Contractors (ZPICs) and Medicare Administrative Contractors (MACs).  Notably, MACs will continue to operate but their program integrity responsibilities will be largely transferred over to this new contractor with consolidated auditing duties.

I.  Program Integrity Contractor Duties of the UPIC:

As noted in CMS’ Request for Information (RFI), the Center for Program Integrity (CPI) plans to establish multiple regional UPICs (between five and fifteen).

The UPIC (“the Contractor”) shall work on a wide variety of activities that focus on identifying and reducing fraud, waste, and abuse by individuals and entities furnishing items and services (hereafter, for convenience, referred to as “providers”) under the Medicare and Medicaid programs.  (Page 3). 

II.   Anticipated UPIC Priorities:

The primary priority areas to be pursued by UPICs are anticipated to include cases involving:

  • Patient abuse or harm;

  • Ability to prevent future fraud, waste or abuse by taking administrative actions to remove providers or suppliers from the affected Program, or otherwise prevent inappropriate future payments;

  • Multi-State fraud;

  • High dollar amounts of potential overpayments;

  • Likelihood for an increase in the amount of fraud or enlargement of a pattern, including
    the potential that findings can be used to refine CMS’s anti-fraud prevention efforts and analytic models;

  • Fraud complaints made by Medicare supplemental insurers;

  • Law enforcement requests for assistance that involve court-imposed deadlines;

  • Law enforcement requests for assistance in ongoing investigations that involve interagency initiatives or projects;

  • Law enforcement requests for early administrative actions to prevent or mitigate losses to the affected Program(s); and,

  • Other new elements that may be identified by CMS through technical direction. (Page 5). 

III.  Conclusion: 

On the positive side, the UPIC program is likely to go a long way towards streamlining the audit process and reducing the number of duplicative audit requests received from competing program integrity contractors.  In any event, CMS’ consolidation of these program integrity contractor duties is yet another clear indication that the government intends improve its efficiency in scrutinizing questionable Medicare and Medicaid billings. We strongly encourage all health care providers (not merely those participating in the Medicare and / or Medicaid programs) to develop and implement an effective Compliance Plan and overall Compliance Program.  Participating providers have an obligation to keep up with and follow all applicable statutory and regulatory requirements associated with Medicare and Medicaid services.  Now is the time to conduct a “GAP ANALYSIS” of your current practices so that any needed remedial actions can be taken.

Robert W. Liles, JD, MBA, MS, serves as Managing Partner at Liles Parker, a boutique health law firm representing health care providers around the country in connection with audits, investigations, compliance and transactional health care projects.  For a free consultation regarding your case, please give Robert a call.  He can be reached at:  1 (800) 475-1906.