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We Defend Healthcare Providers Nationwide in Audits & Investigations

ZPIC Home Health Audits are Slated for the Future.

November 19, 2012 by  
Filed under Home Health & Hospice

(November 19, 2012): Zone Program Integrity Contractors, better known also as “ZPICs,” are continuing to focus on home health agencies (HHAs), hospice providers, and DME companies as the subject of their Medicare audits. Based on input from both the Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS), ZPIC audits have expanded in both scope and intensity. In particular, ZPIC audits have been focused on HHAs in Texas, Oklahoma, Louisiana, and Florida.

I.  The OIG’s 2013 Workplan Lists Home Health Services as a Continuing Concern:

With the recent release of OIG’s 2013 Workplan, which reinforced that HHAs and hospice providers continued to be subject to intense government scrutiny, expect that ZPIC audits will increase among these industries. It has been our experience that ZPIC audits closely follow the identified target areas in OIG’s annual Workplans, and this year will be no exception. Each year, OIG, the Department of Justice (DOJ), CMS, and CMS contractors receive more funding to tackle Medicare fraud, waste, and abuse, and this translates to increased enforcement efforts across the board, including ZPIC audits. Remember that ZPIC audits and other recovery actions are money-makers for the government; in one estimate, the government made 1 dollar for every 19 cents it spent on healthcare fraud enforcement and recovery. Multiply this by several million and you’ll see that these audit programs will only continue to expand, as they produce great returns for the federal government. 

II.  Primary Problems Areas Identified in ZPIC Home Health Audits: Do ZPIC Audits Reveal?

ZPIC home health audits generally reveal two distinct problems: that patients are not home-bound and/or the services provided were not skilled services, and were therefore not medically necessary. While our attorneys have had tremendous success in overturning denials of these reasons, providers should proactively review and update their documentation practices to reduce the risk of claims denials in the first place. While ZPIC auditors excel at identifying reasons for denial, excellent documentation can prevent even the pickiest auditor from denying a medically necessary claim.

Homebound denials are common when patients still have some ability to ambulate.  ZPICs interpret the relevant home-bound provisions to require that patients never leave their homes and are generally unable to get out of bed. However, the rules don’t state this, instead recognizing home-bound status as requiring patients to have a “considerable and taxing effort” to leave the home. Congress has specifically stated that attempts by home-bound patients to live a normal life (going to church, visiting family) that are rare or infrequent should not be penalized in non-coverage of claims.  As a result, ALJs have been receptive to our attorneys’ arguments about the home-bound status of the patients of our HHA clients.

ZPIC auditors also deny claims based on lack of skilled nursing services. This applies especially to instances of medication management, healthcare education, and diabetes care issues. Often times, ZPIC audits apply an extremely strict standard to what is or is not skilled care, and this is where appropriate documentation can make all the difference in the world. There is no doubt that the nurses of most HHAs are providing a comprehensive and medically necessary set of services for their clients that go beyond simply making sure the patient is taking their vitamins. The problem, though, is that this information is not effectively captured. It is important for HHAs to ensure their nurses are appropriately trained on the documentation requirements in various Medicare jurisdictions.

III. Final Remarks:

Whether it is documentation review and training before a ZPIC audit, or representation in appealing ZPIC audit denials, Liles Parker attorneys have the skills and understanding to provide effective assistance to HHAs and other healthcare providers facing this challenge.

Robert Liles defends home health agencies in connection with ZPIC home health audits.Robert Liles is the managing member of Liles Parker PLLC, based out of our Washington, D.C. office. Robert has extensive experience handling ZPIC audits, compliance program reviews, internal audits, Medicare and Medicaid overpayment appeals, and other health care compliance projects. Should you have any questions, please feel free to call Robert today for a complimentary initial consultation at 1-800-475-1906.

Seven Elements of a Payable Claim are an Essential Tool When Preparing for a ZPIC Audit

(September 21, 2012):  Each year, our attorneys and paralegals review and assess literally thousands of Medicare claims which have been audited (and denied) by Zone Program Integrity Contractors (ZPICs) and other contractors working for the Centers for Medicare and Medicaid Services (CMS).  As intensive ZPIC audits continue, it is essential that health care providers review their processes to better ensure that services provided fully comply with applicable coverage, coding and billing requirements.  While defending physicians and other health care providers in ZPIC audits and government reviews, we have identified a relatively straight-forward approach for determining whether a particular claim qualifies for coverage and payment.  Generally, we refer to this approach as an examination of the Seven Elements of a Payable Claim.Notably, this has proven to be extremely helpful tool when developing an effective Compliance Plan for a client.  As set out below, physicians and other non-hospital health care providers can often use this approach to determine whether specific services billed to Medicare, Medicaid, and/or private payors should be paid.

I.  Seven Elements of a Payable Claim:

A discussion of the seven elements which must be carefully assessed for each and every claim is provided below:

Element #1: Medical Necessity — In addressing this element, a treating health care provider should ask the following question: Were the services administered medically necessary?”

When considering this question, it is important to keep in mind that the medical necessity is essentially a “standalone” determination, separate from each of the other elements.  In other words, a physician may find that a specific course of treatment is medically necessary in light of a patient’s clinical profile and needs.  Nevertheless, just because a certain treatment regime is medically necessary does not mean that it will be covered by one or more payors.  Over the years, we have seen numerous instances where a physician determined that a course of treatment was medically necessary but it was not covered by Medicare, Medicaid, or a private payor plan.

We believe that this element constitutes the most important question to be answered by a provider.  Services which are not medically necessary should never be performed.  However, a provider may choose to provide medically necessary services regardless of whether he or she anticipates a payor to find that the care qualifies for coverage and payment.

Element #2: Services Were Provided The second issue addressed is whether the services at issue were actually provided.

As you can imagine, regardless of the fact that services ordered were medically necessary, the services must actually be administered in order for those services to be billed and paid.  Absent clear, unambiguous evidence that services were provided, they should not be submitted for reimbursement.  Equally important, services must actually be provided at a level of quality consistent with Medicare’s expectations or the expectations of the covering payor.

Element #3 No Statutory Violations Are the services “tainted” by any statutory or regulatory violation, such as the Stark Law, federal Anti-Kickback or a False Claims Act violation?

When examining whether a claim is “payable,” you need to remember that even though the medical service at issue may have been medically necessary and qualified for payment, if it is the result of an illegal activity, it will be tainted and will likely not qualify for payment.  Therefore, when you are reviewing a service or claim, you must consider whether there is any indication of possible statutory or regulatory violations.  For instance, is there any evidence that the service or claim is linked in any way to a breach of the federal Anti-Kickback Statute or Stark’s prohibition against improper self-referrals?  Similarly, is the service or claim associated with a possible violation of the civil False Claims Act?  The bottom line is fairly straight-forward: it is insufficient to merely show that a claim appears to meet the payor’s basic billing rules.  Rather, a broad view of the service or claim should be made to better ensure that it is not otherwise non-payable due to a statutory breach.

Element #4:  Meets all Coverage Rules – Do the services meet Medicare’s coverage requirements?

The next point to be addressed when auditing a claim is to determine whether or not it is covered under a payor’s plan.  It is important to keep in mind that a service or claim can be medically necessary yet still not qualify for coverage and payment.   Ultimately, every service or claim, regardless of whether the beneficiary is a Medicare, Medicaid, or private plan participant, must be examined to see if it qualifies for coverage.

In making coverage determinations, CMS has interpreted the phrase reasonable and necessary to reflect that the item or service in question is safe and effective and not experimental or investigational.[1]  CMS stated that the relevant tests for applying these terms are whether the item or service has been proven safe and effective based on authoritative evidence, or alternatively, whether the item or service is generally accepted in the medical community as safe and effective for the condition for which it is used.[2]  A device is investigational if it has not been approved by the Food and Drug Administration (FDA) through a premarket approval process or the “510(k) certification process.”[3]  Additional guidance to be reviewed includes any applicable National Coverage Determination rules, and any relevant Local Coverage Determination provisions:

National Coverage Determination Rules (NCDs):  In its most general form, the Secretary of the U.S. Department of Health and Human Services (HHS) may articulate “reasonable and necessary” standards through formal regulations that have the force and effect of law throughout the administrative process.[4]  More specifically, the Secretary may publish a formal administrative ruling in the Federal Register setting forth how Medicare statutes and regulations are to be applied in particular circumstances.[5]  These regulations and administrative rulings are binding at all stages of the administrative process.[6]  The first type of formal regulations are publications known as National Coverage Determinations (NCDs).[7]  NCDs are national policy statements that grant, limit, or exclude Medicare coverage for a particular item or service and apply nationally to all Medicare beneficiaries who meet the criteria for coverage.[8]  More precisely, NCDs are determination[s] by the Secretary with respect to whether or not a particular item is covered nationally by Medicare.[9]  NCDs conditions for which a service is considered to be covered (or not covered) and are usually issued as a program instruction.[10]  NCDs are often published detailing how a particular patient population may or may not receive Medicare reimbursement for a covered item or service.[11]  Thus, NCDs relate only to issues of coverage.  NCDs do not reflect a determination of the amount of payment made for a particular item or service.[12]  Moreover, any interested party, including beneficiaries, may make an external request for a new NCD.[13]  Most of these external requests, however, are made by organizations such as drug, device, or medical product manufacturers or by professional medical organizations, providers, or suppliers.[14]  In addition, CMS may make its own internal request if it determines that an NCD is “in the interest of the general health and safety of Medicare beneficiaries.”[15]   Importantly, because of the judicial deference given to the Secretary in making his or her coverage determinations, all requirements set forth within an NCD are binding on coverage determinations made by Medicare Administrative Contractors (MACs) and Administrative Law Judges (ALJs) during the appeals process.[16]  Finally, the Secretary may further define when and under what circumstances services may be covered (or not covered) under the reasonable and necessary standard through coverage provisions in interpretive manuals.[17] Manual instructions are often issued in the form of program memoranda, such as the “Medicare Program Integrity Manual.”

Local Coverage Determinations  (LCDs) The Secretary of HHS may also delegate its responsibilities, under section 1395y (a), to Medicare contractors.[18]  Therefore, in the absence of an NCD, MACs are responsible for promulgating their own reasonable and necessary coverage determinations.[19]  These determinations are published as Local Coverage Determinations (LCDs).  LCDs are defined as determination[s] by a [contractor] under. . . part B. . . respecting whether or not a particular item or service is covered. . . in accordance with section 1395y(a)(1)(A).”[20]  MACs make these coverage determinations by applying the Act and federal regulations, as well as additional guidance provided by CMS in the form of Rulings, Medical Manual Provisions, and other forms of guidance.[21]  In fact, the vast majority of coverage decisions are made at the local level by clinicians who work with the MACs during the claims review process.[22]  CMS’ Medicare Program Integrity Manual (PIM) outlines how LCDs are to be promulgated.  Each LCD must reflect local medical practice within the contractor’s jurisdiction and must be supported by substantial medical evidence.[23]  MACs develop LCDs by considering medical literature, the advice of medical societies and consultants, public comments, and comments from the Medicare provider community.[24]  Like NCDs, an LCD’s coverage guidance on whether an item is medically “reasonable and necessary” means that the item is safe and effective and not experimental or investigational as determined by the FDA approval process.[25]  The contractor must also ensure that LCDs are consistent with the Medicare statute, regulations, NCDs, and other applicable federal guidance.[26]  The PIM also requires that contractors engage in a notice and comment process before publishing coverage policies.[27]  Unlike NCDs, ALJs and the Medicare Appeals Council (Appeals Council)—not to be confused with the Medicare Administrative Contractor (MAC)—are not bound by LCDs or CMS program guidance, such as program memoranda and manual instructions.[28]  However, they will give substantial deference to these policies if they are applicable to a particular case.[29]  This deference is due to interpretations that arise under a complex and highly technical regulatory program,” where even “the identification and classification of relevant criteria necessarily require significant expertise, and entail the exercise of judgment grounded in policy concerns.”[30]  If either an ALJ or the Appeals Council declines to follow a policy in a particular case, the ALJ and/or Appeals Council decision must explain the reasons why the policy was not followed.[31]  An ALJ or Appeals Council decision to disregard that policy applies only to the specific claim being considered and does not have precedential effect.[32]  Furthermore, an LCD made by one MAC is not binding on the other Medicare contractors across the country.[33]  The Secretary of HHS is also responsible for overseeing the evaluation of new LCDs to determine whether they should be adopted nationally and to what extent can consistency be achieved among LCDs.[34]  Because LCDs are established by each individual MACs, variances between LCDs are common.  Notably, while assessing common coverage and documentation requirements from one region to another, we have found that the differences between one LCD and another can be significant.  Finally, if there is no NCD or LCD in place, contractors may make individual claim determinations,” including whether a particular item or service meets the statutory requirement of being reasonable and necessary”.[35]

Challenging NCDs and LCDs:  When a beneficiary is confronted with a denied claim and wishes to challenge that denial, the beneficiary has the option of pursuing review through the claims appeal process, seeking review of the applicable LCD or NCD, or both.[36]  However, any challenge to an NCD or LCD is distinct from the general Medicare claims appeal process set forth in 42 U.S.C. § 405(g).[37]  In fact, challenging these determinations permits an aggrieved beneficiary to seek review of an entire policy or provision rather than just a specific claim denial.[38]  Nevertheless, when the LCD review process was created, the existing claims appeal procedures remained unaltered.  As a result, a beneficiary who wishes to challenge an NCD or LCD still has access to a de novo review by ALJ or to federal district court review, if necessary.[39]  When challenging an NCD or LCD, ALJs and the Appeals Council are responsible for reviewing the reasonableness of these determinations under certain guidance.  In determining whether LCDs or NCDs are valid, the adjudicator must uphold a challenged policy (or a provision or provisions of a challenged policy) if the findings of fact, interpretations of law, and applications of fact to law by the contractor or CMS are reasonable based on the LCD or NCD record and the relevant record developed before the ALJ or the Appeals Council.[40]  As previously indicated, NCDs are determinations promulgated by the Secretary and are therefore given substantial deference when challenged.  Nevertheless, the administrative appeals process affords this same level of deference to LCDs, despite the fact that these determinations are published by independent, private MACs.  42 C.F.R. § 405.1062(a) affirms that ALJs and the Appeals Council are not bound by LCDs or CMS program guidance, such as program memoranda and manual instructions but will also give substantial deference to these policies if they are applicable to a particular case.  In doing so, the ALJs or the Appeals Council must apply the same “reasonableness standard” when conducting a challenge to an LCD as it does to an NCD.[41]  What exactly constitutes a “reasonableness standard”?  In Subject: NCD Complaint—Intraocular Lens (CMS Ruling 05-01),[42] the Appeals Council acknowledged a complaint challenging an NCD that barred coverage of presbyopia-correcting intraocular lenses (PC-IOL) inserted after cataract surgery.  After reviewing the NCD Record and the challenger’s contentions, the Board upheld the validity of the NCD.[43]  The Board outlined its standard of review for an NCD appeal and acknowledged that Section 1869(f)(1)(A)(iii)(I) of the Act limited its review of an NCD “to evaluat[ing] the reasonableness” of the NCD.[44]  Section 1869(f)(1)(A)(iii)(III) also provides that the Board “shall defer only to the reasonable findings of fact, reasonable interpretations of law, and reasonable applications of fact to law by the Secretary.”[45]  The Board recognized that this reasonableness standard required it to uphold the challenged NCD “if the findings of fact, interpretations of law, and applications of fact to law” by CMS are reasonable based on the NCD record and the relevant record developed before it.[46]  The Board also noted that federal regulations provide a two-stage process for reviewing a challenged NCD.  First, if it found the NCD record to be complete and adequate to support the validity of the NCD, it would issue a decision to uphold the NCD.  This would effectively end its review process.  On the other hand, if the Board found that the NCD record was incomplete and inadequate to support the validity of the challenged NCD, it would conduct a review process that permitted discovery and evidence submission, as well as a formal hearing, if necessary.[47]  “Policy Articles” are closely related to LCDs, though they are distinct documents.  While LCDs contain only the reasonable and necessary language, Policy Articles contain any non-reasonable and necessary language a Medicare contractor wishes to communicate to providers.  These Articles essentially provide additional details for coverage requirements and reimbursement procedures.  And while Policy Articles are not LCDs, the Appeals Council has recognized a “long-standing practice to afford some deference” to these articles published by the MACs.[48]  Ultimately, while challenges to the specific claims denials and challenges to the various coverage determinations follow different administrative appeals processes, the adjudicatory entities all afford the Secretary’s decisions substantial deference due to the complex nature of the Medicare program.  As a result, beneficiaries have a significant hurdle in trying to overturn any adverse decision.

          To be clear, there is no “silver bullet” that can be used by a health care provider to avoid the scrutiny of contractors and law enforcement.  Every small- and mid-sized provider should expect to be audited.  Rather than wait for such an eventuality, your organization should affirmatively review its operations, coding, and billing practices to ensure that its practices fall within the rules.

Element #5Full and Complete Documentation – Have the services rendered been properly and fully documented?

It is essential that you pull each and every regulatory issuance, along with any guidance issued by the state which sets out the documentation requirements associated with a particular service or claim.  After auditing literally thousands of claims, we have found that over a majority of the health care providers we have audited have never fully researched and reviewed applicable  documentation requirements.  As clinical reviewers of both Medicare and Medicaid, Recovery Audit Contractors (RACs) and ZPICs are quick to states in hearings before an Administrative Law Judge, “If it isn’t documented, it didn’t happen.”   When made during a hearing by a RAC or ZPIC, this point is quite effective—it is extremely difficult for a provider to prove that a service was provided if there is insufficient documentation of the work conducted in the patient’s medical records.  Therefore, research, review, and confirm the precise documentation requirements to be met, then ensure that you take the time to fully and accurately document the work you have performed.

ZPIC auditors are excellent at identifying one or more ways in which your claims do not meet applicable coverage requirements.  While you may very well disagree with their assessments, especially in “medical necessity” determinations (when you file a request for redetermination appeal and later, a request for reconsideration appeal), you will find that your MAC and your Qualified Independent Contractor (QIC) agree with the ZPIC’s denial decision.  Rather than endure significant costs and stress when defending against an overpayment assessment, you need to take steps to avoid a denial in the first place.  To that end, health care providers should ensure that clinical staff members are fully trained and educated regarding Medicare’s documentation, coding, and billing processes.

We recognize that “perfect documentation” is neither required nor realistic to expect from your clinical staff.  Nevertheless, using published reports of other cases, you can show your clinicians that ZPICs  enforce a strict application of Medicare’s documentation and coverage requirements.  Through education and training, your clinical staff will understand why it is imperative that they review, understand and comply with:

  • Any applicable National Coverage Determinations (NCDs).
  • Any applicable Local Coverage Determinations (LCDs).
  • Any Local Medical Review Policies (LMRPs).
  • The Medicare Policy Benefit Manual (MPBM).
  • The Medicare Program Integrity Manual (MPIM).
  • Any statutory provisions which cover the services.
  • Finally, any additional relevant guidance issued by Medicare which relates to the services at issue must also be carefully reviewed.

Element #6: Proper Coding – Were the services rendered correctly coded?

Unfortunately, even if the foregoing rules have been met, it is quite simple to make a coding mistake, therefore invalidating the claim.  The coding rules are both complicated and dynamic, potentially changing from year to year.  We recommend that you either engage a qualified third-party billing company to assist you with coding and billing or ensure that your in-house staff members handling these duties are experienced and provided regular opportunities for updated training.

Element #7: Proper Billing Practices – Were the services rendered correctly billed to Medicare?

As a final requirement, health care providers must ensure that the services or claims performed fully meet Medicaid and Medicare’s billing rules.  Once again, you need to ensure that your staff is properly trained to handle the organization’s billing responsibilities. As you review your billing practices, you should abide by the following:  First, “If it doesn’t belong to you, give it back.”  Conversely, “If you don’t owe the money, don’t automatically throw in the towel.”  One of the attorneys in our firm is regularly asked to speak at provider conventions around the country.  For years, we have told health care providers If it doesn’t belong to you, give it back.”  This simple concept covers a lot of ground when it comes to Medicare overpayments and is the single best policy you can employ as a good, compliant corporate citizen.

In summary, in order to qualify for payment, a claim must meet each of the seven components set out above.

II.     Handling Deficiencies:

The likelihood that your practice or organization will be subjected to a Medicare or Medicaid audit is increasing every day.  As a participating provider in one or more federal health care programs, you have an affirmative obligation to ensure that your claims are properly provided, documented, coded, and billed.  Unfortunately, many health care providers have never researched and reviewed the proper rules covering the care and treatment services they provide.  When conducting a “gap analysis” of your organization, a sample of your claims is an important proactive step you can take to help ensure that your current practices are fully compliant with applicable laws and regulations; such analyses do not have to be statistically significant.  Should you identify deficiencies, remedial steps should be taken (immediately) so that future claims for care and treatment will meet all applicable requirements.  Keep in mind—any identified overpayments must be repaid promptly to the government in order to avoid possible False Claims Act liability.

III.    Final Thoughts:

We strongly recommend that you foster a corporate culture which encourages coding and billing compliance.  ZPICs and RACs have increased their audit activities dramatically in numerous areas of the country.  Your organization’s compliance with federal and state regulations, coupled with a consistent message to your employees, is essential. Establishing good intake and records management procedures, and continuing employee education and training efforts, can greatly facilitate the adoption of an ethical, compliant corporate culture.

Robert W. Liles defends health care providers in Medicare auditsRobert W. Liles represents health care providers in Medicare post-payment audits and appeals, and similar appeals under Medicaid. In addition, Robert counsels clients on regulatory compliance issues, performs gap analyses, conducts internal reviews, and trains healthcare professionals on various legal and compliance issues. For a free consultation, call Robert today at 1 (800) 475-1906.

[1] 54 Fed. Reg. 4302-02 at 4304 (Jan. 30, 1989) and United States ex. rel. Colquitt v. Abbott Laboratories, 2012 WL 1081453, 29 (N. D. Tex. March 30, 2012); 42 C.F.R. § 411.15(o).

[2] 60 Fed. Reg. 48417-01 (Sept. 19, 1995).

[3] Under the § 510(k) certification process, a manufacturer must submit to the FDA a premarket notification submission, commonly known as a 510(k) notice, before a device may be introduced into interstate commerce.  21 U.S.C. § 360(k); 21 C.F.R. § 807.81 (2010).  The 510(k) notice must include, among other things, proposed labeling sufficient to describe the device, its intended use, and the directions for its use; a statement indicating the device is similar to or different from other products of comparable type in commercial distribution; and a statement that the submitter believes, to the best of the submitter’s knowledge, that all information in the 510(k) notice is truthful and accurate, and that no material fact has been omitted.  21 C.F.R. § 807.87(e)-(h), (k).

Along with the 510(k) notice, a manufacturer must submit a “510(k) summary,” which “shall be in sufficient detail to provide an understanding of the basis for a determination of substantial equivalence [to previously cleared devices].”  Id. § 807.92(a).  Among the information that must be contained in a 510(k) summary is “[a] description of the device …, including … the significant physical and performance characteristics of the device, such as device design, material used, and physical properties.”  Id. § 807.92(a)(4).  The 510(k) summary must also include “[a] statement of the intended use of the device … including a general description of the diseases or conditions that the device will diagnose, treat, prevent, cure, or mitigate.” Id. § 807.92(a)(5).

[4] Willowood of Great Barrington, Inc. v. Sebelius, 638 F.Supp. 2d 98, 105 (D. Mass. 2009); 42 U.S.C. §§ 1395ff(a)(1), 1395hh.

[5] 42 C.F.R. § 401.108.

[6] 42 C.F.R. §§ 401.108(c), 405.1063.

[7] 42 U.S.C.

Choosing the Right ZPIC Audit Appeals Attorney: Who is Best for You?

An experienced ZPIC Audit Appeals Attorney Can Assist You With Your Audit.(July 19, 2012): Choosing the right ZPIC audit appeals attorney to represent your practice  is possibly the most important step you can take to protecting your rights during the ZPIC audit and appeals process. Indeed, who your representative is in ZPIC cases can make all the difference in the world. It is not enough to choose an attorney who is experienced. Instead, you should consider retaining an attorney who is experienced in this specific area of the law, and has the proven skills, talent, and expertise it takes to successfully argue for coverage and payment.

While many attorneys and consultants may say that they are experts in this area, have they been before Administrative Law Judges (ALJs) in all 4 of the Office for Medicare Hearings and Appeals (OMHA) field offices? Do they consistently file appeals or defend against appeals filed with the Medicare Appeals Council? Do they know the Medicare appeals process forward and back, and the nuances and expected outcome of each? These are just some things to keep in mind when asking an attorney whether they are really the right fit for you and your practice.

I.  How Can a ZPIC Audit Appeals Attorney Help With Your Case?

Unfortunately, many ZPIC audit appeals end up as “bet-the-farm” litigation, meaning that either the provider wins, and stays in business, or if the provider loses, the alleged overpayment found by the ZPIC is so huge that they are forced to shut their business down. As part of this, you should ensure that your attorney is comfortable with understanding and arguing against complex statistical extrapolations, which ZPICs use to greatly increase the alleged overpayment in most cases. Also be sure to ask your attorney whether they consistently work with statistical consultants who are recognized experts in their field, and consistently qualify as experts before ALJs.

II.  Final Remarks:

Finally, make sure that you choose an attorney who is well-versed in the variety of legal arguments that providers often rely upon to reduce or eliminate their overpayment liability. There are a number of statutory waivers, as well as due process considerations, that can be critical to convincing a judge or the Medicare Appeals Council that you should not have to pay an overpayment. Only a ZPIC audit appeals attorney with a significant degree of know-how in this regard will be in an appropriate position to advise you about these options.

Again, think carefully when retaining a ZPIC audit appeals attorney – it can be the biggest decision you make.

ZPIC Audit Appeals AttorneyRobert Liles represents providers in Medicare post-payment audits and appeals, and similar appeals under Medicaid. In addition, Robert counsels clients on regulatory compliance issues, performs GAP analyses and internal reviews, and trains healthcare professionals on various legal issues. For a free consultation, call Robert today at 1 (800) 475-1906.


Healthcare Data Mining Audits: Impact on Medicare Providers and Suppliers

(June 27, 2012):  Healthcare data mining has become quite routine.  For instance, in a recent case involving a Missouri psychologist, the provider was indicted and arrested on two counts of healthcare fraud and forgery. At the heart of this case was the fact that the psychologist allegedly submitted claims to Medicare and Medicaid that were virtually impossible for a single individual to perform. In fact, the indictment stated that the physician worked every day except for Christmas from mid-2008 to early 2012, when he was arrested. In other words, he worked three and a half years straight, seven days a week, with only four Christmases away from the practice. Obviously, this data raised a few red flags for Medicare fraud fighters. As both interest and concern in the provision of national health care has risen, the current administration has aggressively pursued fraudsters who have improperly billed Medicare, Medicaid and private health plan payors. Not surprisingly, additional funding has accompanied these increased investigative and prosecutorial efforts.

As the government has increased its pressure on fraudulent providers, both law enforcement organizations such as the Department of Health and Human Services, Office of Inspector General (HHS-OIG) and contractors of the Centers for Medicare & Medicaid Services (CMS) have become increasingly adept at identifying and pursuing fraudulent and / or potentially fraudulent billing activities by abusive health care providers.

I.     How is the Government Using Healthcare Data Mining Audits?

Generally, the two primary targeting tools used by CMS contractors and law enforcement to identify wrongdoing are:  (1) Data Mining, and (2) Complaints.  This article focuses on the first targeting tool, the use of healthcare data mining. We will address “complaints” in detail in a later article.

At the outset, it is important to keep in mind that the government has been accumulating utilization, coding and billing data since the passage of the Medicare and Medicaid programs in 1965 as part of Title XVIII of the Social Security Act.  Over the past 40 years, the government has carefully studied this data, identifying trends and noting irregularities. Both HHS-OIG and CMS contractors (including, but not limited to Zone Program Integrity Contractors (ZPICs), Recovery Audit Contractors (RACs), and Medicaid Integrity Contractors (MICs)) are able to effectively use data mining to analyze various aspects of the coding and billing data submitted by billing health care providers. These entities employ experts in database management and use  sophisticated techniques to “slice and dice” the Medicare and Medicaid billing and coding data.  In doing so, they are able to compare providers by practice area, geography, time, and a practically endless number of other factors. They can then effectively identify any “outliers” which may be present when their billing patterns are compared to those of their peers.

For instance, in the case described above, healthcare data mining has become quite common.  It was clearly used to review the psychologist’s claims history and determine that what he was billing was likely both impossible and fraudulent.  Nevertheless, it is important to always keep in mind that although data mining may strongly suggest that a provider is engaging in improper conduct, at the end of the day, an outlier is merely a provider whose billing patterns differ from those of his / her peers.  A review of the documentation must still be conducted to ascertain whether, in fact, fraudulent conduct has occurred.  While ZPICs and MICs handle the majority of the data mining work being conducted, when the data appears to suggest that fraudulent conduct is taking place, providers should expect HHS-OIG and possibly the Department of Justice or the Federal Bureau of Investigations to step into investigation.  Unfortunately, while data mining can detect aberrant patterns in billing data, it can’t explain them, and often times, this leaves well-intentioned providers facing scrutiny if their billing history appears aberrant for an otherwise innocent reason.  For instance, a specialist who is renowned in his area of practice may be referred serious, highly complex patients by his peers. This could result in his billing patterns appearing to be different from those of similarly-situated physicians.  Despite the fact that there is an innocent explanation for the specialist’s billing patterns, the data alone may appear to suggest that fraud is taking place.  Health care providers should take affirmative steps to determine whether their coding and billing patterns are “normal” or whether their practices are irregular when compared to other providers.

To be clear, just because your coding and billing practices differ from those of your peers does not necessarily mean that you are engaging in improper conduct.  Nevertheless, if you are an outlier, we strongly recommend that you carefully analyze your internal practices in an effort to identify why your utilization history differs from those of your peers.  Perhaps you are, in fact, improperly coding or billing for services rendered.  If so, you will need to determine the scope of any overpayment and work with your legal counsel to promptly reimburse the government.  As we have repeatedly advised our clients, “If it isn’t yours, give it back.” Upon review, if your coding and billing practices appear skewed, you need to be ready to explain why your utilization rate is different if audited by a CMS contractor or investigated by law enforcement.

II.    Helpful Tools When Conducted an Internal Assessment:

If you are a Compliance Officer, part of your responsibilities includes the identification and repayment of any improper billings. While you can’t completely eliminate the risk of an audit, there are several tools that can help your organization determine how your utilization rates compare to those of your peers.  Among these tools is one of our personal favorites – DecisionHealth’s “E/M Bell Curve Data Book,” which gives a visual overview of the Center for Medicare and Medicaid Services’ (CMS’) Evaluation and Management (E/M) data rates for 59 different specialties. For instance, a general practitioner can look at his established patient office visits (CPT© codes 99211 – 99215) and compare his utilization rates to the national average for the same CPT© codes. This data can be extremely useful in assessing an office’s billing practices and patterns and give confidence to a provider whose rates are similar to the national average.

Another effective tool, especially for non-E/M practices, such as home health agencies and hospices, is the “The Dartmouth Atlas of Health Care,” which provides a variety of data tools to evaluate Medicare spending by county. Not only does this interactive website have average-spending-per-Medicare-beneficiary maps, it also has a tool which allows providers to examine national and state benchmarks for a variety of statistics. These include Medicare reimbursements, hospice, skilled nursing facility, and home health agency utilization rates, surgical procedures and more. Applied correctly, this data can be instrumental in a practice’s self-evaluation and gives providers significant insight into their own billing patterns.

III.     How Should You Respond to Healthcare Data Mining Audits?

Staying fully compliant with all of Medicare’s and / or Medicaid’s rules and regulations can be a quite a challenge.  Nevertheless, as a participating provider, you have affirmatively agreed to meet that obligation.  As providers are constantly reminded, serving as a participating provider is a privilege, not a right.  Unfortunately, even with the best tools, physicians, group practices, clinics, home health agencies and other providers may still find themselves subject to Medicare post-payment and / or prepayment audits by a ZPIC (and now by a RAC). Reviewers and auditors employed by Medicare contractors are highly experienced, knowledgeable and skilled in assessing the propriety of a claim.  They have years of experience handling audits and are quite good at identifying deficiencies in your documentation, regardless of how minor you may believe those  deficiencies might be.  While it is essential to understand your obligations as a Medicare participant, it is equally important to understand how and why practices get audited.  As discussed in earlier articles, while you may not be able to avoid an audit, you can do your very best to help ensure that upon review, a CMS contractor will find that your practices fully meet Medicare rules and regulations.  The development, implementation and adherence to an effective Compliance Plan is the single best step you can take to avoid regulatory problems.

Robert LilesRobert Liles is the managing member of Liles Parker PLLC. Robert represents providers in Medicare providers around the country in postpayment audits and appeals, and similar appeals under Medicaid. In addition, Robert counsels clients on regulatory compliance issues, performs gap analyses and internal reviews, and trains healthcare professionals on various legal issues. For a free consultation, call Robert today at: 1 (800) 475-1906.

OMHA Changes ALJ Hearing Case System

(March 2, 2012):  Likely recognizing the enormous disparity in Administrative Law Judge (ALJ) hearing workloads for its various Field Offices, the Office of Medicare Hearings and Appeals (OMHA) recently switched to a Central Docketing System for all pending and new appeals. Under this new system, all ALJ hearing requests will be sent to OMHA’s Central Office in Cleveland, OH. Each ALJ appeal will subsequently be assigned to one of the Field Offices – Irvine,  CA, Miami, FL or Arlington, VA – or to ALJs in the Central Office. Despite assigning appeals to different offices, OMHA is not breaking these appeals into their component parts – individual claims –  so “big box” cases will still be handled during one ALJ hearing.

OMHA While each appeal will likely be assigned to an office randomly, OMHA will likely base these assignments on current workloads at each of its offices. Therefore, a provider in Texas, Oklahoma  or Louisiana, who would previously have always gone before an ALJ in the Miami Field Office, may end up at an ALJ hearing in any of OMHA’s four offices. While this may be disconcerting at first, the typical ALJ hearing is conducted by phone or video-teleconference nowadays, meaning that the ALJ’s location doesn’t substantially affect how a case is handled. While it may be more difficult to ascertain the procedural habits of a single ALJ (such as in what order to present information or how formal each ALJ hearing session is), an experienced health lawyer will still be able to ably represent your interests since appeals and hearings are generally handled in the same fashion,

In any event, regardless of whether the assigned ALJ is in Cleveland, OH, Arlington, VA, or in one of the other Field Offices, you should seriously consider retaining qualified legal counsel.  In recent years, representatives of the Zone Program Integrity Contractor (ZPIC), the Medicare Administrative Contractor (MAC) and / or the Qualified Independent Contractor (QIC) are frequently choosing to participate in ALJ hearings, arguing why the claims at issue should not be paid (and effectively supporting the results of their earlier ZPIC audit).  Although the proceeding is technically “non-adversarial,” ALJ hearings can become quite contentious.  An experienced lawyer can assist you in understanding the process so that you may more effectively present your arguments in support of payment.  As new rules and administrative guidance comes out regarding the Medicare post-payment audit appeals process, check back with us for more information.

Liles Parker is a full service health law firm with several offices around the country. Representing providers in all stages of Medicare post-payment appeals, including ALJ hearings, our attorneys are well-versed in the administrative appeals process and capable of aggressively handling your case. In addition, we conduct compliance program advising and implementation, as well as mock audits, staff training and health care business transactions. Please call Robert W. Liles at 1 (800) 475-1906 for a complimentary consultation today.

Georgia Prepayment Reviews are Being Conducted by AdvanceMed

Georgia Prepayment Reviews are Being Conducted by AdvanceMed

(February 29, 2012): In the past few weeks, AdvanceMed Corporation, the Zone Program Integrity Contractor (ZPIC) for Regions II and V (covering the Northwestern and Southeastern portions of the United States, respectively), appears to have significantly expanded the number of Georgia prepayment reviews it is conducting.  More specifically, AdvanceMed appears to be focusing on hospices, psychiatric services and pain management, practice areas where problems has been identified by the government in the past.  From calls we have received, it does not appear that only metropolitan area providers are under scrutiny.  Rather, Georgia prepayment reviews appear to be occurring throughout the entirety of the State.  To be clear, the government’s increasing use of prepayment review is not surprising — it is consistent with their overall efforts to prevent improper coding and billing practices from occurring in the first place.  The Centers for Medicare & Medicaid Services (CMS) are understandably frustrated with old, tired enforcement tactics which relied on “Pay and Chase” strategies.

I.  As Georgia Prepayment Reviews Move Forward, What Steps Can You Take to Avoid this Initiative?

In most cases, health care providers are targeted and placed on prepayment review because of:  (1) data mining has identified the provider as an “outlier,” or (2) a complaint has been filed against the provider.  The best preventative measure you can take is to design and implement an effective Compliance Plan.  As a first step, you should conduct a “GAP Analysis” to determine whether your operations, coding and billing practices fully meet applicable laws, regulations and guidelines.  If not, remedial action must be taken to put the organization back on the right path.  During this process, you will likely learn how your coding and billing practices compare to those of your peers.  Should you find that your practices result in the organization appearing to be an “outlier,” it is essential that you determine how and why your practices differ from those of similarly situated providers.  You may or may not be doing wrong.  If you are handling claims incorrectly, fix them and return any monies owed to the contractor.  If you believe that your practices are compliant, that’s fine — but you better be prepared to respond to an audit.

II.  Don’t Wait to be Audited – Review Your Practices Now!

Notably, when AdvanceMed places a health care provider on prepayment review, the claims being scrutinized are likely associated with services performed in the last week or two.  This means that providers currently have the opportunity to assess and potentially correct their documentation practices if deficiencies are identified. We recommend that all Georgia providers examine their medical records and critically determine whether they actually meet the relevant criteria for reimbursement.  Pull applicable Local Coverage Determination (LCD) rules and carefully review the medical necessity, coverage and documentation requirements set out in the contractor’s guidance.  Are your documentation, coding and billing practices compliant?

III.  How Should a Georgia Provider Respond if They Have Already Been Placed on Prepayment Review?

The prepayment review process can be long, complex and challenging.  Moreover, the lack of a quick payment turnaround can be devastating on a small practice’s cash flow, and similarly inhibit larger entities from effectively navigating the revenue cycle. This problem is only exacerbated by the fact that AdvanceMed, as a ZPIC, is not obligated to return a decision on prepayment review claims to a provider within a specified time frame. Unlike Medicare Administrative Contractors (MACs), who, according to the Medicare Program Integrity Manual  (PIM) Chapter 3, Section F, must make and issue a decision within 60 days of receiving a medical record for prepayment review, ZPICs are not under the same duty to quickly make decisions on claims. The PIM is entirely silent on what the time frame is for ZPICs to conduct prepayment review and issue notification to the concerned provider. This may result in ZPICs, such as AdvanceMed, taking an inordinate amount of time to complete their prepayment review of your claims.

During this ongoing effort by AdvanceMed, Georgia providers should expect that prepayment review will take 90 – 180 days on average from when AdvanceMed receives the relevant medical records. Moreover, based on average denial rates we have seen in the past, providers should expect that 60 – 75 percent of their claims may be denied by AdvanceMed (although it is not uncommon for us to see denial rates at or approaching 100 percent). Upon denial of these claims, providers then have the right to take these claims through the Medicare administrative appeals process. As some of you may know, this is also a long process which usually culminates in a hearing before an Administrative Law Judge (ALJ). Regardless of your experience in this area, it is important to remember that qualified counsel can greatly assist you in developing and presenting arguments and evidence to the ALJ, as well as ensuring that all supporting documentation is included in the medical record. As AdvanceMed continues its prepayment review initiative in Georgia (and possibly expands this effort into surrounding states), providers should take a second look at their documentation and make sure it passes muster. The time to do this is now, not when AdvanceMed is knocking at your door.

Robert LilesLiles Parker is a full service law firm with attorneys experienced in representing providers in Medicare postpayment audits and counseling providers on prepayment review strategy. Moreover, our firm is skilled at conducting mock audits, compliance reviews and internal audits and investigations to ensure compliance with applicable laws and regulations. For a free  consultation about your case, please feel free to call us at 1 (800) 475-1906.

RAC Prepayment Review Delays Will Effectively Place the Project on Hold.

(January 11, 2012): Health care providers are increasingly finding that their Medicare claims are being placed on prepayment review by one or more Medicare contractor.  As these providers can attest, prepayment review can seriously disrupt a provider’s cash flow, possibly leading to bankruptcy if it is not resolved quickly.  As discussed below, the use of prepayment reviews as an audit toll is likely to increase greatly as Recovery Audit Contractors (RACs) will soon begin also conducting prepayment reviews.

I.  RAC Prepayment Review Delays Have Been Announced by CMS:

Last month, we discussed a new demonstration project by the Centers for Medicare and Medicaid Services (CMS) to test the ability of RACs’ to conduct prepayment reviews of Medicare Part A and B claims. RACs have successfully identified a wide variety of Medicare overpayments in the past and have become one of CMS’ most important post-payment audit tools. In light of their continued success, last November, CMS announced that RACs would also now conduct  prepayment reviews and audits. An initial RAC Prepayment Review Demonstration Project was intended to cover many of the same types of prepayment review as those currently conducted by ZPICs around the country.  The RAC Prepayment Review Demonstration Project was initially slated to be conducted in:

  • Florida
  • California
  • Mississippi
  • Texas
  • New York
  • Louisiana
  • Illinois
  • Pennsylvania
  • Ohio
  • North Carolina
  • Missouri

After CMS announced the RAC Prepayment Review Demonstration Project, it reportedly received an outpouring of concerns regarding the scope of these prepayment reviews and audits.  In consideration of these concerns, yesterday CMS announced that it was indefinitely delaying implementation of the demonstration project, and would give 30 days notice before the RAC Prepayment Review Demonstration Project was reactivated.

II.     Commentary Regarding RAC Prepayment Review Delays:

Importantly, CMS’s decision to delay the RAC Prepayment Review Demonstration Project does not mean that RAC prepayment reviews won’t occur. Moreover, it is essential that health care providers keep in mind that other CMS contractors are already placing a wide variety of Part A and Part B providers on prepayment review.  As before, providers should regularly review their activities to ensure that all regulatory and statutory requirements are being met.

It is important to keep in mind that there is no administrative appeals process or other effective legal remedy to get off prepayment review.  In fact, there is no “silver bullet,” despite what you have heard or been told.  The only way to be taken off of prepayment review is to show the responsible Medicare contractor that your claims fully meet each of Medicare’s myriad statutory and regulatory requirements for coverage and payment.  To that end, there are a number of preemptive steps a provider can take to reduce the chances of being selected for prepayment review in the first place.

To start, we recommend that you (or your qualified legal counsel) conduct a “GAP Analysis” of your claims.  In doing so, you will readily identify any possible deficiencies in your medical necessity assessments, coverage, documentation, coding and / or billing activities.  Moreover, you should consider assessing your utilization rate against the local and national average. For instance, for basic Evaluation and Management (E/M) services, are you or your providers billing higher level codes more often than your peers?  Medicare contractors use this data to identify possible outliers who may be engaging in improper coding and / or billing.  Data mining can also be used by contractors to identify potential problem providers who may need to be audited and / or placed on prepayment review.  Keep in mind, should you identify any overpayments when you conduct a GAP Analysis, you must report the overpayment and return it to the government within 60 days.  Any deficiencies noted in your review can be promptly addressed and added to the risk areas covered in your Compliance Plan.  After taking these steps, you will likely be well situated to respond to any prepayment audits initiated by a Medicare contractor, regardless of whether the contractor is a RAC or another Medicare contractor.

robert_w_lile-150x150Robert W. Liles and other Liles Parker attorneys have extensive experience advising health care providers on how to best respond to prepayment reviews and post-payment audits.  Mr. Liles also counsels providers on “GAP Analyses” and provides compliance guidance to home health agencies, physicians, DME suppliers and other health care providers and suppliers.  For more information, please call Robert today for a free consultation.  He can be reached at: 1 (800) 475-1906.

Ten Recommendations to Improve Medicare Compliance and Prepare for a ZPIC Audit

Improve Medicare Compliance(July 24, 2011): Has your Texas physician practice, home health agency, hospice, DME company or PT / OT / ST clinic been audited by a Zone Program Integrity Program (ZPIC)?  If not, it may only be a matter of time.  Despite your best efforts to follow Medicare’s directives, your organization may still be identified as an “outlier” by a ZPIC and subjected to a probe review or a full-blown audit.  Should you receive a request for records from a ZPIC, being prepared — in advance of receiving a ZPIC request— can help ensure your organization’s compliance with applicable documentation, coding and billing requirements.  The following recommendations can assist with those efforts:


Recommendation #1  If you have not already done so, conduct a “gap analysis” and implement an effective Compliance Program.  Despite the fact that significant strides in compliance have been made by large Medicare providers (such as hospitals and nursing homes),  it has been our observation that most physician practices and small-to-mid sized provider organizations still do not have a tailored Compliance Plan in place.   To be clear, we recognize that many providers may have copied a draft plan right off of the internet, or may have purchased a sample plan from a vendor.  While they may fully have intended to follow through with personalization of the draft document, in most of the cases we have seen, more pressing events have taken precedence and providers have not had the time or expertise to complete the project.

Providers who have not put together a Compliance Plan should immediately do so. As you have likely heard, Section 6401 of the Affordable Care Act (ACA)(generally referred to as the “Health Care Reform Act”) states, “. . . a provider of medical or other items or services or supplier within a particular industry, sector or category shall, as a condition of enrollment in the program under this Title. . .establish a compliance program.”   To be clear, at this time, the Department of Health and Human Services, Office of Inspector General (HHS-OIG) has not announced deadlines effectuating this requirement.  Nevertheless, it is merely a matter of time until all providers who choose to participate in the Medicare program will be required to have an effective Compliance Plan in place.

Rather than wait until the last-minute, Medicare providers who have not already done so should immediately take steps to implement an effective plan.  As a first step, providers should review each of the regulatory and statutory provisions related to the specific services being billed to Medicare.  Next, providers should compare their actual documentation, coding and billing practices with Medicare’s rules.  Any gaps between the applicable requirements and a provider’s actual practices must immediately be remedied. Additionally, should these gaps represent an overpayment, the Medicare provider must repay the overpayment to the government within 60 days of identification.

Prior to conducting a gap analysis, we recommend that providers contact their legal counsel for assistance with both the internal review and with the implementation of an effective Compliance Plan.   While no Compliance Plan can prevent an audit, the implementation of an effective plan will greatly improve a provider’s likely adherence to Medicare’s rules and regulations should a ZPIC audit be initiated.

Recommendation #2:   Don’t ignore a ZPIC’s request for documents[1]. At the outset, it is important to keep in mind that ZPICs play an important role.  In addition to  auditing records for possible overpayments, ZPICs are also responsible for identifying fraudulent providers (and potentially fraudulent providers) and making referrals to the Centers for Medicare and Medicaid Services (CMS), the Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the U.S. Department of Justice (DOJ) for further action.  Possible actions taken include, but are not limited to:

  • CMS — Administrative action such as suspension or revocation from the Medicare program.
  • HHS-OIG – Administrative action such as Civil Monetary Penalty action.  HHS-OIG may also investigate and refer a provider to DOJ for possible civil litigation under the False Claims Act.  Finally, HHS-OIG may investigate and refer a provider to DOJ for criminal prosecution under the Federal Anti-Kickback Act or a host of other statutes.
  • DOJ – May investigate and prosecute a provider for civil and / or criminal violations of law.

Should you receive a request for documents from your ZPIC, in many cases it will broken into two sections.  The first section will likely be focused on business related records such as the following: 

“Business contracts or agreements with other providers, suppliers, physicians,  businesses or individuals in place during a specific period.  Additionally, any verbal agreements must be summarized in writing.

A listing of all current and former employes (employed during a specific period), along with their hire date, termination date, reason for leaving, title, qualifications, last known address, phone number.

    • A list of all practice locations, along with their address and phone number.
    • Leases.
    • Employment agreements.
    • Medical Director contracts.” 

The unstated purpose of this portion of the ZPIC’s request is likely to identify potential instances of violations of the Federal Anti-Kickback Statute, Stark and / or the False Claims Act.  Should the ZPIC identify a possible violation, it will readily refer the case to CMS, HHS-OIG and / or DOJ, depending on the nature of the potential violation.

In contrast to the first section of the ZPIC’s request, the second section of the request usually lists the patient records and dates of service to be audited by the ZPIC.  While every case is different, the number of claims requested typically ranges from 8 – 100, depending on whether the ZPIC’s request is a “probe review” or a full-blown audit.  On occasion, we have seen the number of claims sought can range from 150 – 300.

Never ignore a ZPIC request for records.[2] Importantly, should you fail to respond to the ZPIC’s request, the contractor can recommend to the CMS that your organization be suspended[3] or from participation in the Medicare program.  Depending on the ZPIC’s concerns, the contractor can also recommend that CME pursue a revocation action against your organization.  Should you need more time to the ZPIC’s request for supporting documentation, don’t hesitate to request it.

Recommendation #3:  Remember learning how to “drive defensively” in high school?  Your documentation practices should be approached in a similar fashion.   ZPIC auditors are excellent at identifying one or more ways in which your claims do not meet applicable coverage requirements.  While you may very well disagree with their assessments (especially in “medical necessity” determinations), in all likelihood, when you file a request for redetermination appeal (and later, a request for reconsideration appeal), you will find that your Medicare Administrative Contractor (MAC) and your Qualified Independent Contractor (QIC) agree with the ZPIC’s denial decision.  Rather than endure significant costs and stress when defending against an overpayment assessment, you need to take steps to avoid a denial in the first place. To that end, health care providers should ensure that clinical staff members are fully trained and educated regarding Medicare’s documentation, coding and billing process.

We recognize that “perfect documentation” is neither required nor realistic to expect from your clinical staff.  Nevertheless, using published reports of other cases, you can show your clinicians that ZPICs  enforce a strict application of Medicare’s documentation and coverage requirements.  Through education and training, your clinical staff will understand why it is imperative that they review, understand and comply with:

  • Any applicable Local Coverage Determinations (LCDs).
  • Any Local Medical Review Policies (LMRPs).
  • The Medicare Policy Benefit Manual (MPBM).
  • The Medicare Program Integrity Manual (MPIM).
  • Any statutory provisions which cover the services.
  • Any additional guidance issued by Medicare which would apply to these claims.

It is important that you regularly review the government’s latest concerns and any enforcement actions which have been taken.  Additionally, you should read HHS-OIG’s reports so that you may learn from the mistakes being made by similarly situated providers.  Upon doing so, we recommend that you check the list of “risk areas” in your Compliance Plan and ensure that they reflect both general “risks” and “specific risks” which may be unique to your organization.  Is your organization still in full compliance?  If not, remedial action is likely necessary.

Recommendation #4:  Retain experienced legal counsel to assist with your efforts. When experiencing symptoms of a cardiac problem, most patients wouldn’t turn over their care to a dermatologist.  Instead, they would seek to be evaluated and treated by a Cardiologist.  Similarly, if you have a health law problem, would it be wise to rely on advice from an attorney specializing in family law?  Ultimately, that’s your call.  While no attorney can guarantee you success — we believe that an experienced health lawyer is well situated to give you advice regarding a Medicare audit or investigation.   Having said that, it is important to recognize that the field of health law is extraordinarily broad.  Should you be audited by a ZPIC or a Recovery Audit Contractor (RAC), don’t hesitate to ask a health lawyer whether they have handled these types of cases before.  If so, how many times have they represented a provider in a ZPIC overpayment case?  When selecting a lawyer, keep in mind that the legal fees charged by an attorney can vary greatly, depending on a variety of factors.  Don’t be shy – ask how much the representation is likely to cost.  While it is often difficult to estimate legal costs due to the various factors faced when handling a ZPIC audit case, most attorneys can give you a range of expected legal fees.  Finally, be sure and ask for references.  Other providers who have been through an administrative appeal case can provide you with invaluable insights into the process.  As a final point, on numerous occasions, our firm has been retained to work with a provider’s existing legal counsel.  We are more than happy to do so and can effectively work with your counsel in a fashion which avoids duplication of efforts yet allows our experience and expertise to be applied to your case.

Recommendation #5:  The administrative appeals process has become quite complicated in recent years.  ZPIC audits can result in alleged overpayments running into the millions of dollars. Moreover, the ZPIC’s overpayment assessment (and the associated “demand” letter sent by a MAC) isn’t usually the end of the story.  While providers often lose at the redetermination and reconsideration levels of appeal, the third level of appeal – before an Administrative Law Judge (ALJ) – is usually your single best opportunity to prevail in an administrative appeals action.  Over the years, our attorneys have argued cases in front of judges out of each of the field offices of the Office of Medicare Hearings and Appeals (OMHA).   While we may not always agree with their decisions, the ALJs in whose courts we have practiced have been professional, fair and more than willing to hear a provider’s arguments in support of payment.

Should you choose not to engage legal counsel and represent yourself in an ALJ hearing, keep in mind that even though these hearings are intended to be non-adversarial,”  it can feel quiteadversarial” during the actual hearing.  Furthermore, these proceedings can be quite complicated.  In most large dollar cases, representatives of the ZPIC are participating in the hearing and arguing their position before the ALJ.  ZPIC representatives can include one or more statisticians (if an extrapolation was conducted), a clinician (usually a Registered Nurse who is experienced in conducting medical reviews) and a lawyer.  In a recent Home Health Agency case we handled, this was precisely what occurred.  Frankly, few providers are experienced in presenting their case and in responding to the arguments raised by statisticians, clinicians and lawyers representing a ZPIC.  As a result, it is strongly recommended that the provider consider engaging an experienced and knowledgable attorney.

Recommendation #6 When reviewing your claims, you should abide by the following:  First, “If it doesn’t belong to you, give it back.”  Conversely, “If you don’t owe the money, don’t throw in the towel.”  One of the attorneys in our firm is regularly asked to speak at provider conventions around the country.  For years, he has told providers “If it doesn’t belong to you, give it back.”  This simple concept covers a lot of ground when it comes to alleged Medicare overpayments.  Similarly, if the facts and the evidence shows that the claims should have been paid,  think twice before waiving your right to appeal the denial of these claims.  From a practical standpoint, we have heard of  situations where a provider chooses to “just pay the bill” so that the case will quickly be resolved.  Several providers have commented that when dealing with small dollar assessments, it is just easier to pay the alleged overpayment rather than incur the hassle and expense of contesting the contractor’s denial decision.  Although we understand the reasoning behind such a decision, you should keep in mind that every claim which is denied by a ZPIC (and which remains denied) increases a provider’serror rate.”  If you were a ZPIC, PSC, RAC or MAC contractor, would you choose to audit a provider with a low error rate or a high error rate?  In any event, the bottom line is fairly straight forward.  Should you find that you are not entitled to payment for one or more claims, you must  repay the money to the government as soon as possible (but no later than 60 days after an overpayment has been identified),  regardless of whether the claim is part of an ongoing or recently completed Medicare audit.  If, however, you are audited and you believe that a ZPIC has incorrectly denied one or your claims, you have the right to appeal the denial of these wrongfully denied claims.

Recommendation #7:  Carefully read a ZPIC’s denial decision letter. When you receive a denial decision letter relied upon by a ZPIC, carefully review the notice and determine whether the contractor has specifically addressed the reasons for denial associated with each of the claims at issue.  Every ZPIC is different.  Over the last few months, one of the ZPICs involved in the cases we are handling has been citing only a general reason for denial (such as “not medically necessary”).  Should the ZPIC in your case not provide sufficient information, you will find it difficult, if not impossible, to address any specific reasons your claims have been denied.   Your legal counsel may be able to get the ZPIC to provide additional specificity in connection with their denial reasons.  Alternatively, legal counsel may be able to argue that the ZPIC’s failure to provide specific reasons for denying your claims is a clear violation of your due process rights.

Recommendation #8 Don’t forget – shortly after the “demand letter” is sent, any payments you may be expecting may be recouped by your Medicare Administrative Contractor (MAC).   A demand letter from your MAC usually follows a few days  after you receive a ZPIC’s denial decision letter.  While you have 120 days to file a request for redetermination appeal (as outlined in he MAC’s demand letter)[4], should you fail to file the request for redetermination appeal within 30 days of the date of the MAC’s demand letter (not 30 days after receiving the demand letter!), your Medicare payments will be recouped starting on day 41.  Alternatively, a provider may set up an extended repayment program with the MAC so that the alleged overpayment can be repaid through monthly installments.  We strongly recommend that you set this up.  You will then be able to take advantage of the 120 period permited to file a redetermination appeal rather than try and file a poorly prepared set of arguments within the previously discussed 30 day period.  Similar issues (with completely different deadlines) are present at the reconsideration level of appeal — the next level in the administrative appeals process. Once again, these issues can be quite complicated.  We recommend that you discuss available appeals options with your legal counsel.

Recommendation #9: Foster a corporate culture which encourages compliance.  ZPICs have increased their audit activities dramatically in numerous areas of the country.  The Southern District of Texas (especially South Texas) has been hit hard in recent months.  Providers in Houston, McAllen, Harlingen, Edinburgh, Laredo, Corpus Christi and Brownsville appear to have experienced a recent surge in audit activity.  Be aware that ZPICs are looking for aberrations in billing patterns and often target providers based on these variations in coding or billing practices.  Compliance with regulations and consistency in your “message” to employees is essential. Establishing good intake and records management procedures, continuing employee education and training efforts, can facilitate the adoption of an ethical, compliant corporate culture.

           And, last but not least,

Recommendation #10 When drafting a Compliance Plan, providers should include a “Code of Conduct” that is easily understood by all employees.  We believe that a “Code of Conduct” should accurately reflect the belief system an organization has pursued and sincerely intends to follow.   In doing so, an organization can engender a compliant corporate culture.  Over the years, we have seen organizational “Codes of Conduct” which range from a succinctly described phrase to discussions which take up more than a page.

Our favorite “Code of Conduct” (which also happens to be the “Code of Conduct” adopted by our law firm) is used by Cadets at the United States Military Academy at West Point. Modified for use by health care providers, the “Code of Conduct” reads:

Our clinicians and staff will not lie, cheat, steal, or tolerate those who do.”

This simple, yet elegant “Code of Conduct” succinctly lays out a provider’s ethical responsibilities, both with respect to Medicare and in their other business dealings.  We recommend that you consider adopting and adhering to this or a similar “Code of Conduct.”

Our attorneys have extensive experience representing physicians, clinics, home health agencies, hospices, DME companies, skilled nursing facilities, chiropractors, pain medicine clinics, rehabilitative medicine clinics and other Medicare providers in connection with audits by ZPICs, MACs and other contractors.  We also have years of experience assisting providers with “gap analyses” and in implementing an effective Compliance Program.  Should you have questions about these or other health law issues, please feel free to call Robert W. Liles for a complementary consultation.  Robert can be reached at:  1 (800) 475-1906.  


[1] Infrequently, a ZPIC may choose to conduct a “probe” review rather than a full audit.  Probe reviews usually involve a request for the records and supporting documentation related to 10 – 15 claims paid by Medicare.

[2] ZPIC requests for audit information typically include language similar to the following: “Failure to provide this information or to permit examination and duplication of records could result in a decision by the Office of the Inspector General to exclude you from Medicare, Medicaid and all Federal health care programs.”

[3] 42 C.F.R. §405.372(a)(2).

[4] It is presumed that you received the MAC’s demand letter 5 days after the demand letter is dated.  From a timing standpoint, we strongly recommend that you completely disregard the “5 day” issue unless it is absolutely necessary to rely on it.  Our practice is to make sure that our client’s redetermination appeal is filed (and received) well in advance of the 120 day appeal deadline.

ZPIC Audits are Here. When it Rains, it Pours . . . DME Compliance is Essential!

ZPICs are Auditing DME Companies. DME Compliance is Essential. (April 6, 2011):  On September 15, 2010, the Inspector General of the Department of Health and Human Services (HHS-OIG), Daniel Levinson, testified before the House Committee on Energy and Commerce, Subcommittee on Health regarding waste, fraud, and abuse in the Medicare program, with a specific focus on durable medical equipment and supplies. Mr. Levinson noted that, over the last three decades, HHS-OIG has detected “significant levels” of fraud and abuse related to durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). These concerns have resulted in steadily increasing oversight of DMEPOS suppliers by HHS-OIG and Medicare contractors.

I. DME Compliance Concerns Have Led to Multiple Regulatory Changes: 

Perhaps most significantly, these concerns have led to the passage and implementation of a host of new statutes and regulations designed to deter and punish DMEPOS-related waste, fraud, and abuse. For instance, the Affordable Care Act (“ACA,” also informally referred to as “Health Care Reform Act” ) was signed into law by President Obama on March 23, 2010.  ACA has dramatically expanded the regulatory authority of the Centers for Medicare and Medicaid Services (CMS) as it relates to DMEPOS suppliers. In his testimony before the Subcommittee on Health, Mr. Levinson remarked,

 “The ACA provides the Secretary with new authorities and imposes new requirements consistent with OIG’s health care integrity strategy and recommendations. These include promoting data access and integrity; requiring actions to strengthen provider enrollment standards; promoting compliance with program requirements; and enhancing program oversight, including requiring greater reporting and transparency.” (emphasis added).

As set out below, each of these new regulatory measures (many of which have only recently become effective), will have a substantial impact on the way in which DMEPOS suppliers are reviewed and evaluated by Medicare contractors and by law enforcement authorities.

 II.   Preenrollment and Revalidation Screening Procedures:

The ACA empowered CMS to classify newly-enrolling or revalidating providers based on their perceived risk of fraud and then link those classifications to various types of screening procedures. This new rule, which went into effect on March 25, 2011, creates three categories of risk into which providers will be sorted: (1) Limited, (2) Moderate, and (3) High. The risk level with which a provider is designated is commensurate with the extent and nature of the pre-enrollment or revalidation screening procedures. Under the new rule, currently enrolled, revalidating DMEPOS suppliers have been assigned to the “Moderate Risk” category,[1] while newly-enrolling DMEPOS suppliers (including currently-enrolled DMEPOS suppliers who are adding another location) will be deemed “High Risk.”[2]

(A)  Overview of Available Screening Procedures.

       The following screening procedures are currently available to CMS:

  • Licensure Requirements – DMEPOS suppliers are required to comply with all applicable licensing, certification, or accreditation requirements in the state where they are located. Medicare contractors are responsible for reviewing state licensing board data every month to ensure that DMEPOS suppliers remain licensed, certified, or accredited.
  • Database Checks – Medicare contractors check various databases to ensure that current and prospective supplier information is accurate. CMS contractors check databases maintained by the Social Security Administration (used to verify an individual’s Social Security Number), the National Plan and Provider Enumeration System (NPPES) (used to verify the national provider identifier (NPI)), HHS-OIG’s “List of Excluded Individuals or Entities,” and the General Service Administration’s “Excluded Parties List System.”
  • Site Visits – The Medicare Program Integrity Manual (MPIM) permits contractors to conduct site visits to determine if a DMEPOS supplier is “operational”[3] or to ascertain whether the supplier is meeting applicable regulatory standards or program requirements. Some examples of site visits include:
  • The National Supplier Clearinghouse (NSC) Medicare Administration Contractor (the Medicare contractor responsible for handling enrollment applications for DMEPOS suppliers) currently conducts pre-enrollment site visits of DMEPOS applicants that are not part of a chain supplier (a chain is a supplier with more than 25 locations).
  • The NSC also conducts post-enrollment site visits to DMEPOS suppliers if CMS or NSC believes that the supplier may be involved in fraudulent or abusive activities.  These post-enrollment site visits are intended to help ensure DMEPOS compliance with supplier standards.
  • A state survey agency or an approved national accreditation organization with “deeming authority” may also conduct pre-enrollment surveys of certified providers and suppliers to determine if they meet the Federal conditions of participation.
  • Criminal Background Checks – CMS is now empowered to conduct criminal background checks of DMEPOS “owners” (e.g. those who maintain a 5% or more ownership interest in the supplier), authorized officials, or managing employees.
  • Fingerprinting – the new fingerprinting requirement also applies to all owners, authorized officials, or managing employees of a DMEPOS supplier.

(B)          Currently-Enrolled, Revalidating DMEPOS Suppliers.

Currently enrolled, revalidating DMEPOS suppliers, which are deemed “Moderate Risk” under the new regulations, will be subject to the following screening measures:

  • Verification that the provider meets applicable federal regulations and state requirements;
  • Verification that the provider meets applicable licensure requirements;
  • Ongoing database checks to ensure that the provider satisfies all applicable enrollment criteria; and
  • Unannounced or unscheduled site visits prior to and following provider enrollment or revalidation.

CMS has elected to categorize currently-enrolled, revalidating DMEPOS suppliers as “Moderate Risk” because many of them are highly dependent on federal healthcare programs for revenue and because CMS believes that a number of these types of providers enter business without any substantial clinical or business experience.

(C)        Newly-Enrolling DMEPOS Suppliers.

Newly-enrolling DMEPOS suppliers will fall into the “High Risk” category and therefore must meet all of the foregoing requirements for “Moderate Risk” providers and undergo:

  • Fingerprinting; and
  • Criminal background checks.

CMS has classified newly-enrolling DMEPOS suppliers as “High Risk” because of the substantial number of such providers already enrolled in the Medicare program and the numerous government reports alleging waste, fraud, and abuse by DMEPOS suppliers in the Medicare program.

(D)  Adjustments to a Supplier’s Risk Category. 

The new rule also permits CMS to increase a supplier’s risk level from “Limited” or “Moderate” to “High” in any of the following circumstances:

  • CMS imposed a payment suspension on the supplier in the last 10 years;
  • The supplier has been excluded from Medicare by HHS-OIG;
  • The supplier’s billing privileges were revoked in the last 10 years and the supplier is attempting to establish new Medicare billing privileges by enrolling as a new supplier or registering a new practice location;
  • The supplier is precluded from billing Medicaid;
  • The supplier has been subject to any “final adverse action” in the last 10 years;
  • The supplier has been excluded from any federal healthcare program; or
  • CMS has lifted a temporary moratorium for a particular supplier type and a supplier that was prevented from enrolling due to the moratorium applies for enrollment within 6 months from the date the moratorium was lifted.

III.  Certification Standards:

There are currently 30 unique standards that DMEPOS suppliers must certify that they meet and remain compliant with in order to be eligible for payment by Medicare. Four of these “standards” recently took effect on September 27, 2010. Additionally, on April 4, 2011, CMS published a proposed rule revising four different, existing standards.

(A)  New Certification Standards.

The four recently enacted certification standards with which DMEPOS suppliers must comply include:

(1) Oxygen Procurement: All DMEPOS suppliers must obtain oxygen from a state-licensed oxygen supplier if the DMEPOS supplier is located in a state that requires oxygen suppliers to be licensed.  (42     C.F.R.  § 424.57(c)(27)).

(2) Records Maintenance: All DMEPOS suppliers must maintain ordering and referring documentation relating to written orders and requests for payments for medical equipment within 7 years of the date of service. (42 C.F.R. § 424.57(c)(28)).

(3) Facility Location: All DMEPOS suppliers are prohibited from sharing a practice location with any other Medicare supplier or provider, except where:

  • The DEMPOS supplier is co-located with and wholly owned by a hospital, home health agency, skilled nursing facility, or other Medicare Part A provider and the DMEPOS supplier operates as a separate unit; or
  • A physician, non-physician practitioner, or physical or occupational therapist furnishes items directly to his or her own patients as part of his or her own professional services. (42 C.F.R. § 424.57(c)(29)).

(4) Business Hours: All DMEPOS suppliers must be open to the public for a minimum of 30 hours per week, except where:

  • A physician, non-physician practitioner, or physical or occupational therapist furnishes items directly to his or her own patients as part of his or her own professional services; or
  • The DMEPOS supplier is working with custom made orthotics and prosthetics (42 C.F.R. § 424.57(c)(30)).

(B) Proposed Revisions to Existing Certification Standards.

A Proposed Rule issued by CMS would alter four certification standards that are currently in force, including the following:

(1) Prohibition Against Direct Solicitation:

Current Rule: DMEPOS suppliers are prohibited from engaging in direct solicitations (e.g. by telephone, computer, e-mail, or in-person contact) of Medicare beneficiaries without their consent for the purpose of marketing a DMEPOS supplier’s products or services. (42 C.F.R. § 424.57(c)(11)).

Proposed Revision: The new rule would replace the phrase “direct solicitation” with a prohibition on contacting Medicare beneficiaries by telephone.

(2) State Licensure and Contractual Arrangements:

Current Rule: If a DMEPOS supplier is located in a State that requires a license to furnish items or services, the supplier must be licensed to provide those services and must employ any professionals so licensed on a full- or part-time basis. DMEPOS suppliers cannot contract with a third party to provide any such licensed services. (42 C.F.R. § 424.57(c)(1)(ii)).

Proposed Revision:  A DMEPOS supplier may contract with a third party to provide a service that must be licensed under State law where such an arrangement is not expressly prohibited by State law.

(3) Compliance With Local Zoning Ordinances:

Current Rule: DMEPOS suppliers must comply with all local zoning requirements as a condition for payment by Medicare. (42 C.F.R. § 424.57(c)(1)(iii)).

Proposed Revision: CMS has proposed to eliminate this rule entirely.

(4) Physical Facility and Site Requirements.

Current Rule: DMEPOS suppliers must maintain a physical facility on an appropriate site, that meets certain requirements related to minimum square footage, visible signs, posted hours of operation, public accessibility, and adequate space for record storage, among others. (42 C.F.R. § 424.57(c)(7)).

Proposed Revision: The current rule exempts State-licensed professionals who provide custom fabricated orthotics or prosthetics in private practice. The proposed revision would extend this exemption to such professionals in States that do not offer such licenses.

In reviewing these proposed changes, most Suppliers believe that CMS’  contemplated regulatory changes merely represent additional “tightening” of the rules applied to DMEPOS Suppliers – effectively strengthening the government’s oversight over the industry.  In any event, these proposed changes clearly point to the need for an effective Compliance Program.

IV.  Conclusion:

Suppliers who are concerned about these new regulations should contact qualified counsel to assist with developing an effective compliance plan or, if need be, responding to an adverse action taken by CMS against the supplier.

Robert W. Liles defends health care providers in Medicare auditsRobert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law. Our attorneys are experienced in representing DMS suppliers and other Medicare participating providers in a wide range of audits, investigations and other enforcement actions by both contractors and by law enforcement.  Should you have any questions regarding this article or other regulatory requirements, please contact us.  Initial consultations are free.  We can be reached at (202) 298-8750.

[1] A DMEPOS supplier who undergoes a change of ownership with no corresponding change to its tax identification number (or vice versa) will fall within the “Moderate Risk” category.

[2] A DMEPOS supplier who undergoes a change of ownership and a change to its tax identification number will fall within the “high risk” category.

[3] The MPIM defines “operational” to mean that the supplier has a qualified physical location, is open to the public for the purpose of providing healthcare services, is prepared to submit valid Medicare claims, and is properly staff, equipped, and stocked to furnish items or services.

2011. . . The Year of Compliance — Avoiding ZPIC Audits and ZPIC Suspension Actions

A ZPIC Suspension Action Can be Financial Disastrous for Your Practice.(January 11, 2011):  ZPIC audits and ZPIC suspension actions are a serious risk facing non-hospital providers today.  As you recall at the end of 2010 we identified the “Top Ten Health Care Compliance Risks for 2011.”  The purpose of this article is to analyze two of those risks; Zone Program Integrity Contractor (ZPIC) audits and ZPIC Suspension Actions. Over the next few days we will be discussing these two risk areas in-depth.



I. ZPIC Audit and ZPIC Suspension Actions are Here:

As discussed in our “Top Ten” article, we anticipate that ZPIC audit and ZPIC suspension actions will ratchet up in 2011.  At the close of 2010, there already appeared to be an increase in the use of suspension actions by ZPICs in South Texas and in other areas of the country.  In many instances, these actions were the result of sophisticated data mining techniques by ZPICs.  While cases are initiated in a variety of ways (including, but not limited to whistleblower complaints, anonymous reports to the government’s fraud hotline, etc.), data mining is a key tool relied on by ZPICs and government agencies for targeting purposes.

After analyzing the data, ZPICs often send out requests for information or conduct site visits of health care provider facilities.  These requests and / or site visits can result in medical reviews, demands for alleged overpayments, or lead to referrals to one or more government investigative agencies (such as the Department of Health and Human Services’ Office of Inspector General (OIG), the State Medicaid Fraud Control Unit (MFCU) and / or the Federal Bureau of Investigation (FBI)). Since established, ZPICs have clearly met their goal of developing “innovative data analysis methodologies for detecting and preventing Medicare fraud and abuse.”  Rather than pursuing merely administrative overpayment cases, over the last six months, we have noted an increase in the number of cases referred to law enforcement for fraud investigation.

II. ZPIC Zones in the United States:

While seven ZPIC zones have been identified, only three companies have been awarded ZPIC contracts at this time.  Where ZPIC contracts remain pending, Program SafeGuard Contractors (PSC) are typically still operating and are conducting essentially the same duties as their ZPIC counterparts.  The seven ZPIC zones include:

  • Zone 1- CA, NV, American Samoa, Guam, HI and the Mariana Islands.

  • Zone 2- includes; AK, WA, OR, MT, ID, WY, UT, AZ, ND, SD, NE, KS, IA, MO.

  • Zone 3-MN, WI, IL, IN, MI, OH and KY.

  • Zone 4-CO, NM, OK, TX.

  • Zone 5- AL, AR, GA, LA, MS, NC, SC, TN, VA and WV

  • Zone 6- PA, NY, MD, DC, DE and ME, MA, NJ, CT, RI, NH and VT.

  • Zone 7- FL, PR and VI

The following map reflects zones where the ZPIC contractor is currently operating.  Each of the ZPICs listed below are actively sending out requests for information and / or conducting site visits.  In a number of instances, the ZPICs have been noted to be suspending providers from the Medicare program based on variety of alleged statutory and / regulatory violations.ZPICs are CMS Program Integrity Contractors. Allegations of Medicare Fraud Can Lead to a ZPIC Suspension Action.

ZPICs have been very active in their site visits which have brought about Medicare suspension actions. In some cases, these site visits have resulted in allegations of “fraud or willful misrepresentation” with ZPIC’s contacting of CMS for approval to place the provider on payment suspension.  In our next article, we will be examining the primary reasons cited by CMS when placing a provider on payment suspension status.

For a detailed discussion of the ZPIC audit process, please see:  ZPICs.

Liles Parker attorneys have extensive experience representing health care providers in ZPIC initiated actions.  Should your Physician Practice, Home Health Agency, Hospice Company, PT, OT or ST Clinic, Ambulance Company, Pain Clinic or Addiction Medicine provider may be audited by a ZPIC, give us a call for a free consultation.  We can be reached at: 1 (800) 475-1906.

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