Notes

Health Care Providers Should Hold on Tight - ZPIC Audits of Medicare Claims Are Increasing
The first 1 / 2 of 2010 has been hard on health care providers. With Recovery Audit Contractor (RAC) audits ramping up round the country, many providers have discovered that while RAC audits could be on their way, a far more pressing concern is represented by the Zone Program Integrity Contractor (ZPIC) in charge of auditing Medicare providers within their "zone." ZPICs are but among the commercial contractors hired by CMS to conduct the medical reviews of Part A and Part B healthcare providers. Over the last year, ZPICs have been taking over where Program Safeguard Contractors (PSCs) left off. While our firm is still handling several cases which were initiated by PSCs, all of our recent cases have involved ZPICs.

As PSCs and ZPICs have been so quick to point out, they're not paid a percentage of the Medicare overpayments identified like their fellow medical reviewers - Recovery Audit Contractors (RACs). Nevertheless, as you will soon see, they are handsomely covered their efforts, albeit in another fashion than are RACs.

It is essential to keep in mind that both RACs and ZPICs are made to "find and stop waste, fraud and abuse in Medicare." Further, like their RAC cousins, ZPICs look at billing trends and patterns, concentrating on providers whose billings for Medicare services are greater than nearly all providers in the community (e.g. their peers).

ZPICs are responsible for conducting:

Medicare fraud investigations, including referrals to police;
Medicare data analyses (discovery, detection, investigation, and overpayment projection);
Medical reviews to aid fraud case development, including coverage and coding determinations;
Reviews, audits, settlements, and reimbursement of cost reports, and conducting specified audits;
IT systems activities for case and decision tracking and data warehousing;
Interface services with Medicare contractors, the medical community (outreach & education), and law enforcement; and
Medicare / Medicaid data matching program safeguard work for each state in their particular zone.
ZPIC Extrapolations of Alleged Damages:

Over the years, we have gone up against PSCs and ZPICs numerous times, challenging their interpretation of LMRPs / LCDs and assessing the methods they utilized to take part in a statistical extrapolation of the alleged damages in our client's cases. To provide these companies their due - the statistical experts they employ are smart, aggressive , nor hesitate to respond when their methods have been challenged. We like that - it keeps us sharp.

By using among the best statisticians in the country, in many cases, we've been able to show that their extrapolation of damages has not complied with applicable requirements, and is t here fore invalid. To be fair, every extrapolation differs, both with regards to facts, the methodology employed, and in the associated calculations conducted. As attorneys, we use our experts to breakdown and measure the ZPIC's calculations. Perhaps they handled it appropriately - or possibly they didn't. There really isn't solution to know if it was handled properly with out a complete copy of their file (including associated work papers and calculations) so that we are able to fully assess their actions.

During the last year, we've seen a marked upsurge in Medicare ZPIC contractor participation (as "participants" not as "parties") in ALJ hearings. Their experts have consistently been professional, concise and prepared to answer any questions posed by the ALJ. Our recommendation - both counsel and their defense expert better prepare yourself. It's to never early to start considering how to best contest the extrapolation that is conducted. As a final point, we are aware of a number of instances where a provider (or their representative) has chosen to ignore the extrapolation as a contestable issue. Quite simply, they just accept the extrapolation as a foregone conclusion and focus solely on the claims. We strongly disagree with that approach. If we identify deficiencies with the extrapolation, we aggressively challenge its application.

AdvanceMed's Medical Reviews:

Once a provider has been identified as an outlier (or identified as a possible problem by way of a variety of other mechanisms), a medical review of their claims is frequently conducted by way of a ZPIC.

Numerous year ago, Kevin Gerold, CMS' former Acting Deputy Director for Program Integrity was quoted as saying that the agency had revamped its method of claims processing in order to better "grasp the experience of the individual encounter." Mr. Gerold was further quoted as saying that CMS would "let medical reviewers assess a claim's legitimacy in line with the big picture of the patient encounter, not on a nit-picking slavery to master documentation." Unfortunately, in our humble opinion, many ZPIC medical reviews have conducted have been extremely technical - leading to the denial of many claims predicated on minor omissions, technical deficiencies and / or the contractors' own peculiar spin concerning the application of an LCD.

In responding to a ZPIC's known reasons for denial, it is essential that you obtain every reference relied upon by the contractor when denying the claims at issue. We have identified multiple instances in which a contractor (definitely not AdvanceMed) attempted to apply an LCD retroactively. Moreover, you should examine the underlying statutory authority to find out whether the contractor's interpretation of a coverage provision is consistent with the underlying law or regulation. Finally, it isn't enough to merely "poke holes" in the ZPIC's reasons for denial - we prefer to go one step further - show that this claims at issue do, in fact, qualify for coverage and payment. Should you learn that your practice or clinic is under review, we recommend that you immediately contact an experienced attorney to represent your practice and handle your defense.

Robert W. Liles, Esq., is Managing Partner at Liles Parker PLLC, Attorneys and Counselors at Law, a Washington, DC based law firm which represents health care providers round the country in ZPIC, PSC and RAC audits. For additional information call: 1 (800) 475-1906. Also, see: [http://www.zpicaudit.com]
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