Health Care Providers Should Hang on Tight

Article Written By: robertwliles

The first half of 2010 has been hard on health care providers. With Recovery Audit Contractor (RAC) audits ramping up around the country, many providers have found that while RAC audits may be on their way, a more pressing concern is represented by the Zone Program Integrity Contractor (ZPIC) responsible for auditing Medicare providers in their zone. ZPICs are but one of the commercial contractors hired by CMS to conduct the medical reviews of Part A and Part B health care providers. Over the last year, ZPICs have been taking over where Program Safeguard Contractors (PSCs) left off. While our firm is still handling a number of cases that were initiated by PSCs, all of our recent cases have involved ZPICs.

As PSCs and ZPICs have been so quick to point out, they are 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 paid for their efforts, albeit in a different fashion than are RACs.

It is essential to keep in mind that both RACs and ZPICs are designed to find and prevent waste, fraud and abuse in Medicare.” Further, like their RAC cousins, ZPICs look at billing trends and patterns, focusing on providers whose billings for Medicare services are higher than the majority of providers in the community (e.g. their peers).

ZPICs are responsible for conducting:

- Medicare fraud investigations, including referrals to law enforcement;

- Medicare data analyses (discovery, detection, investigation, and overpayment projection);

- Medical reviews to support 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 and education), and law enforcement;

- Medicare / Medicaid data matching program safeguard work for each state in their particular zone.

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 engage in a statistical extrapolation of the alleged damages in our client s cases. To give these companies their due – the statistical experts they employ are smart, aggressive and do not hesitate to respond when their methods have been challenged. We like that – it keeps us sharp.

With the help of some of the best statisticians in the country, in many cases, we have been able to show that their extrapolation of damages has not complied with applicable requirements, and is therefore invalid. To be fair, every extrapolation is different, both in terms of facts, the methodology employed, and in the associated calculations conducted. As attorneys, we work with our experts to break down and assess the ZPIC s calculations. Perhaps they handled it appropriately – or maybe they didn t. There really isn t any way to know if it was handled properly without a complete copy of their file (including associated work papers and calculations) so that we can fully assess their actions.

Over the last year, we have seen a marked increase in Medicare ZPIC contractor participation (as participants” not as parties”) in ALJ hearings. Their experts have consistently been professional, concise and ready to answer any questions posed by the ALJ. Our recommendation – both counsel and their defense expert better be prepared. It s never to early to start thinking about how to best contest the extrapolation that has been 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. In other words, 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.

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

A number of year ago, Kevin Gerold, CMS former Acting Deputy Director for Program Integrity was quoted as saying that the agency had revamped its approach to claims processing in an effort to better grasp the experience of the patient encounter.” Mr. Gerold was further quoted as saying that CMS was going to let medical reviewers assess a claim s legitimacy based on the big picture of the patient encounter, not on a nit-picking slavery to perfect documentation.” Unfortunately, in our humble opinion, many ZPIC medical reviews have conducted have been extremely technical — resulting in the denial of many claims based on minor omissions, technical deficiencies and / or the contractors own peculiar spin regarding the application of an LCD.

In responding to a ZPIC s reasons for denial, it is essential that you obtain each and every reference relied upon by the contractor when denying the claims at issue. We have identified multiple instances where a contractor (not necessarily AdvanceMed) attempted to apply an LCD retroactively. Moreover, it is important to examine the underlying statutory authority to determine 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 like to go one step further – show that the particular 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.

About the Author

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 around the country in ZPIC, PSC and RAC audits. For additional informatio see: http://www.zpicaudit.com

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