Medicare Program Integrity Manual

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Potential Class Action Targeting ZPIC Dismissed: What This Means

by admin on April 30, 2018 1 comment

medicare payment suspensionBy: Matt Fischer

A recent lawsuit seeking class action status that targeted Zone Program Integrity Contractor (ZPIC), AdvanceMed along with the U.S. Department of Health and Human Services (HHS) has been dismissed.  The plaintiff, an Illinois home health agency (HHA), filed suit in federal court requesting a writ of mandamus (i.e. an order directing a party to perform a specific act) and damages based on claims of fraud and non-compliance with Medicare’s regulations.  With many wanting an overhaul with regards to ZPIC authority, this case has been watched closely.  What does this decision mean going forward?  Consequently, this decision solidifies the formidable hurdle and requirement to exhaust all administrative remedies before challenging a ZPIC in court.

What occurred in this case is not uncommon.  AdvanceMed conducted a review of a number of patient charts which led to a suspension of Medicare payment “based on reliable information that an overpayment exists or that the payments to be made may not be correct.”  In response to the suspension notice, the HHA submitted a rebuttal statement with additional supporting documentation.  The ZPIC later informed the HHA that the documentation had been reviewed and the Centers for Medicare & Medicaid Services (CMS) decided to continue the suspension.  In subsequent discussions between the parties, an AdvanceMed representative surprising stated that it was not their policy to review rebuttals nor was it obligated to review the additional documentation.  The representative further indicated that CMS concurred with their position.  As a result, the HHA filed a lawsuit.     

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ZPIC Audit: How to Defend Against Extrapolated Overpayment Results

by admin on November 13, 2017 No comments

zpic overpaymentBy: Matt Fischer

Since the implementation of the ZPIC audit and RAC audit programs, healthcare providers and suppliers have experienced increased scrutiny in the pursuit of overpayments and fraud.  Medicare’s most vital tool in its progressive search is the use of statistical sampling.  In theory, statistical sampling offers a reliable and low cost approach to addressing large volumes of claims.  However, this process gives the government a huge advantage as it places a heavy assumption on a large number of claims without actual review of the claims.  Thus, it is important for providers and suppliers to understand the process and know how to challenge such studies in order to minimize potential repayment obligations and retain their revenue.

What is statistical sampling?

Statistical sampling draws a random sample from a universe of claims and extrapolates or projects the results of the sample to the entire universe of claims.  In other words, the Medicare contractor will select a sample of claims to review from a look back period or examination period of typically two or three years.  For this example, let’s say that the review finds a 40 percent error rate in the sample, meaning 40 percent were not found to meet Medicare requirements for payment.  In this case, a contractor will apply the 40 percent finding to the entire two years’ worth of claims and deny these claims based on the sampling results.

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