Marketing for DME & Pharmacy Providers: Know Your Subcontractor!

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marketing for dmeBy: Michael Silverman

Regulatory compliance is a mandatory investment for any healthcare business owner looking to stay out of serious and personal legal peril, let alone one hoping to keep their company viable.

Yet there is seemingly an onslaught of providers that blatantly run afoul of many of these regulations, knowingly or not, or those that believe they may have found a loophole.

Concerning the latter, there is an important mantra that such DME and pharmacy providers should remember and live by: “[W]hat a provider cannot do directly, it cannot do indirectly through an intermediary.”

Marketing for DME – What exactly am I talking about?

DME providers enrolled with CMS (should) know they cannot solicit or ‘cold call’ Medicare Part B beneficiaries, per the Federal Anti-Solicitation Statute, and that they cannot offer anything of value to a potential patient that could induce them to utilize them as a provider, in accordance with the Beneficiary Inducement Statute.Continue reading

Potential Class Action Targeting ZPIC Dismissed: What This Means

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.     Continue reading

ZPIC Audit Avoidance for Home Health Providers

zpic audit medicare

zpic audit medicareBy: Matthew Fischer

Medicare beneficiaries are generally entitled to coverage for care received by a home health agency.  However, home health providers can expose themselves to large overpayment demands from Zone Program Integrity Contractors (ZPIC audit) if the face-to-face (FTF) encounter requirements for home health certification are not strictly followed.  On an increasing basis, FTF encounters have been the target of ZPIC review.  Providers view this position as an effort to use home health agencies to police the industry.  On the other hand, contractors see this as part of their mission to identify cases of suspected fraud and recoup inappropriate payments.  Thus, it is imperative that home health providers fully understand the requirements in order to withstand contractor scrutiny.Continue reading

ZPIC Audit: How to Defend Against Extrapolated Overpayment Results

zpic overpayment

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.Continue reading

Healthcare Compliance: Understanding ZPIC Audits

By: Susan St. John

So, you’ve received a letter from the Zone Program Integrity Contractor or “ZPIC” to review for the accuracy and justification of services reimbursed by the Medicare program. In other words, a dreaded ZPIC Audit or ZPIC Investigation. Now What?!

First, remain calm. Chances are an audit by ZPIC will go well if you have been diligent in completing patients’ medical records, justifying medical necessity, and your billing is accurate and well supported by the patients’ medical records. Even if errors are discovered, most errors do not represent fraud, that is, the errors were not committed knowingly, willfully and intentionally. Still, a ZPIC audit can be daunting and if Medicare has noticed a pattern of billing that it considers suspect, or there has been a complaint against you, the ZPIC audit will be rigorous, and often adversarial. The ZPIC’s job is to protect the program from potential fraud. It will conduct data analysis, including statistical outliers within a well-defined group, or other analysis to detect patterns within claims or groups of claims that might suggest improper billing. Data analysis can be undertaken as part of a general review of claims pre or post submission, or in response to information about specific problems arising from complaints, provider or beneficiary input, fraud alerts, CMS reports, Medicare Area Contractors, or independent governmental or nongovernmental agencies.Continue reading