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.
Next, call your attorney. Your attorney can counsel you on responding to the ZPIC audit – including adverse findings – and communications are privileged, unlike communications with your CPA or consultant. Further, should a CPA or consultant be needed to assist with responding to the audit, verifying audit findings, or disproving adversarial audit findings, their work may have more confidentiality if your attorney, rather than you, request their services.
Claims data is the primary source of information used to identify and target fraudulent, wasteful or abusive activities. The ZPIC may use innovative analytical methods of claims data to identify areas of potential errors. The ZPIC’s initial letter will usually focus on a certain population of beneficiaries set forth in a list attached to the initial letter. The request for documents is generally very broad and will require you to furnish “any and all documents” that support bills for services that will request reimbursement from or have been reimbursed by CMS. Keep in mind that a ZPIC audit generally has a look back period of one year from the initial determination or redetermination of a claim, but may be expanded to four years from the initial determination or redetermination date for good cause. Good cause can be: 1) new and material evidence that was not available or known at the time the determination was made and may result in a different conclusion, or 2) evidence that was used in making a determination or decision clearly shows that an obvious error was made at the time of the determination. The ZPIC is responsible for clearly documenting that the new and material evidence represents good cause for reopening. Additionally, if the ZPIC utilized medical records and other documents in its review and determination, these medical records and other documents already used by the ZPIC cannot be used for a redetermination.
Keep in mind that the primary goal of the ZPIC is to identify cases of suspected fraud, waste and abuse. However, it should not use incorrect statistical sampling or extrapolate outcomes from a specific sample to apply to a different population of data. ZPICs should be held accountable for inaccurate methods and procedures and incorrect audit findings.
Adverse ZPIC audit findings could lead to payment suspension, payment denial or overpayment recoupment. Once these actions are taken, if fraud is suspected, the provider is referred to the OIG for consideration and possible civil and criminal prosecution and/or application for administrative sanctions. Thus, it is important to be proactive and zealously defend against adverse ZPIC audit findings.