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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.

ZPIC Audit Weak Spots

This process can be challenged.  No provider or supplier should assume that the government is always right.  If a challenge is successful, the projected amount is thrown out and the provider or supplier will only be liable for the actual denied claims in the sample.  However, blanket arguments such as the contractor failed to follow one or more requirements of the Medicare Program Integrity Manual or that there is a more precise method available rarely prevail.  In contrast, challenges should be concentrated in these areas: (1) attack the technique (i.e., lack of randomness, selection bias, small sample size, or unrepresentative sample); (2) attack the conclusions (i.e., degree of confidence or precision level); or (3) attack the contractor’s expert (i.e., challenge the sampling creator’s credentials).

The ability to develop a successful appeal is imperative for healthcare providers seeking to hold reimbursements to which they are entitled.  If statistical sampling is utilized, a heavy burden is placed on the provider or supplier to rebut.  When faced with this scrutiny, providers and suppliers need to be aware of all options and be ready to counter the sampling process which will contribute to their bottom line.

The importance of payer audit recoupment cannot be overlooked. Every dollar in the medical field is divided between taxes, the facilities and professionals who provide the service, the manufacturers of the products, the insurance companies and so forth. While it’s great to get new business in, you must protect the money you’ve already collected and ensure that you are being well represented in the case of a recoupment claim. With the confusion that surrounds the industry, especially as new options for treatment become available, having reliable legal counsel can provide you the assurance you need to move forward with different matters.

So why us? While there are plenty of lawyers in the area who can assist you with this, few of them have our experience. Furthermore, by working with a firm, you know that you can get guidance and assistance for multiple matters including marketing, hiring a medical staff, compliance in regards to telemedicine and more. This is important and a valuable tool that you can utilize throughout the year. It also is a key service to count on as you push forward and venture into new things. Most businesses in the medical field know that a new service or product could become available that creates a unique opportunity for you to grow and expand.

The Florida Healthcare Law Firm wants to help you to grow and expand which is why we offer experienced assistance with payer audit recoupment, commission-based marketing, buying a medical business, hiring a physician and more. Schedule an appointment with an attorney today and don’t forget to sign up for our free monthly webinar. This is a great opportunity to learn more about different areas of the medical and legal field including trending topics covered by an experienced attorney. If you need further assistance, be sure to contact us today.

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