Zone Program Integrity Contractors (ZPICs) audits were created by the Medicare Modernization Act of 2003. ZPIC audits replace the existing Medicare program safeguard contractors and are part of efforts to enhance auditing capabilities through centralization of audits as well as identification of alleged non compliant activities. [1] ZPIC contractors are tasked with identifying fraud, waste and abuse and can impose administrative actions such as suspensions, recoupment of monies for records denied, referrals to law enforcement or sanctions. ZPIC contractors also provide data to law enforcement to ensure coordination on investigations. [2]
The 7 zones for ZPIC audit contractors are:
- Zone 1 – CA, NV, American Samoa, Guam, HI and the Mariana Islands.
- Zone 2 – AK, WA, OR, MT, ID, WY, UT, AZ, ND, SD, NE, KS, IA, MO.
- Zone 3 – MN, WI, IL, IN, MI, OH and KY.
- Zone 4 – CO, NM, OK, TX.
- Zone 5 – AL, AR, GA, LA, MS, NC, SC, TN, VA and WV.
- Zone 6 – PA, NY, MD, DC, DE and ME, MA, NJ, CT, RI, NH and VT.
- 7 – FL, PR and VI. [3]
Because ZPIC contractors are paid in cases where recoupment of monies are identified, and because they are budget neutral no stone is left unturned when completing their audits. The ZPIC audits take a toll on providers affected because of the financial burden as well as additional work burden on provider personnel. Strict adherence to Medicare coverage guidelines will ensure that providers have a positive outcome. For example documentation must be exemplary and “paint a picture” of care needed and delivered. Ongoing education of all employees regarding Medicare coverage guidelines for home health is a must.
In recent years, ZPICs have been aggressively pursuing a wide variety of actions, including but not limited to:
- Pre-Payment Audit. After conducting a probe audit of a provider’s Medicare claims, the ZPIC may place a provider on “Pre-payment Audit” (also commonly referred to as “Pre-Payment Review”). Unlike a post-payment audit, there is no administrative appeals process that may be utilized by a provider for relief.
- Post-Payment Audit. Audits conducted by ZPICs primarily involve Medicare claims that have already been paid by the government. In many cases, the ZPICs appear to have conducted a strict application of the coverage requirements, regardless of whether a provider’s deviation from the rules is “de minimus” in nature. In doing so, it is not unusual to find that a provider has failed to comply with each and every requirement. Depending on the nature of the initial sample drawn, a ZPIC may extrapolate the damages in a case, significantly increasing the alleged overpayment. In doing so, the ZPIC is effectively claiming that the “sample” of claims audited are representative of the universe of claims at issue in an audit.
- Suspension. While the number of suspension actions taken by ZPICs has steadily increased in recent years, Medicare providers should expect to see this number continue to grow. Under the Affordable Care Act (often informally referred to as the “Health Care Reform” Act), CMS’ suspension authority has greatly expanded.
- Revocation. As with suspensions, we have seen a sharp increase in the number of Medicare revocation actions taken over the last year. The reasons for revocation have varied but have typically been associated with alleged violations of their participation agreement. In some cases, the ZPIC contractors found that the provider has moved addresses and did not properly notify Medicare. In other cases, a provider was alleged to have been uncooperative during a site visit. Finally, there were a number of instances where the provider allegedly did not meet the “core” requirements necessary for their facility to remain certified.
- Referrals for Civil and Criminal Enforcement. ZPICs are actively referring providers to HHS-OIG (which can in turn refer the case to the U.S. Department of Justice (DOJ) for possible civil and / or criminal enforcement) when a case appears to entail more than a mere overpayment. However, just because a referral is made doesn’t mean that it will prosecute. In many instances, HHS-OIG (and / or DOJ) will decline to open a case due to a variety of reasons, such as lack of evidence, insufficient damages, etc.[4]
The ZPIC audit process is very time consuming and labor intensive. It is costly for providers to assign staff to review, copy, and print and track ZPIC audits. It is an ongoing process. The time frames for ZPIC audits can vary greatly, and therefore may be an ongoing process.
If everything goes perfectly, the audit will last, a minimum, 3 months.
- A more likely timeframe – 6 months to 1.5 years; However audit times up t o 2 years is not uncommon
- During this period, provider is reimbursed only for those items that have been approved by the ZPIC. Given that a denial rate for a provider under prepayment review is 60-70%, the provider is only reimbursed for $0.30 to $0.40 for every dollar spent.
- It is very difficult for any provider to maintain and/or grow their business while receiving such low reimbursement for 6 months or more. Meanwhile, the provider remains responsible for all paying overhead costs, Including salaries and wages.
Every agency should be educate their managers, staff and employee’s regarding the serious risk ZPIC audits pose to the wellbeing of their agency. Documentation must adhere strictly to Medicare coverage guidelines to prevent denials.
[1] J. Med Prac Management, 2010 Nov-Dec; 26, 139-42, Hofstra PS. Partner, Health Law Department, Duane Morris LLP
[2] Centers for Medicare and Medicaid Services, Medicare Program Integrity Manual
http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/pim83c04.pdf
[3]ZPIC Audits-Medicare Audits July 2, 2012
http://www.zpicaudit.com/2010/01/overview-of-the-zone-program-integrity-contractor-zpic-program/
[4]Robert W. Liles, Esq.
