ZPIC Audit Process

Zone Program Integrity Contractors (ZPIC) are responsible for investigating suspected fraud, waste, or abuse in the Medicare program and healthcare providers. They are given powers to conduct detailed audits on a massive scale on behalf of the Centers for Medicare and Medicaid Services (CMS). As a result, the government frequently uses it to take a closer look at the way business is run by the health care providers. 

What is the Scope of ZPIC Audits?

ZPICs can cover anything from single-doctor clinics, home health to fully-functioning hospitals. However, some are targeted more than others, including durable medical equipment (“DME”) companies, clinical laboratories, ambulance services, home healthcare agencies. If a Medicare Administrative Contractor (MAC) investigates a health care provider for improper billing and finds a misunderstanding or an error, then it cannot dismiss the behavior, and the case is ultimately referred to as ZPIC. The ZPIC will then perform the following functions:

• Reviewing a sample of claims
• Interviewing different patients
• Interview employees at the provider’s office or home 
• Perform data analysis 
• Look for a history of violations by the provider 

ZPIC’s statement of work states that ZPIC shall analyze and review a variety of data to focus the program’s integral efforts on identifying vulnerabilities and health providers to undergo investigation and review within its zone for the potential of fraud, waste, or abuse to law enforcement and pursuing appropriate actions on results of the audit. Further, ZPIC shall be aggressive and proactive in pursuing many different techniques and sources for analyzing data to reduce risks within the statement of work. 

Red Flags Picked Up by the ZPIC Audit

Here are some of the red flags that signify to the auditors that there may be instances of fraud:

• Uncommon, inaccurate, and unexpected billing practices, 
• Transactions or entries in books that are inconsistent or incomplete,
• Frequent complaints by customers to governing agencies or referrals from government contractors, 
• Service provider’s documents are missing, not numbered or dated, omitted, or erased.

Audit Process of ZPIC 

ZPIC auditors will usually send a letter to the Medicare provider requesting documentation and medical records against several claims. The reply needs to be given within 30 days. ZPICs can also conduct a surprise audit as well. Once the ZPIC audits wrap up, a list of findings and recommendations is compiled, and as per the audit results, it is determined whether the healthcare provider is guilty of medicare fraud or not. 

If the ZPIC has identified a case of overpayment, the provider’s MAC shall be notified, which will issue the demand letter in relation to the amount. The provider can choose to repay the outstanding amount or pay via appeal or recoupment. If no payment or request for an extended repayment plan is received within 30 days, the overpayment is declared a liability and starts to accrue interest. 

During a ZPIC audit process, there are five stages – redetermination, reconsideration, administrative law judge hearing, department appeals by board review, and review in federal court. It is the same as the RAC’S appeals process. In the first two stages, overpayment collection is banned. 

ZPIC must provide different types of data, including data analysis, statistical analysis, and others, to substantiate its claims, enhance the prevention and detection of medicare and Medicaid potential fraud, abuse, and waste in the participating state(s). ZPICs are supposed to utilize the CMS Medicare data and any other that can be used to reach a valid conclusion. 

What Powers Do ZPIC Audits Have?

If fraud is detected during the ZPIC audits, experienced ZPIC can do one or more of the following:

• Issuing warnings to the health care providers,
• Suspending payments, 
• Demanding outstanding payment, 
• Reporting the healthcare vendors to the state licensing board for review, 
• Revoking the healthcare provider’s licenses and privileges, 
• Referring the matter to the law enforcement, Office of Inspector General, federal agencies for possible criminal prosecution or civil litigation. 

What To Do After Being Notified of a ZPIC Audit?

Receiving the request to submit documentation for audit purposes or the notice for the ZPIC audit can be nerve-wracking. However, the importance of preparing and arming healthcare providers in case of a ZPIC audit cannot be downplayed. The foresight of taking immediate action can help them protect themselves against potential criminal and civil liability. 

Here are a few tips on how to navigate a medical review by ZPIC audit:

Have a team of experienced attorneys 

Having an experienced attorney or team of attorneys will help your medicare providing clients by advising and assisting them at every step of the way during the ZPIC audit. Wherever necessary, an attorney shall also help you negotiate terms with the government. 

Maintain constant communication with billing vendors 

As soon as the audit notice is delivered, open communication with the billing vendors will help medicare providers gather the required documentation and request papers as necessary during a ZPIC audit.

Undertake proper due diligence and risk procedures for high-risk sectors 

High-risk sectors which are paid special attention to during audits by contractors are medical coding and billing, as these areas often contain the highest instances of fraud, waste, and abuse. Thus, medicare providers should always endeavor to improve their assessment and review policies. 

Examine, record, and ensure proper documentation

The primary goal is to determine whether proper medical records are being properly documented and the level of consistency between the maintenance of the documents. As per the request, during audits, if the healthcare provider fails to supply the required information, it could be catastrophic for the audit proceedings.

Introduction and Maintenance of a Compliant System

Even before undergoing audits, healthcare providers should have a detailed compliance program that correctly and timely identifies, monitors, detects, and immediately corrects the occurrences of misconduct within the organization. Having a fully functioning system in place signifies to the ZPIC that the service provider was diligent and undertook the necessary precautions.

Rosenblat Law is an exceptional law firm that specializes in assisting clients from the Medicare or Medicaid industry and has an experienced in-house team of attorneys to supersede expectations, especially in difficult circumstances. Don’t hesitate to get in touch with us to request a case evaluation. 

This article has been prepared for informational purposes only and is not legal advice. This information does not create a lawyer-client relationship. Readers should not act upon this article without seeking advice from professional advisers.