What is a ZPIC Audit?

If you are a healthcare provider who has received a letter from ZPIC, you are probably wondering, what is a ZPIC audit? A ZPIC audit is an audit conducted by Zone Program Integrity Contractors (ZPIC) (now called Unified Program Integrity Contractors), companies contracted by the Centers for Medicare and Medicaid Services (CMS), to investigate fraud, waste, or abuse by health care providers.

Usually, ZPICs audit health care providers due to improper billing, and in particular, overbilling Medicare. Improper billing could be a result of fraudulent billing practices or innocent mistakes in billing. If you are being investigated by ZPIC, you need to seek counsel from a healthcare fraud lawyer to ensure that all your subsequent actions are geared towards receiving a favorable audit from ZPIC.

Although there is an appeals process, it is always better to get a positive resolution at the first instance to avoid unfavorable consequences that can result from an unfavorable audit, such as recoupment of overpayment, suspension of a provider’s payments, referral to state licensing boards and other professional societies, or placement of the healthcare provider on prepayment review.

If you are looking for a ZPIC audit attorney, we at the Law Offices of Albert Goodwin are here for you. You can call us at 212-233-1233 or send us an email at [email protected].

ZPIC process

ZPIC begins its process by either sending a letter to the healthcare provider that it is under investigation or by simply appearing unannounced in the healthcare provider’s office to show the notice of investigation.

If ZPIC sends a letter, you are given a particular period of time to reply. You can seek counsel from your lawyer before preparing your reply. However, when they simply appear unannounced in your office, they usually demand access to documents and request interviews with persons. You should not be intimidated. You can tell them that you will only speak to them after consulting your attorney.

ZPICs choose the healthcare providers to audit in four ways: (a) complaints from patients and employees; (b) data analytics; (c) referrals from federal authorities; and (d) benefit integrity activities. Knowing what triggered the ZPIC audit can help you prepare a proper defense.

When a ZPIC audit is triggered by a patient complaint, the patient usually doesn’t know what is permissible or not permissible under current Medicare billing rules and regulations. The healthcare provider can emphasize on this point during the conduct of the audit. When the ZPIC audit is triggered by an employee complaint, the employee is usually disgruntled and has personal reasons or motives for making the complaint.

ZPIC audits are triggered by data analytics when it appears that a healthcare provider has abnormal billing practices. For example, this healthcare provider might have an unusually high billing for a particular service compared to other healthcare providers in the same geographical area or has experienced an unusual increase in billing for that particular service. However, an increase in billing can easily be explained by unique aspects of a healthcare provider’s medical practice.

Knowing the trigger can help the healthcare provider explain and defend its billing processes.

Common defenses in ZPIC audits

Healthcare providers can raise several defenses during ZPIC audits to ensure that ZPIC audits are limited in scope and to get a favorable resolution. For example, the ZPICs may demand voluminous documents during investigation. Your healthcare fraud lawyer can give you advice on whether the document demanded is legally subject to disclosure or not. Your attorney can also advise you whether the period to review that particular billing has expired and whether Medicare payments made for that particular service can still be recouped.

Sometimes, ZPICs use current Medicare regulations to evaluate past billing practices. As a general rule, one must use the current Medicare regulation at the time the billing was made. Healthcare providers should not be penalized for violating Medicare rules that were not yet in force at that particular time.

On the other hand, ZPICs may also use outdated Medicare regulations for current billing practices. ZPICs should be updated on the current Local Coverage Determinations, National Coverage Determinations, and Medicare Policy Benefit Manual version. The ZPIC’s reliance on outdated rules is also a common issue during ZPIC audits.

ZPIC result

A ZPIC audit may yield three types of results.

First, the ZPIC may refer the case to law enforcement for criminal, civil monetary penalty, or other sanction. This is the worst result a healthcare provider may face. It is important to avoid this result at the earliest instance by cooperating in the ZPIC investigation and establishing that no fraud has occurred.

Second, the ZPIC may refer the audit results to the Medicare Administrative Contractor for collection. In this case, the healthcare provider can appeal the overpayment determination through the appeals process. Sometimes, large amounts are involved and reversing the denial of a few claims can significantly reduce the provider’s damages.

Lastly, the ZPIC may determine that there is no overpayment but the healthcare provider simply needs education in its billing practices. This is the best outcome the healthcare provider can receive. There is no demand for overpayment, but there is a need to improve billing practices, which can be remedied by provider education.

ZPIC appeals process

There are five levels of administrative appeals regarding an overpayment determination before an appeal is brought before the court. A healthcare provider should be aware of the different periods of appeal per level of appeal because these prescribed periods should be strictly followed. Failure to file the appeal within the prescribed period may immediately result to the denial of the appeal.

First level of appeal: Request for redetermination

When the healthcare provider receives the result of the ZPIC audit (usually, a remittance letter that details the payment determination), it has 120 days from receipt of the result to request for redetermination with the same MAC. Even if the request for redetermination is with the same MAC, a different internal reviewer will handle the request for redetermination. The provider should submit supporting documents to establish its claim. The MAC will issue its redetermination decision within 60 days from the request for redetermination.

Second level of appeal: Request for reconsideration

When the redetermination decision is unfavorable, the healthcare provider can appeal this decision through a request for reconsideration to the qualified independent contractor (QIC) within 180 days from receipt of the redetermination decision. The healthcare provider must submit all documents to support its reasoning on why the redetermination decision is incorrect. Any document not submitted at this stage may not be admitted in the higher levels of the appeals process. The QIC generally has 60 days from the time it receives the request for reconsideration to make a decision. If a decision is not made within this period (unless extended) or the decision is unfavorable, the healthcare provider can escalate the appeal to the Office of Medicare Hearings and Appeals (OMHA).

Third level of appeal: Hearing before Administrative Law Judge (ALJ)

A request for a hearing before the ALJ must be filed within 60 days from receipt of the QIC’s decision on the request for reconsideration. The ALJ usually conducts the hearing through telephone but may also conduct the hearing via videoconference if requested. The ALJ’s decision is usually issued within 180 calendar days from the date the request to escalate the appeal to the OMHA is received. If no decision is made during this period, the healthcare provider may request that the appeal be escalated to the Council. The OMHA has 5 days from the time it receives this request to escalate to make a decision. Otherwise, the OMHA will forward the case file to the Council and send a notice that the appeal has been escalated.

Fourth level of appeal: Review by the Medicare Appeals Council

The healthcare provider may appeal the OMHA’s unfavorable decision within 60 days from receipt. The Council has 180 calendar days to issue a final decision, if the request was escalated from the OMHA without a decision, or 90 calendar days, if a decision was made by the OMHA. If no decision is made during this period, the healthcare provider may request that the case be escalated to the federal district court. Upon receiving this request, the Council will either send a notice containing a decision, dismissal, notice of remand, or further instructions one escalation.

Fifth level of appeal: Federal district court

The healthcare provider has 60 calendar days from receipt of this notice from the Council to file an action with the federal district court. To request judicial review with the federal district court, the amount in controversy must be at least $1,760 (in 2022).

Appealing audit results

When appealing audit results, the healthcare provider can raise both procedural and substantive arguments. For example, providers may argue that certain claims have been time-barred or that the right standards were not applied (possibly because the standards applied were not in force at the time the billing took place).

Providers can also raise substantive arguments depending on the reason for denial. For example, a claim may be denied because it failed to meet technical billing requirements. A review of the available records should be made because technical billing requirements may have been met. If certain records were missing, the provider, to comply with the technical billing requirements, can search for these records and submit them supplementally as part of the appeal.

If the denial is based on lack of medical necessity, a statement from a medical expert can be submitted to prove that a particular service was actually medically necessary and appropriate. If the audit results were based on extrapolation, providers can argue that the sampling methodology was deficient because the use of the sample violates due process, the sample not being representative of the entire set. This analysis usually requires the engagement of a statistician.

ZPIC audits can be complex and intimidating. The results of a ZPIC audit can translate to grave consequences for the healthcare provider. For this reason, it is important to engage the services of a ZPIC defense lawyer at the onset when participating in the ZPIC audit to ensure the possibility of getting a favorable outcome from the beginning. Should you need assistance, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].

Attorney Albert Goodwin

Law Offices of
Albert Goodwin, PLLC
31 W 34 Str, Suite 7058
New York, NY 10001

Tel. 212-233-1233

[email protected]

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